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    • MSE Steve
    • By MSE Steve 1st Oct 17, 2:12 AM
    • 70Posts
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    MSE Steve
    MSE News: PM pledges to raise student loan repayment threshold
    • #1
    • 1st Oct 17, 2:12 AM
    MSE News: PM pledges to raise student loan repayment threshold 1st Oct 17 at 2:12 AM
    Prime Minister Theresa May has said the student loan repayment threshold will be increased from £21,000 to £25,000 as part of a wide-ranging review of student finance...
    Read the full story:
    'Victory for graduates as PM pledges to raise student loan repayment threshold'

    Click reply below to discuss. If you haven’t already, join the forum to reply.
    Last edited by MSE Luke; 02-10-2017 at 12:39 PM.
Page 1
    • CKhalvashi
    • By CKhalvashi 1st Oct 17, 8:17 AM
    • 8,794 Posts
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    CKhalvashi
    • #2
    • 1st Oct 17, 8:17 AM
    • #2
    • 1st Oct 17, 8:17 AM
    Mrs May said: "We know that the cost of higher education is a worry, which is why we are pledging to help students with an immediate freeze in maximum fee levels and by increasing the amount graduates can earn before they start paying their fees back, amounting to a saving of £360 a year, while the Government looks again at the question of funding and student finance."
    Sorry, but I have no sympathy with this at all.

    The cost of higher education is a worry for some, we know that, however if the tuition fees hadn't been risen by 300% in the first place we wouldn't be seeing that issue now.

    I do agree with the policy, however I don't agree with it as surely a much more practical approach for most would be to bring the tuition fees down so it doesn't look so much like a scary number to start with.
    "I kada sanjamo san, nek bude hiljadu raznih boja" (L. Stamenkovic)

    Call me Remainer or Romaniac, but not Remoaner. It's insulting and I have the right to have my voice heard too.

    I can spell, my iPad can't.
    • silvercar
    • By silvercar 1st Oct 17, 9:06 AM
    • 36,208 Posts
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    silvercar
    • #3
    • 1st Oct 17, 9:06 AM
    • #3
    • 1st Oct 17, 9:06 AM
    It's a good move for all those graduates starting out, provided it doesn't have an effect on starting salaries ie employers thinking they don't need to increase starting salaries because new graduates have less to pay out of salary.
    • silvercar
    • By silvercar 1st Oct 17, 11:14 AM
    • 36,208 Posts
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    silvercar
    • #4
    • 1st Oct 17, 11:14 AM
    • #4
    • 1st Oct 17, 11:14 AM
    This para:

    "The only losers? The top 23% of graduate earners who’d have cleared the loan within 30 years – because as increasing the threshold means repaying more slowly, it increases their interest (but they can voluntarily overpay so it’s no biggie).
    There will be a group for whom the increase means they are saddled with far more interest and will pay that interest. The group that would have cleared the loan in full but now will have a chunk of extra interest added to their total.

    The changes also give an indication that the pre-2012 group will have their threshold unchanged in the future. Sure they have a much lower total loan (around 20k for those who had tuition fees around 3k, rather than ~40k for those on 9k) but on lower incomes their threshold remaining at 15k for the foreseeable future means they will feel the pinch. I'm reading the message as this group are not as important as the more recent and future students.
    • peter3hg
    • By peter3hg 1st Oct 17, 11:32 AM
    • 52 Posts
    • 58 Thanks
    peter3hg
    • #5
    • 1st Oct 17, 11:32 AM
    • #5
    • 1st Oct 17, 11:32 AM
    This para:



    There will be a group for whom the increase means they are saddled with far more interest and will pay that interest. The group that would have cleared the loan in full but now will have a chunk of extra interest added to their total.

    The changes also give an indication that the pre-2012 group will have their threshold unchanged in the future. Sure they have a much lower total loan (around 20k for those who had tuition fees around 3k, rather than ~40k for those on 9k) but on lower incomes their threshold remaining at 15k for the foreseeable future means they will feel the pinch. I'm reading the message as this group are not as important as the more recent and future students.
    Originally posted by silvercar
    The 23% are free to overpay by the difference so they will only be out of pocket if they choose to be.
    The pre 2012 loan threshold is already increasing at the rate of average earnings and currently stands at £17,775.
    • Lorian
    • By Lorian 1st Oct 17, 1:16 PM
    • 4,125 Posts
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    Lorian
    • #6
    • 1st Oct 17, 1:16 PM
    • #6
    • 1st Oct 17, 1:16 PM
    I don't think this will buy her any student votes. She'd would need to reduce the fees at least as far as £7.5K to get some traction.
    • glider3560
    • By glider3560 1st Oct 17, 1:21 PM
    • 3,348 Posts
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    glider3560
    • #7
    • 1st Oct 17, 1:21 PM
    • #7
    • 1st Oct 17, 1:21 PM
    Will this just encourage "wasters"?

    People who go to university for the parties etc, with no intention of ever getting a graduate level job when they graduate?

    • silvercar
    • By silvercar 1st Oct 17, 1:34 PM
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    silvercar
    • #8
    • 1st Oct 17, 1:34 PM
    • #8
    • 1st Oct 17, 1:34 PM
    Will this just encourage "wasters"?

