University cap rise makes little sense

To start with let's make something clear - the government are not raising the cost to go to university they're allowing the universities to charge more; it's up to each university what it does.

So a student wishes to go to university and can't afford the fee, they apply for a student loan. Where does that money come from - the government.

If the universities take advantage of the raising of the cap this means that the government pays out more money in loans. However this is a loan and as such will be paid back... or not. You only start to pay after your earnings reach a certain threshold, which is being increased from £15k to £21k and it's written off after 30 years anyway.

To put this together the government is placing itself in a position whereby it will be loaning out more money while at the same time making it less likely that it will be paid back at a time when they're trying to make cuts and the graduate unemployment figures are rising.

Head-scratching.