I struggled with the same dilemma for many months but ultimately came to the conclusion that it was best for my son to follow the herd, take out the loans and as gpadsa says, see where life takes him. In the meantime I am saving equivalent amounts in a LISA and ISA. That means that:
- if he's not a big earner he will never pay off the loan anyway, and he has the money available in the ISAs to save or spend as he wishes
- if it does look like he's going to be a big earner then with the ISAs he will have enough available to pay off the loans, assuming they have grown at roughly the same rate as the interest on the loan.
- if he wants to go on and study further (a masters degree or whatever), then those savings could also be utilised when these is no loan available for support
I think the loans/graduate tax system is really not sustainable (very high and punitive marginal tax rates) and can see them being written off or substantially restructured in future. Best to follow the herd rather than be prudential it seems to me and be in a position to benefit from the graduate debt jubilee, if it comes.
There is a really good article on all this at monevator, which I found very helpful in further rationalising the decision. It helped me realise that the loans/graduate tax have a real option value.
https://monevator.com/student-loan/I have to admit that I am skeptical about whether degrees represent good value for money at all, especially in the humanities. Even better, in my view, would be to get an apprenticeship at a blue chip company and postpone the degree to later life, and see if it is wanted. Other than in tgescience/engineering/medical spheres, degrees are overrated in my view and are increasingly irrelevant to the skills needed at work. However, my son wanted to go and do his degree, so I hope it works out well for him. He's very much enjoying it as far as I can tell.