10,000s risk wasting money by choosing to repay their student loan when they don't have to

I agree with the sentiment of the article.

I am curious on one point. "83% of students on plan 2 will not pay off the loan in full." Part of the reason for this is the high interest rate charged. I wonder what that percentage would be if interest from when the loan goes into repayment (the April after graduation usually) was excluded. After all, people repay early to avoid the interest accumulating on the loan.

If these things were being hawked by private sector companies they would be in a mis-selling scandal all of their own. The very original student loans (1990-98) worked like actual bank loans which you repaid in set monthly installments over a set number of years, although even then you could "defer" each year if your income didn't meet the very generous threshold linked to average earnings. If you hadn't paid all the installments after 25 years the whole lot was cancelled.

But all the confusion about the present system stems from the government's refusal to call them what they are - a capped graduate tax - and the opposition playing along with this for short term political advantage by constantly referring to "thousands of pounds of student debt".

It would be far more honest (and far less off putting to potential students from poorer backgrounds) if the government simply said: "If you go to university you won't have to find a penny in fees, but once you start work, you will have to pay an extra income tax charge for thirty years on top of what people who didn't go to university have to. At the minute this extra is 9% on any earnings over £25,725 pa. Anytime your earnings are less than that £25,725 threshold you won't pay any extra tax at all. After thirty years you'll pay the same tax as people who didn't go to university, regardless of what you earn. If you're lucky enough to have a very high paid job it's possible that you might stop paying the 9% extra sooner than the thirty years, because the government sets your extra 9% payments against a notional charge for the cost of your degree course, and if you're earning a lot of money you might pay all of this notional charge before the thirty years are up."