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Government fails to honour student loan promise
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The repayment threshold will also remain at £15,000 for the next 12 months. Had the Government used a negative RPI rate to calculate this, the threshold would have reduced and borrowers would have started repaying earlier and ended up paying more. Setting interest at 0% has prevented this from happening.
What about the positive RPI that was being used for previous years? Surely, if the justification for not setting a negative interest is that it would lower the repayment income threshold, then a positive RPI over the years would have meant the repayment threshold year on year would have increased?
As to borrowers repaying earlier, costing more, yes it would, taking into account negative inflation. But by using inflation in this respect to justify not repaying earlier, it conveniently overlooks the fact that setting an interest rate above the actual RPI means borrowers are paying more regardless.
Quote:
Originally Posted by SLC spokeswoman
The decision (on 1998-onward loans) has been taken because loans are already well subsidised, and it would be difficult to justify to taxpayers a situation whereby students take out loans in 2009/10 and their balances are immediately reduced.
The last time I looked, the borrowers making repayments are taxpayers too!
Although I disagree with the SLC's justification I personally can't argue with a 0% interest rate. I did and still maintain that the CPI would be a better measure of inflation (currently at 2.9%) to use for things like student loans as it is an index more representative of the spending habits of a student or someone just out of university. So using CPI would have benefitted students in the past, but will go against them in the current climate.
In a word, neither death, nor exile, nor pain, nor anything of this kind is the real cause of our doing or not doing any action, but our inward opinions and principles - Epictetus.
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Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?
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Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?
Only if they sober up for long enough.
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If you go to the number 10 petition website, I found it by searching for student loan. It's called: 'Petition to: Decrease Student Loans in-line with RPI Inflation as promised.'
Already 115 signatories.
If you go to the number 10 petition website, I found it by searching for student loan. It's called: 'Petition to: Decrease Student Loans in-line with RPI Inflation as promised.'
Already 115 signatories.
Fortunately for myself, my loan is pre 1998. But I do feel strongly about how this has been dealt with, the post 1998 loans just been zero% they should infact be -0.4%. As I believe is in your contract.
I have also signed the petition 127 signitures at the moment...
As RPI inflation is down purely as a result of mortgage interest rates dropping and CPI is still significantly above the Bank of England target, this seems totally reasonable.
What would be fair though is if the -0.4% lost this year is knocked of in future years when the RPI inflation rate goes positive again.
R.
Smile, it makes people wonder what you have been upto.
It's a very poorly written petition - the "more details" say:
"The current student loan interest rate is 1.5%, but it is meant to be linked to RPI inflation which is negative, it has gone down slowly from 4.50%, but stopped there, this petition is to show that students are not happy that it is not decreasing even though inflation is, it is meant to go up at the same rate that prices do, prices are decreasing, the loans should decrease."
This seems to have been written by someone who doesn't know how the interest rate is supposed to work.
I was thinking that myself, if only to highlight the current issue - that they shouldn't stop the interest rate being linked to the RPI as it suits them.
As RPI inflation is down purely as a result of mortgage interest rates dropping and CPI is still significantly above the Bank of England target, this seems totally reasonable.
What about when RPI was 4.8% and the CPI was 3.1% (with the BoE target at 2.9%)? Applying the same logic you have used, surely the interest rate for student loans should have been less than the 4.8% it was back then as this would only make it "reasonable".
Targets are exactly that - a target. It does not represent the current climate. It is completely unreasonable for you to make a comparison and draw a conclusion based on how it relates to a target.
In a word, neither death, nor exile, nor pain, nor anything of this kind is the real cause of our doing or not doing any action, but our inward opinions and principles - Epictetus.
It's a very poorly written petition - the "more details" say:
"The current student loan interest rate is 1.5%, but it is meant to be linked to RPI inflation which is negative, it has gone down slowly from 4.50%, but stopped there, this petition is to show that students are not happy that it is not decreasing even though inflation is, it is meant to go up at the same rate that prices do, prices are decreasing, the loans should decrease."
This seems to have been written by someone who doesn't know how the interest rate is supposed to work.
It's tempting to start a better one.
Not only that, but someone with a poor grasp of English grammar and punctuation.
Normally, I don't care about people's spelling or grammar ability as long as I can understand what they're trying to say, but this was presumably started by someone who went to university. Christ all-bloody-mighty. Can't they at least make an effort to pretend that having a university education actually means anything these days?
I would have signed - although I have a pre-1998 loan, I don't like the precedent that this move sets - but I'm not even going to touch that petition with a sh**ty-stick.
I've just seen this and it makes me very angry. I took out my loan on the basis that I would always pay back the same, in real terms, as I borrowed. That's not what's happened here. The government claims that "not increasing" the £15,000 repayment threshold makes this better but frankly that's ridiculous - trying to make a bad decision sound better by saying "we could have done something else" doesn't cut it.
I will be writing to my MP and I very strongly encourage everyone else to do the same thing.
I have no financial qualifications or experience. I only answer questions if I am confident that I understand the issues involved, but please never rely on any suggestions I give in my posts without checking elsewhere.
I've just seen this and it makes me very angry. I took out my loan on the basis that I would always pay back the same, in real terms, as I borrowed. That's not what's happened here. The government claims that "not increasing" the £15,000 repayment threshold makes this better but frankly that's ridiculous - trying to make a bad decision sound better by saying "we could have done something else" doesn't cut it.
I will be writing to my MP and I very strongly encourage everyone else to do the same thing.
as you took out your loan on the basis that you would always 'pay back the same' , presumably you will be repaying the tax payers as the March 2008 RPI was 3.8% but you are now only paying 1.5%.
or maybe not..
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps. Take care over copyright. Use excerpts and links rather than copying long text. This site asserts copyright on all comments posted on the board.
Pls be nice to all MoneySavers. There's no such thing as a stupid question, and even if you disagree courtesy helps.
Government fails to honour student loan promise
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