I am not the pp that you were referencing / responding to, and I understand the ‘too rich to worry’ is most likely a throw-away comment, but I just wanted to mention that I grew up in a household that wasn’t at all wealthy (I remember my mum in the 1970s skipping meals to make the food go further, and she also diluted tomato soup with milk and butter to make it stretch for all of us), and I was also the first in my family to go to university (in late 80s). My parents’ attitude to debt was that it was a really bad thing, and that you should save up for what you wanted, and pay for it upfront, rather than take on loans. I remember them really panicking (when their overdraft had crept towards £1000 (it was usually much lower). I think these type of experiences in childhood do affect how you perceive finances, as an adult. And your willingness to saddle yourself (or your kids) with debt repayments / extra taxes.
In terms of student loans today, there will be graduates who earn high salaries from the start who will pay it off completely, in however many years. For them, it will be a ‘debt’ rather than a tax. There will also be graduates who maybe only earn just over the threshold, for whom it will accumulate significantly over the decades, and they will continue to pay off a (relatively) small amount (a percentage of their income over the threshold), and for them, it is essentially a tax for 40 years, as they will never ‘pay it off’.
However, there is a band of graduates in the middle of those two extremes, who will perhaps be in a lower paid job for many years (so the amount ‘owing’ will accumulate significantly) but may find that their salaries increase substantially in their later years. Academic salaries are potentially in this bracket. As ‘loan’ payments continue for 40 years now, it may be that from the age of, say, 45-61, 9 per cent of your salary over the threshold will be a really significant amount. In this case it is also a tax, (unless the larger payments do serve to pay it off near the end of the term) but the amount paid will be much much higher. So it is the worst of all world for this section of graduates in the middle.
In some ways, I think altering the term from 30 to 40 years is an incredibly astute move, on the part of the Student Loans Company (as that extra 10 years is likely to be at the highest salary that a person will achieve, so the payments each month will be highest) - but not so beneficial for those having to pay them.
@TizerorFizz I know you have huge experience with your own dcs (in terms of university / careers etc), so I know that you will already know all of the above (and probably much more than me!), but I felt it was worth commenting, as I think the whole student loan issue now is so much more nuanced, and the suitability (or value) of it will only really become clear when then is a good idea of what career / salary trajectory there might be.
Anyway - the conclusion (in our own family) was that if we (and our dc) could reduce the reliance on student loans (through careful planning, and dcs being very careful with money at uni), then that is the best plan (for whatever career / salary they may end up with).
I had previously heard (irl) someone mention / describe student loans as ‘free money’ (this was before plan 5), and it worries me that so many young people perhaps have this view - and so maybe are not really budgeting. So I just wanted to put an alternative viewpoint out there.