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By David Vance On February 16th, 2012

I reckon that this is one of the biggest Ponzi scheme going. I refer, of course, to Student “Loans”.

The way these loans work is that Students going to University get a loan from Government  to pay their annual tuition fees. Over three years, this loan can reach around £30,000-£45,000. They then have to pay off the Loan during the next 30 years  but the repayments only start if they earn more than £15,000 per annum. Unless salary levels rocket, there is no way that 30 years will see repayment being made but the Government pretends otherwise.

All this begs the question where is the money going to come from to repay the massive debts that will remain unpaid in 30 years? Government remains silent on the issue. And yet, in a wonderful example of perversity, Government has made it clear that anyone who repays the loan EARLY will be punished!!!! Now, in a welcome but belated move, that silliness has been reversed.

Vince Cable, the Business Secretary, had intended to introduce an early repayment penalty which would have cost graduates thousands of pounds if they cleared their debts within 30 years of leaving university. 

The Prime Minister is understood to have dropped the scheme earlier this week amid warnings that it would be unfair on the hundreds of thousands of people expected to repay their loans early. The deal was agreed after Mr Cameron backed down and allowed Mr Cable to appoint the controversial Prof Les Ebdon as the Government’s new university admissions tsar.

The logic of Cable’s (and Ebdon’s) position is that successful high earning graduates must be punished whilst those who do not earn sufficient salary must be accommodated! Perhaps the most repulsive idea of all is that a young person going to University has to become a client of the State for 30 years in respect of their academic debt. In what way is this egalitarian? In what way is this fair? And yet it it Liberals pushing this ridiculous idea.


  1. Idiocy. Early payment give them a 5% discount NOT a penalty. I’m a taxpayer and I’d like my cash back ASAP.

    Cable and the buffoons need to be found a nice job they can do so as not to interfere with the rest of us. How about Inspector of Flagpoles?

  2. It’s a ponzi scheme which the bankers and academiaare wholly in favour of. It’s because students can easily borrow thousands pf pounds each year that courses are so expensive.

    Most put the cart before the horse, thinking that students needs loans because courses are so expensive, but that’s exactly the wrong way round.