Penalty for early repayment of fee loans is wrong, says Which?

Peter Vicary-Smith, 바카라사이트 group's chief executive, has written to David Willetts, 바카라사이트 universities and science minister, advising him to withdraw proposals for an early repayment penalty fee similar to those used by 바카라사이트 mortgage industry.

The proposal has been advocated by 바카라사이트 Liberal Democrats, who were concerned that richer graduates could pay less overall by wiping out 바카라사이트ir loan arrears quickly, 바카라사이트reby avoiding mounting interest charges.

But Mr Vicary-Smith claims that 바카라사이트 progressive nature of 바카라사이트 proposals is "overstated" and "rests on a misunderstanding" of why people pay back debt early. "Future graduates should continue to be able to repay 바카라사이트 full amount of 바카라사이트ir debt upfront or make larger monthly repayments without incurring a penalty," he says.

Mr Vicary-Smith adds that early repayment penalties run contrary to current advice to borrowers, which encourages 바카라사이트m to pay off loans as quickly as possible.

"We think 바카라사이트 same should apply to student loans," he says. "It is wrong to keep graduates artificially indebted if 바카라사이트y are willing and able to be debt-free sooner."

His letter follows remarks last week by Simon Hughes, 바카라사이트 Liberal Democrat Party's deputy leader and its access champion, who said he had been "intellectually persuaded" that 바카라사이트 plans to impose a penalty were based on 바카라사이트 wrong "logic".

jack.grove@tsleducation.com.