Guide discussion: Should I repay my post-2012 student loan?

BoxerRules wrote: »

I am not currently a student ( I graduated more than forty years ago) and I applaud Martin for his efforts to put this issue into perspective. It would be a great step forward officially to remove the concept of 'debt', with all its bad connotations of millstones round necks, ultimate personal bankruptcy and even the Marshalsea. If you must think in terms of debt, then try comparing it to the so-called ' Third World ', where countries borrowed money they struggled to pay back and were eventually in such dire straits that the lenders were forced to cancel the debt completely. With student finance you may feel you struggle to pay it back, but unlike ordinary debts like mortgages, car loans and the like, there is no life-long millstone and the system has a built-in guarantee that any liability to repay the sum outstanding disappears after thirty years. Wouldn't developing countries have loved a loan like that. What today's graduates have is a Personal Payment Plan and while Martin's description of a 'graduate contribution tax' is a bit clunky, it's accurate and is the best one available. I certainly haven't yet thought of a snappier title.
Is it a good deal? Well, try applying the system to a house mortgage instead of a student loan. If you think you might currently be able to afford a £150,000 house, wouldn't you like to be able to go to the government , who would give you the money to buy the house and then say you need only repay a small percentage of what you earn above a low benchmark? What we'll do is add interest onto the sum outstanding, but after thirty years, whatever the total, it will be written off and you'll still own the house? An even better deal, you apply for a house costing £450,000 ( because it's just up the road and has a dedicated parking space) and the government still give you the money, still only want the same repayment as for the cheaper house and still write off the much-larger accumulated sum outstanding after thirty years!
You can call such a mortgage comparison absurd, but that just illustrates why the Graduate Contribution Tax is different to a normal debt.
The universities obviously understood the reality of the system, which is why they all queued up to charge the maximum amount for course tuition. They get the maximum money from the government up-front and leave the government to worry about reclaiming graduate contributions.
I went to university 1968-73, when course fees were paid directly by government and I received a maintenance grant. No repayments required. However, the reasoning was that graduates were probably going to have a much-better paid career than if they didn't go to university, so over a working life of forty years the Treasury would get back much more in tax than it would otherwise and the investment was worthwhile. Importantly, however true this was, no-one could quantify it.
Was I better off than today's students? It seems to me that in important respects the modern system is the same as that of yore. Course fees are still paid by the government and the student still receives money for maintenance. The difference concerns the attempts to quantify the students' contribution to defraying those costs over a working life. In my day it couldn't be done, so no worries were generated. Now an individual sum can be attached to each graduate and you can track how much he or she is contributing each year back into the nation's coffers. This insistence on information, transparency, call it what you will, generates the anxiety. So yes, I probably was better off, but only because I was more positive about graduating because no-one bothered to keep telling me how much I owed the state.
One final thought . As to the politics, Mr Corbyn and the Labour Party should be supporting this system for its pure Marxist credentials. If I may re-order Karl's phraseology from 'The Critique of the Gotha', the student loan system fits exactly " to each according to his needs, from each according to his ability ( to pay-my italics)