Letter: Reform of student loans

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The Independent Online
Sir: Your leading article of 9 August on university top-up fees said that it would be a terrible mistake to allow universities to start charging fees. There is no question of them needing to be allowed. Universities are autonomous private sector charities. Thankfully, they are not part of the public sector, but are subject to the tyranny which can accompany a contract from a (near) monopoly purchaser, in this case the state.

In the absence of an improved loans scheme, top-up fees are undesirable. So too, however, is ageing laboratory equipment, under-investment in IT or further increase in student/staff ratios. Any fee scheme will have to take account of ability to pay, be it in advance or post-graduation. A fully fledged graduate tax has the attractions of the Venus fly-trap. Where is the example to show that the Treasury can, long term, keep its sticky fingers off funds raised through the government machine?

I believe the universities and the banks should operate a private loan scheme, with the charges levied allowing for low earners, emigrant graduates, career break losses, etc as well as real rates of interest.

Unfortunately, American experience has shown that it can be more expensive to lend than to give! Thus, the only economic means of recovery is through the Inland Revenue or the Contributions Agency. The new loans company could have a service agreement with either of these to extract repayments from the wage packets of those who had signed up for the loans. In this arrangement the Government is at arm's length and the public sector is not being asked to do anything for which it is not paid.

Professor R F BOUCHER

Principal and Vice-Chancellor