Comment by spacebanana7
1 day ago
I actually quite like the system we have in the UK.
Graduates pay roughly 9% of their income above £27k towards debt repayment, and the remaining balance is written off after 30 years. Typical tuition fees are just over £9k per year.
This strikes a nice balance between encouraging people to carefully consider alternative non-university careers whilst also not preventing too many people from not being able to afford it.
Note my numbers are approximate because they can vary depending on when & where a person went to university a couple of other factors. Also I do think the system could be slightly improved (especially around maintenance loans) but on the whole has a good structure.
Australia's system is similar, albeit the tuition fees are higher (capped depending on the degree and set by the government). You take out a government-backed loan and which is around CPI and then pay it back at an increasing % based on your income, between I think 1.5% above a certain threshold and 10% by a second, higher one.
There's been some issues with it, but no system is perfect and the thrust of it is aligned with the dual public-private structure that Australia seems to prefer (see also: medicare vs private health insurance).
It would be a good system if the interest rate on the loan wasn't absolutely insane.
My student loan in Sweden (I maxed it out at over $30k total for 5 years) had an interest rate of below 2% for the whole period. Currently it's just above 1%. The student loan interest rate is fixed to a small amount above the interbank rate. The key is 1) I didn't have to borrow for tuition, just the books and noodles. 2) the state lends me the money, I don't have to fish around the loan market.
It was funny when they capped the rate at 7% recently. The calculated rate of RPI + 3% reached 14% and it became just a bit too obvious that it's a scam. Luckily I went in 2009 when tuition was 3.5k.