There are so many myths about the system of student loans that I think it is useful to quote from Martin Lewis (the money saving expert) to give his view.

“New research from the Independent  Taskforce on Student Finance Information – which I head up – shows over 60% of school  pupils and new university starters worry about not being able to repay their  student ‘debt’ after university if they have a low income or lose their job.

Yet this is an irrelevant fear. You only  have to repay fees and living costs if you earn over £21,000. And, even then,  it’s proportionate to earnings, so you repay 9% of everything above  £21,000. If you haven’t cleared what you owe within 30 years, the debt is  wiped. For full help on how the system works, read www.moneysavingexpert.com/students2012.

In financial terms, what we effectively have  is a no-win, no-fee higher education. However, the word “debt” is so evocative,  the psychological effect puts many off due to the fear of it hanging over  them.

Below are key  student loan facts, where I’ve changed the word ‘repay’ to ‘contribute’…

• You only need to contribute if you earn  enough (£21,000 in a year) once you graduate.
• Your contributions are taken, like tax,  via the payroll.
• No one will ever chase you for the cash  – as contributions are taken off before you receive your salary.
• The more financially successful you are,  the more you will contribute.
• If you lose your job or your income is  reduced, so are your contributions.
• Contributions stop after thirty years,  even if you haven’t contributed the maximum amount.
• Many people will be contributing for the  whole 30 years – all of their working life.

Suddenly this fear of debt looks  ridiculous.”

Read the whole article on Martin Lewis’ blog – just typw ‘Martin Lewis student loans’ into Google.