The Independent and the Canary both report that not only will Labour abolish Higher Education tuition fees, and reintroduce grants but will also consider how to give some form of relief on the current debt already held by students. This is about £76 bn, which is quite a bit, but if you consider it an investment in the nation’s human capital, it’s something that is worth borrowing for and can be paid through the capital borrowing account.
Student Debt
This would represent an increase in the national debt, currently about £1.7 trillion of 4%. The annual PSBR (deficit) is currently £60 bn so it would also have a demand creation effect as the interest payments/tax recoveries would [probably] be spent.
Actually the cost to the exchequer is the purchase of the privatised parts of the Student Loan Company plus the expected loan payments and interest. I expect the number’s are in the student finance paper above.