Student loans good. Graduate tax not so good

Good piece by Nicholas Barr in the Guardian on the reasons the current loan system is better than the NUS-preferred Graduate Tax:

The bottom line is that we have the best of both worlds. Graduates face what looks like a graduate tax, but one that does not go on for ever. And universities face a system that encourages competition and strengthens university autonomy.

Also includes a helpful reminder of the difference between a system which makes the education free for the student and a credit card debt:

Many people conflate student loans with credit card debt. This is plain wrong. A credit card debt of £20,000 rightly causes parents sleepless nights. Student Loans Company debt is very different – low interest rate, long repayment period, and no repayments when income is low. What parent has sleepless nights over their child’s future tax bills – even though a typical graduate over a full career will pay around £1m in income tax and national insurance contributions? Thus university is free to the student, and graduates face an income-related payroll deduction when they start earning. The government should be loudly cheered for bringing in this system and noisily excoriated for its complete failure to get across to the public that this is how it works.

And he is quite right about the under-promotion of the realities of the system.