'Don't pay your kids tuition fees upfront' Discussion Area
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I wouldn't lose sleep over where the debt lies with the state or graduate at the end of the day it is in the Governments hands, massaging the figures may make them feel better that is all and keeps the bond markets happier.
Many people will never repay the loans. Many "professions" stagnate in the £40K mark and at this level massive right offs will occur.
As for saying finance is to be applied for on UCAS forms, simply say yes you don't have to take it.
As far as whether it is tax or a loan if you decide to emigrate and never come back then it would be interesting to see how they could pursue you. If you reenter the country after 20 years and you have to start repaying the inflated loan it will never get repaid and you will be no worse a position.
By assigning the debt to an individual certainly makes it a golden handcuff. If it were free and taxed and you simply emigrated then the link would be lost.
If you can afford to fund your off spring entirely and not take up the finance then I think it would be a great gift to your child.
As most can't IMO you would be better off keeping what capital you have towards a deposit on a property,for example, for them, when they graduate.
As Martin says if you contribute a large amount and then for whatever reason your child can't maintain the repayments and the debt gets written off then you will have "overpaid".
IMO the Government is storing up a time bomb as a lot of this debt will never get repaid.
Like another poster said if you are going down this route parental income/contribution in this loan/grant calculation should be totally ignored.
IMO it should be a tax on all graduates since say 1980, could be a sliding scale, taper relief for older graduates from that date.
Interestingly there is alot of ballyhoo about the 50% tax rate for high income earners yet this is what the government is proposing for all graduates, over £40k ish equivalent in 4 years time (40% + 9%).
Like cutting it's own costs the government should be looking to bring down the cost of degrees - 2 years maybe for most and "declassifying" jobs that need a "degree" to do them."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »
IMO the Government is storing up a time bomb as a lot of this debt will never get repaid.
.
Having researched this thoroughly with a son starting in 2012 I couldn't agree more. There was an article in the press recently saying the govt wouldn't start to see a return on student loans for at least 35 years. They have got the basic sums so wrong that I am afraid any graduate within this new system will find they have to make bigger and bigger contributions as govt find less and less people repaying anywhere near the amount borrowed, let alone the interest. I can see the scheme collapsing in few years - next govt maybe?.
To look at the decision whether to take the loan (whole or partial) just on the finances is only looking from one point of view.
Surely there should be a system where people are motivated to get higher education and work harder for more money - whereas under this cockeyed scheme it would 'save' money if you over borrow, underacheive and under work.
Offering bigger loans to those from poorer families is all spin and smoke and mirrors as the repayments are the same irrespective of loan borrowed. Someone from a poorer background will repay the same as a rich kid if they end up doing same job.
IMO the result will be more and more of the unneccessary lower value degrees and Unis as more and more people realise it's a free ride or low cost ride.
thanks MSE for a clearer guide as to paying upfront - makes for interesting and alarming reading. My son doesn't have clue what he'd like to do after Uni - but on this advice the short answer is do nothing and be educated on govt money and then live on benefits. win win0 -
Yes what an appalling discriminatory mess. Hold your heads in shame Lib Dems. Yes do dare look us in the eye. Note the deep disappointment and resentment you will see behind eyes perhaps a good deal more intelligent than your political ones. Britain would be a fairer nation tomorrow if you had kept your promises.
I sat through a talk at an established University earlier this week to hear that about 25% on a particular science course get First Class honours degrees, about 55% get 2.1, and the rest get 2.2. No one lately has got Third or less.
That got me musing that a degree of shading has occurred over the years and I can't for the life of me think what is good about it for graduates or anyone else except for those who spin their hyperbole at higher educational establishments' marketing events.
I got a 2.2 thirty odd years ago (when people had to be special to get First Class honours degrees and at the other end of the spectrum, people actually failed. None of yer resit nonsense and "Don't worry if you don't like exams, you can choose coursework assessed modules instead").
I sat a whole set of fierce final exams over several exam periods throughout my three year course. They were indeed final. I have actually been discriminated against in the past 10 years because my 2.2 was measured against more recent 2.1's and found lacking by 1 digit after the dot. But that's no discrimination at all compared to the discrimination now waged against students in families who are making decisions like "Wow .... £9,000 a year for three ... no four years (because Batchelor degrees are worth about what non-honours degrees were worth thirty odd years ago and now you need a Masters) ... ok so Mum and Dad will pay for two years and little Jimmy will borrow £18,000 from SLC to help him keep his total student debt down to something sensible, right?" WRONG!!!
VERY WRONG!!!
The current scheme is unlawful, isn't it, in so many ways? And right now, literally, as up and down the country 17 and 18 year olds are trying to make sense and value the worth of one outfit called "university" against the next, this £9,000 a year tuition fees nonsense is skewing the pitch for a whole intake currently in the UCAS system. ('Cohort' they call it now in higher educational pro speak).
I'd love to know who is in cohorts with who actually.
Come on you Human Rights Legal specialists who graduated in recent years ... contribute. Or are you paid too much not to contribute, or perhaps your employers' version of what's right and wrong is too distracting or conflicting for you to tackle something truly for the benefit of the public good just yet?0 -
Oldernotwiser wrote: »Sorry, I don't agree.
Many retired expats pay UK taxes on their government pensions so I can't see how this couldn't have been arranged for the payment of a graduate tax as well.
