Cameron adapts British study tax

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17 februari 2012 | 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 newera of higher education on the island. Competition betweenuniversities should be increased and budgets cut while studentsfinally understand studying as an investment that pays a return intheir future career. To realize this, the government raised the maximum tuition fee level thatinstitutes can charge by a factor of 3 up to £9.000 (€10.170).

Meanwhile, different measures were introduced to make sure thatlow income students are not scared off getting a degree byexpensive tuition fee rates. Cameron launched access programs à la Robin Hood and expandedborrowing 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 leftliberal coalition partner wanted to impose a penalty for lendersthat repay their debt early. This way it would be avoided thatwealthy students substantially decrease their interest payments bypaying back their loan in one lump-sum after graduation.

In the end, it appears that Cameron’s Conservatives got theirway since there will be no such penalty installed after all. Thismay both boost the government’s treasure in the short-term andsignificantly benefit students from rich economic backgrounds.


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