Violence is still the last refuge of the incompetent

Oh dear, there's been more riots in London. My views on the protests haven't changed, and the quote from my previous post still stands. This time round the police came out in force, leading to this gem of a comment that the BBC quoted:

From twitter: Why don't they stop sending a ridiculous amount of police out for small scale protests instead of cutting education spending?

Well, the last protest was "small scale" and look what happened there.

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Anyway, while all this was going on Nick Clegg did make a good point: "Examine our proposals before taking to the streets. Listen and look before you march and shout." And indeed there are some significant points in the proposals:

Point 1: you do not pay any tuition fees up front.

Point 2: you do not have to start repaying fees until you earn more than £21k (and then it's 9% of what you earn above the threshold).

Point 3: your student loan is written off (without, I believe, affecting your credit rating) 30 years after graduating.

I do wonder just how much of the loan the average person will pay back. Hmm... let's assume an annual loan of £10k, this works out as £3k or so cost of living and £6k or so fees. Interest rates will be 0% for people on incomes of £21k, rising to 3 points above inflation for people on incomes of £41k. Let's assume a linear increase and 2% inflation, so at £31k you pay 2.5% interest.

So, after your three years of university you'll end up with a £30k loan (£10k × 3 years at 0% interest). This is actually slightly better than the current system, in that currently you do pay interest (pegged at inflation) from day 1, although your loan before interest under the old system would only be £18k or so.

Let's say you go into work bang on the £21k threshold, and each year at work you get a 3% rise. That's probably a highly unrealistic scenario, but it'll do for some rough numbers. I vaguely remember there being nice equations to do with applying interest, but I can't remember what they were so I'm going to do this the old fashioned way with mad Excel skillz.

Year	Loan	Salary	Interest rate	Interest	Repayment	Result
1	30000.00	21000.00	0.00%	0.00	0.00	30000.00
2	30000.00	21630.00	0.16%	47.25	56.70	29990.55
3	29990.55	22278.90	0.32%	95.89	115.10	29971.34
4	29971.34	22947.27	0.49%	145.91	175.25	29941.99
5	29941.99	23635.69	0.66%	197.29	237.21	29902.07
6	29902.07	24344.76	0.84%	250.04	301.03	29851.08
7	29851.08	25075.10	1.02%	304.12	366.76	29788.44
8	29788.44	25827.35	1.21%	359.50	434.46	29713.47
9	29713.47	26602.17	1.40%	416.15	504.20	29625.43
10	29625.43	27400.24	1.60%	474.02	576.02	29523.43
11	29523.43	28222.24	1.81%	533.06	650.00	29406.49
12	29406.49	29068.91	2.02%	593.20	726.20	29273.49
13	29273.49	29940.98	2.24%	654.33	804.69	29123.13
14	29123.13	30839.21	2.46%	716.37	885.53	28953.97
15	28953.97	31764.38	2.69%	779.18	968.79	28764.36
16	28764.36	32717.32	2.93%	842.60	1054.56	28552.40
17	28552.40	33698.84	3.17%	906.46	1142.90	28315.96
18	28315.96	34709.80	3.43%	970.52	1233.88	28052.60
19	28052.60	35751.09	3.69%	1034.52	1327.60	27759.52
20	27759.52	36823.63	3.96%	1098.14	1424.13	27433.53
21	27433.53	37928.34	4.23%	1161.01	1523.55	27070.99
22	27070.99	39066.19	4.52%	1222.67	1625.96	26667.71
23	26667.71	40238.17	4.81%	1282.59	1731.44	26218.87
24	26218.87	41445.32	5.00%	1310.94	1840.08	25689.73
25	25689.73	42688.68	5.00%	1284.49	1951.98	25022.24
26	25022.24	43969.34	5.00%	1251.11	2067.24	24206.11
27	24206.11	45288.42	5.00%	1210.31	2185.96	23230.46
28	23230.46	46647.07	5.00%	1161.52	2308.24	22083.74
29	22083.74	48046.48	5.00%	1104.19	2434.18	20753.75
30	20753.75	49487.88	5.00%	1037.69	2563.91	19227.52

That's... not what I expected. The politicians weren't lying when they said that most people won't repay the full amount. Or were they? Just how much do you pay over the 30 year period?

I'll leave working that out as an exercise for the reader, though I'll give you a hint: they're still lying.