The big picture regarding student loans is that student loans are a portfolio worth over £100bn, and will be sold off to finance pensions, social care, and maybe even the NHS (unless the NHS is also sold off) once post Brexit economic realities hit. Robbing Peter to pay Paul is an ingrained feature of 'policy' that won't change.
Older debt is already being sold off. It will be easier to sell off the rest, and to accomplish the same of the old debt too, if unlimited T & C changes are permitted. This will be a most tempting way of gussying up the whole portfolio for sale. Thresholds can be raised or lowered even as things stand. The government will not be able to afford unlimited writeoffs or continued raising of the threshold. Something will have to give, even without a firesale.
Interest rates have risen from 4.6% to 6.3% in a very short span of time. Upward changes in interest rates mean that individuals will pay more interest on top of the average £5,800 in interest rates that have already accrued by the time they graduate. If they reach the magic £25k threshold, interest rates, and more specifically the potential for them to rise along with inflation, becomes a problem. A high earner could pay £40k in interest rates alone over the course of the years.
The shake out is not going to be decades in the future. It will happen within the next ten years, and borrowers are going to be screwed.
www.bbc.co.uk/news/education-38880809
The government has had a long-standing aim to sell the student loan book to private investors - with types of loans being sold in separate stages
Over the next four years it aims to dispose of the loans from before 2012, when tuition fees in England were trebled to £9,000 per year.
The slice of loans now being put on sale - dating from 2002 to 2006 - have a face value of £4bn.
The government is promising that there will be "no changes to the terms and conditions" for borrowers - so that rates of repayment for former students will remain the same.
It means that interest on these student loans will become an income for private investors, but repayments will continue to be collected through taxation and the Student Loans Company.
The Intergenerational Foundation think tank has calculated that a student borrowing for three years' tuition could pay back £54,000 - before debts are cancelled after 30 years.
The Universities Minister Jo Johnson says the sale of assets is part of the drive to bring "public finances under control".
But he said it would "only proceed once we are satisfied that it represents value for money for the taxpayer"...
...Nick Hillman, director of the Higher Education Policy Institute, said that there was much "misinformation" about the sale of loans, and the key issue was making sure that the taxpayer received good value.
"What the government is doing may make some sense," said Mr Hillman.
"Why should it keep the loans forever on its books? Why shouldn't the demand of pension funds for long-term income streams be satisfied if there are no clear losers? Why shouldn't we look for imaginative ways to reduce the national debt?"
^Consumer finance expert Martin Lewis welcomed assurances about borrowers not facing a negative, but cautioned: "It is a question of 'watch this space' to see if their rhetoric is matched by their delivery."
Is this the same Martin Lewis Blaa was posting about upthread?
For 'value for taxpayers' read - lack of political will to raise general taxation levels and in particular to increase taxes on the wealthy.
Graduates are going to have their loans transformed into cash cows for investors, who won't touch the portfolio without reserving to themselves the right to change T & Cs.