    People who go to university for the parties etc, with no intention of ever getting a graduate level job when they graduate?
    Originally posted by glider3560
    Won't make any difference to them.
    • zagfles
    • By zagfles 1st Oct 17, 1:54 PM
    • 12,496 Posts
    • 10,496 Thanks
    zagfles
    • #9
    • 1st Oct 17, 1:54 PM
    • #9
    • 1st Oct 17, 1:54 PM
    The 23% are free to overpay by the difference so they will only be out of pocket if they choose to be.
    The pre 2012 loan threshold is already increasing at the rate of average earnings and currently stands at £17,775.
    Originally posted by peter3hg
    Indeed - plus that "23%" is probably way too many now - it was 23% with the £21k threshold so with a higher payment threshold and earnings indexation it'll likely be well under 23%. I'll wait for the IFS to do the maths... Or Martin?
    • Wilt
    • By Wilt 1st Oct 17, 2:14 PM
    • 60 Posts
    • 41 Thanks
    Wilt
    'Every single graduate earning over £21,000 will pay less'
    Can this be removed from the article? Most current graduates wont benefit unless govt pulls something for pre-2012 loans out of the bag.
    • Ed-1
    • By Ed-1 1st Oct 17, 2:36 PM
    • 2,043 Posts
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    Ed-1
    The 23% are free to overpay by the difference so they will only be out of pocket if they choose to be.
    The pre 2012 loan threshold is already increasing at the rate of average earnings and currently stands at £17,775.
    Originally posted by peter3hg
    The pre-2012 threshold increases with RPI, not earnings.
    • silvercar
    • By silvercar 1st Oct 17, 4:13 PM
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    silvercar
    Can this be removed from the article? Most current graduates wont benefit unless govt pulls something for pre-2012 loans out of the bag.
    Originally posted by Wilt
    To be fair the article is clearly only referring to post 2012 loans.
    • glider3560
    • By glider3560 1st Oct 17, 4:21 PM
    • 3,348 Posts
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    glider3560
    To be fair the article is clearly only referring to post 2012 loans.
    Originally posted by silvercar
    I think the article has just been updated

    • MSE Andrea
    • By MSE Andrea 2nd Oct 17, 11:29 AM
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    MSE Andrea
    Thanks folks, yes, the news story's been updated
    Could you do with a Money Makeover?


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    • agrinnall
    • By agrinnall 2nd Oct 17, 1:47 PM
    • 18,768 Posts
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    agrinnall
    I don't think this will buy her any student votes. She'd would need to reduce the fees at least as far as £7.5K to get some traction.
    Originally posted by Lorian

    As Martin explained on his section on 5Live today (from 12:50 - 12:55, curtailed because of events in Las Vegas) reducing the fees has no impact on how much is repaid for the vast majority who will never repay the full amount anyway, whereas the increase in the threshold means less to pay for anyone (except the very high earners) earning over £21K for as long as they earn at above that level. Even at £25K threshold it could add up to £360 * 30 years = £10,800. And if the threshold does increase annually as promised the saving will be even more.
    • robin58
    • By robin58 2nd Oct 17, 2:12 PM
    • 2,020 Posts
    • 2,111 Thanks
    robin58
    MSE a 'pledge' is not a 'victory' until the result is in black and andl has a parliamentary law to inforce it.
    The more I live, the more I learn.
    The more I learn, the more I grow.
    The more I grow, the more I see.
    The more I see, the more I know.
    The more I know, the more I see,
    How little I know.!!
    • Merlin's Beard
    • By Merlin's Beard 2nd Oct 17, 3:53 PM
    • 176 Posts
    • 831 Thanks
    Merlin's Beard
    Can this be removed from the article? Most current graduates wont benefit unless govt pulls something for pre-2012 loans out of the bag.
    Originally posted by Wilt
    Obviously if you're a pre-2012 graduate the government thinks you have less need of money compared to a post-2012 graduate on the same salary as you!
    Grocery Challenge June 17 onward; aim: £100/month; leftovers to date: £8.79
    • silvercar
    • By silvercar 2nd Oct 17, 6:00 PM
    • 36,208 Posts
    • 153,068 Thanks
    silvercar
    Obviously if you're a pre-2012 graduate the government thinks you have less need of money compared to a post-2012 graduate on the same salary as you!
    Originally posted by Merlin's Beard
    Pre-2012 students are more likely to be able to clear all their loan as their loans were for a far lower amount. Therefore the calculation is different as interest added will make a significant element of the loan. So lower initial repayments, by raising thresholds, will actually cost them more in greater interest that will be repaid.
    • Lorian
    • By Lorian 2nd Oct 17, 6:56 PM
    • 4,125 Posts
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    Lorian
    If they go to university and generate say £60K debt without expecting to earn at least £25K at some point then I'm lost as to see why they would go in the first place.
    • Ed-1
    • By Ed-1 2nd Oct 17, 7:59 PM
    • 2,043 Posts
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    Ed-1
    If they go to university and generate say £60K debt without expecting to earn at least £25K at some point then I'm lost as to see why they would go in the first place.
    Originally posted by Lorian
    But it's not a case of earn £25k and you've got to repay the full whack. It's a case of earn over £25k and you contribute 9% of your salary over the threshold. It's a tax cut. Expect the threshold to come down sharpish once a competent government get in as it can't be sustained at these levels of write offs.
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