It would be difficult for HMRC to tax income earned in another country if you weren't a UK resident.
With a "loan" it is a bit like a golden handcuff it is still there to be tackled should you ever return to the UK."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
I am sure I have said something like this before, but MSE should publish a simple short declaration clause for the 2012 cohort to add to their SLC loan agreements at a suitable point in time which should be sufficiently publicised in advance in order to swamp the system in some deliberate 'straight between the eyes/never had a chance to move' fashion to remind the government that the cohort is signing under duress and that use of the clause is approved by MSE's Martin Lewis, government adviser on Student Finance matters.
Naturally legal opinion would be required to give the clause maximum efficacy and also timing of such a campaign would be crucial.
Martin might thereby release the cohort from this disgraceful harness and that would serve this government right and show them what is so WRONG!0 -
Don_Draper wrote: »Anyone have a sense of when the government will make up its mind whether it will introduce an early repayment penalty and on what terms?
We have been waiting for this detail for months. Until we know this it is impossible to make a definite plan.
We are filling in the 2012 UCAS forms right now; it asks if the applicant is taking student finance or not. Don't know how to answer.
Does anyone know what the hold-up is on producing this crucial detail?
Thank you.
The consultation closed on tuesday - we submitted our response (ill be publishing it in my blog when i get time to turn it into blog format)Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 0000 -
2sides2everystory wrote: »I am sure I have said something like this before, but MSE should publish a simple short declaration clause for the 2012 cohort to add to their SLC loan agreements at a suitable point in time which should be sufficiently publicised in advance in order to swamp the system in some deliberate 'straight between the eyes/never had a chance to move' fashion to remind the government that the cohort is signing under duress and that use of the clause is approved by MSE's Martin Lewis, government adviser on Student Finance matters.
Naturally legal opinion would be required to give the clause maximum efficacy and also timing of such a campaign would be crucial.
Martin might thereby release the cohort from this disgraceful harness and that would serve this government right and show them what is so WRONG!
Not quite sure i understood this - but just a note - Im not a govt advisor on student finance.
I head the independent taskforce - which has Unis and NUS backing. I of course talk to David Willets, but equally met with Gareth Thomas (labour shadow higher education minister) who also supports the taskforces aim.
Martin Lewis, Money Saving Expert.
Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 0000 -
My personal concern in all this is that I let my daughter get into this level of "debt" starting 2013 only to find it all rehashed at a future point leaving her in the worst position of all.
Fully agree with Martin's interpretation thus far.
"Luckily" we have one already under the current scheme but finding someway of balancing their position so that they end up in a similar position is key to us.
It could be that my daughter may be better off:shhh:"If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
Don_Draper wrote: »Anyone have a sense of when the government will make up its mind whether it will introduce an early repayment penalty and on what terms?
We have been waiting for this detail for months. Until we know this it is impossible to make a definite plan.
We are filling in the 2012 UCAS forms right now; it asks if the applicant is taking student finance or not. Don't know how to answer.
Does anyone know what the hold-up is on producing this crucial detail?
Thank you.
The last thing I read about this, was this article dated the 9th of September:-
http://www.bbc.co.uk/news/education-14836202Student loan early repayment penalty proposal 'crazy'
Coalition proposals to charge graduates in England for repaying student loans early would be ineffective and costly, the think tank CentreForum says.
The government is currently consulting on a suggested plan to penalise early repayment, targeting either high earners, large repayments, or both.
It wants the penalties to make the system "more progressive" and says they should not hit those on modest incomes.
But CentreForum says most early payments are not made by high earners.But CentreForum, which describes itself as liberal, argues that most of those who overpay do so because of debt aversion, not because they are wealthy.
The median income of those making such payments if £18,400, it points out, quoting a figure from the government's consultation document.
Report authors Tim Leunig and Gill Wyness said: "Introducing a system of early repayment penalties for affluent graduates, or those who pay off large chunks of their loans, is crazy."
They also said:- It would be difficult to calibrate such a system effectively
- The sums raised would be small relative to the costs of administrating the system
- Early repayment reduces costs to the Student Loans Company, and therefore the government
- The very rich bypass the student loans system anyway, by paying their tuition fees upfront
Mr Cable is said to have supported introducing an early repayment penalty as the Liberal Democrats and Conservatives sought to reach agreement on raising fees.0 -
How do you know it's a laudable aim gone wrong? Why did you shiver with fear? How do you know that's it's wide of the financial mark? How do you know that she misunderstands the system?A laudable aim gone wrong.
"We've a great story. A girl's saved up nearly £30,000, so her parents don't have to borrow for her £9,000 tuition fees – she's a role model."
I almost shivered with fear when a journalist told me this. While it's bravo for the saving habit, the idea of this being a role model to follow couldn't be further off the financial mark for many. It's a symptom of the widespread misunderstanding of the changes to English student finance in 2012.
You have offered us nothing to support your view.
The student in question might know that she is going to earn a large salary, after all she has managed to amass £30,000 before she has even taken a degree. She might be operating under scenario 3.
Why are using such sensationalist journalistic language? It's perfectly rational for anyone with a bit of money to contemplate paying student fees up front.
Why do I get the feeling that you are trying to belittle people contemplating paying up front when, as you said yourself, this is a very difficult decision for most of us who don't own a crystal ball?0
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