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Tuition refunds could be easily given by the government. Simply by writing off some or all of tuition fee loans this year. This would cost 0 now (since govt already borrowed money to pay fees). But it would also cost very little over the lifetime of the loan.
Why? Student fee loan repayments are structured like a tax. The repayment amount depends on a person’s income, not the loan value. So a loan write-off today changes total amount payable but not how much will be paid per month.
Won’t reducing total cost money? Not a lot. Loans are written off after 30 years. In current system not everyone pays entire loan + interest (not even those earning in top 10%)
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/805127/Review_of_post_18_education_and_funding.pdf
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/805127/Review_of_post_18_education_and_funding.pdf
In fact the government only expects 25% of loans to be paid in full. Writing off a bit of debt only reduces expected revenue from those who will be able to pay it off in full.
https://commonslibrary.parliament.uk/research-briefings/sn01079/
https://commonslibrary.parliament.uk/research-briefings/sn01079/
So writing off £1 tuition fee debt this year will cost treasury about 30p in forgone revenue in 20-30 years. When some loans are paid off a bit earlier then otherwise. Writing of all tuition fees for English students this year would cost about £3B.
This cost could just be accepted, or could be mitigated in various ways. Say by offering the write-off for this years tuition in exchange for extending repayment term by a few years. Or by spending about 1% (£100M) of the current yearly loan cost. Or other creative ways.
