Nicholas Barr (1989), 'The White Paper on Student Loans', Journal of Social Policy, Vol. 18, No. 3, July, pp. 409-17.
The White Paper, Top-Up Loans for Students (UK, 1988) announced that the publicly-funded student maintenance grant would be partly replaced by a loan. Though many aspects will be decided only after further consultation, the outline proposal is the following. Students will borrow up to £420 in the first year. No interest will be charged, but the loan will be indexed to the rate of inflation (that is, if prices double the student will repay twice the nominal amount he/she borrowed). The grant will be frozen, and as prices rise the loan element will rise until students are supported 50 per cent by the grant and parental contribution and 50 per cent by the loan. In consequence, the parental contribution is frozen but not abolished. The key element which has yet to be decided is how repayments should be arranged.
* This review draws on earlier work (Barr, 1987 and 1989; Barr and Low, 1988; and Barnes and Barr, 1988). Professor Mervyn King suggested the use of the National Insurance mechanism for student loans, and many people have contributed to the proposals, most particularly John Barnes and Iain Crawford. None of them should be implicated in remaining errors.