Policy Exchange calls for wealthier students to repay university loans via private sector

In a new report Policy Exchange attempts to address the need for (1) universities to receive more funding but (2) to also avoid the government's student loan debt ballooning out of control.

The report notes that "the Government’s total student debt outstanding is already £25 billion and is expected to rise to £55 billion by 2018."  It continues: "In short, particularly if the cap on top-up fees is raised [which Policy Exchange supports], the size of the loan book is set to spiral out of control."

The report's remedy is for the introduction of a private but regulated loan scheme for wealthier students:

"This private loans scheme would be exclusively for students from the highest income backgrounds, but the Government should ensure that banks charge below the commercial rate of interest so that all students continue to have access to some sort of subsidised loan scheme. Creating a new private loans scheme for these low risk borrowers would help to reduce the burden of Government student loan debt, and target Government financial aid at those who need it most."

More here.