Another fees cave in from CablePosted: February 16, 2012
So to the delight of the Daily Telegraph, Vince Cable has caved in yet again. Apparently a deal has been done that in return for agreeing the appointment of Les Ebdon to OFFA, there is to be no surcharge on the early repayment of student loans.
What this means in practice is that students with wealthy parents or those who start getting their bankers’ bonuses early in their career will pay thousands of pounds less than those from modest backgrounds.
Here’s how the scam works. You take out a loan – say £50k to cover fees and maintenance. Interest is charged from the time you start your course at least at RPI, often at RPI plus up to 3%. If your repayments last the full 30 years and you’re racking up interest all the time. That’s comfortably in excess of £50k extra.
But if you repay the loan early that vanishes. So it will cost you less if daddy can think of it as just a couple more year’s school fees. The Lib Dems had held out for a surcharge on early payment to do something to even out what people would actually repay. Now that’s going – David Cameron has done his bit for the upper middle class and Vince Cable gets a token victory in a quango that is, as one commentator says already ” a dead man walking”.
We are, of course, all in it together!