As we’ve been saying, the student finance sector is working perfectly

We’ve pointed out, just recently, that the student loan sector is working just perfectly. For we’re all being confronted with the - high, even appalling - cost of sending 50% of the age cohort to university.

We may not like the information being transmitted but that’s an incentive to change what is being done rather than to try and hide the price.

Exactly so. We are not saying that we necessarily approve of this specific solution, just that seeing the price means people are now thinking of a solution:

Kemi Badenoch has said the Conservatives would scrap the “unfair debt trap” of high interest rates on student loans, piling pressure on Labour ministers to tackle the growing outrage over the high costs.

Some vast proportion of student borrowers do not replay their loans - either in part or full. Thus the problem is the same as with Wonga and other high risk lenders - the interest rates necessary to repay all the loans must be high on those few repaid.

The shadow education secretary, Laura Trott, said the loans should not rise faster than RPI inflation, a move which would cut the size of the loans for millions of graduates who started courses after 2013.

She said the change would be funded by cutting tens of thousands of university courses that do not provide “value for money” for students.

It’s not so much value for students as value for society. But still the right conversation is being had. The nation’s output of whingeing and grievance studies - the people who do not repay their loans - is paid for by the high interest rates on the loans to the engineers and scientists. That we see those costs in those high interest rates is exactly - and only - what is producing some actual thought about how many whinge graduates we really desire*. Changing who pays, or how, for those educations in grievance does not change the cost. Which is why having such open prices is to be applauded - it forces thought as to what is being done by being clear and obvious.

The current system is very, very, expensive. The prices on loans reveal this to us all. We may well not like prices, might not want the information they convey to us, but prices are information all the same. And isn’t the world a better place when we run and manage it on the basis of information, reality?

Tim Worstall

*We may have revealed our views on certain degree courses there.