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UNIVERSITIES Discounts for graduates who pay off their debt early have advantages, says Joanne Christie
Anyone hoping to get a university place this year is likely to be feeling anxious. With a record number of applicants and universities facing funding cuts, demand is far outweighing supply. At last year's party conference, the shadow universities spokesman David Willetts outlined the Conservative's plan to fund an extra 10,000 places by offering those with student loans a discount if they repaid their debt early.
As the general election looms and the funding crisis deepens, the proposal has come under closer scrutiny. University of Worcester vice-chancellor David Green argues that with savings rates so low, many graduates would make repaying their loans a priority if they were given discounts. However, both the university think-tank Million+ and the National Union of Students have questioned the costings, while the higher education minister David Lammy has described it as "fatuous" in the House of Commons.
The Tories say the policy would encourage early repayments to the tune of 1 per cent of the entire 30bn student loan book bringing in 300m, which they say is enough to fund 10,000 students for three years.
But there are concerns about the estimates. "We've got this thumb-in-the-air figure of 1 per cent of the...