I like your reasoning, James, spot on!
Not just reasoning John, personal experience...
I pay £936 a year through my self-assessment to my Student Loan...Meanwhile, I have an outstanding balance of roughly £13.5k which is seen as a "debt" by any potential mortgage lenders. My girlfriend is in the same situation, with £14.5k of debt (she came from a lower income family and got a bigger loan - thus more to pay back...disinsentive? thought so!). We both earn between £25k and £35k a year (i'm not telling you exactly ) but can't get a mortgage anywhere as we're not good candidates.
Makes me wonder why we both bothered with uni...we were both hit by public sector cuts/recession/global economic crisis...she was applying for the Probation Service when they stopped recruiting in the recession, and I never even got a chance to apply as most Town Planning jobs were pulled from adverts shortly before I graduated. We both did "vocational" degrees, but still didn't get work.
Not quite sure where all these people who now won't go to university are supposed to find work either...there's not enough to go round as it is!
Edit: Apologies for flirting with the political line...