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  • Cameron adapts British study tax

    - Liberalizing its HE sector, England wants its students to borrow money through its student loan facilities. Now, the British government abandoned the idea of penalizing students that repay student loans earlier. Critics say that this will benefit wealthier students at the expense of the rest.

    In 2011, British Prime Minister David Cameron announced a new era of higher education on the island. Competition between universities should be increased and budgets cut while students finally understand studying as an investment that pays a return in their future career. To realize this, the government raised the maximum tuition fee level that institutes can charge by a factor of 3 up to £9.000 (€10.170).

    Meanwhile, different measures were introduced to make sure that low income students are not scared off getting a degree by expensive tuition fee rates. Cameron launched access programs à la Robin Hood and expanded borrowing facilities for all students. Over a total of 30 years, students should return the money they borrowed from the state, paying interest each year.

    Early repayment penalty abandoned

    The latter now proves especially controversial. Cameron's left liberal coalition partner wanted to impose a penalty for lenders that repay their debt early. This way it would be avoided that wealthy students substantially decrease their interest payments by paying back their loan in one lump-sum after graduation.

    In the end, it appears that Cameron's Conservatives got their way since there will be no such penalty installed after all. This may both boost the government's treasure in the short-term and significantly benefit students from rich economic backgrounds.