Should I Pay Off My Student Loan? 2008/09 article discussion

Bigwigg

Numenor wrote: »

I'm sorry you feel we're being unfriendly; we're simply disputing your claims. As for illness, I was only applying your logic - men and women can both get ill, yes - but your assertion was that it's unfair because women have babies and men don't. We disagree with your point. Women can choose whether to have babies or not (assuming the individual is actually fertile), and when, to a large extent. Therefore they already have one up on someone with a long-term illness - you can't choose how or when you get ill.

I think you'll probably find that none of us disagrees that women in general will be paying back for longer due to lower wages. I for one detest the fact that there is such disparity between the sexes in that respect. But one cannot say that one is being discriminated against by something which ignores gender by its very definition.

I'm understanding what you mean about people with a long term illness not being able to choose when that happens. I think that's probably a whole other debate about whether they should pay interest. You're right that women choose to have babies, but for the sake of the continuation of humanity, we'd better hope that they do and not stop because of their student loans!

And no, the student loan system doesn't directly discriminate against gender, it just goes on what you earn, of course. But indirectly, women are disadvantaged by the PAYE sytem because they're likely to be paying it back for longer for various reasons I stated before(and I know you can make extra payments but I'm sure the majority of payment are PAYE). If it worked like a mortgage, like it used to, then we wouldn't have this disparity between the sexes, each gender would have an equal chance of paying back the same amount, not that I'm saying I want that system, for many reasons its much worse, but it does give more equality to the sexes.

Bigwigg

HangTime wrote: »

Well, if RPI in March is negative, things could get interesting!
That would mean that from September, SLC would have you pay you interest on everything you owe. That means that women on maternity leave would by your logic be BENEFITING, not losing out, because the lack of repayments would mean that their outstanding balance would remain high, thus meaning that they get paid more interest on it.

As for women going part time after maternity leave, that's their choice. Nobody is holding a gun to their heads and saying "you must have a baby and give up fulltime work". In general I strongly disagree with claims of discrimination in cases where people are 'losing out' because of a choice they have made.

Well I didnt' know that, about in RPI goes to negative they have to pay us interest! Maybe my increasing student loan can come into it's own at last!I can't see it happening personally but I guess we don't know what's going to happen the way this recession is speeding up at a lightening pace.

Yes, it's womens choice to have babies, and their choice to go part time but I'd like to think that some men also had a choice in these decisions and that men benefit from them. We could also debate the high cost of childcare and whether that makes it cost effective for women to return to work, and lack of part time professional jobs available but I think that'll take us off the point some what.

Bigwigg

HangTime wrote: »

If you look at the flipside of your argument, can't you see that if there was some new decree that interest rates are halted for people on maternity leave, that would be discriminating against men, because they don't have the option of going on maternity leave?

It isn't really valid to say that women will pay back more than men over the term of a student loan, if the terms are different in length. Lets say (figures plucked out of thin air as an example, don't read anything into them) a man pays back £13000 over 10 years and a woman pays back £15000 over 15 years. Yes, the woman has had to pay back an additional £2000, but she's also held onto the loan for an additional 5 years, so it's not an apples to apples comparison. The longer the term of any loan, typically the greater the total amount payable will be, because the cost of that borrowing is charged over a longer period. This is a fundamental to how finance works, and I can't see any justification for trying to create some kind of loophole for women to exploit.

Well, if we look at the flipside of your arguement, what you're then saying is that anything that women qualify for by having babies is discriminating against men, because they can't qualify. So statutory maternity pay, health grant etc is discrimination because you can't get it?

I understand that if you have loan longer, than you pay back more, but that's really the whole problem because women on average will have their loans longer because of the PAYE system. If was just like a mortgage system of repayment, we wouldn't have this problem, each gender would have an equal chance of paying back at the same rate. So, it wasn't really about creating a loophole, just something to tip the scales back in favour of women in a system that disadvantages them.

Numenor

The mortgage-style system isn't perfect though. My loans are mortgage-based, and due to not earning over the threshold for years I've deferred payments - all the while accruing interest. People who earned over the threshold had to pay theirs off sooner - but does that mean that they have the advantage of being loan-free sooner, or I had the advantage of not having £100 a month taken from my salary for a few years? Really, it can be taken either way, with both parties feeling hard done by in one way or another.

I only really felt annoyed when my latest deferral form came through, two days after I'd had a job offer at a wage over the threshold. I obviously then could not state in good faith that "I do not expect my monthly pay over the next three months to exceed X", because as of two days earlier, I knew it would. Why did I feel aggrieved? Because they'd sent the deferral form out TEN days earlier by second class post. Had I received it three days sooner, I could have filled it in and sent it off, and not had to start repaying yet. I'm annoyed about it, but I don't consider it discrimination.

MuffyMan

Chris2685 wrote: »

How can you be responsible for your childrens student loans?

Since the government assesses whether my children get a grant based on RHI (residual household income, ie my earnings) then it's my fault that they have to pay fees at all! As usual the government rewards people who make no contribution to the exchequer (or those who are rich enough to pay an accountant to hide their earnings) while penalising those who work hard and contribute. Those of us in the middle are just seen as a big cash cow which can be constantly milked to pay for their disastrous social engineering experiments which always backfire. They have already taxed me to the max, now my children are also being taxed on my earnings so I don't think it's fair that they should be saddled with huge debts because of that!

Oldernotwiser

MuffyMan wrote: »

As usual the government rewards people who make no contribution to society (or those who are rich enough to pay an accountant to hide their earnings) while penalising those who work hard and contribute.

I'm sure that all the lower paid workers will be really happy to hear that they make no contribution to society. What a blinkered view of the world you must have!:mad:

MuffyMan

Chris2685 wrote: »

If the RPI is still negative when they take their next 'rate level setting reading' (or whatever you want to call it), would that mean that they would have to set the student loan rate to that? If so, does that mean we would be getting paid for our student loan?

According to the SLC web site (http://www.slc.co.uk/statistics/facts_figures.html) the rate is set between 1 September 2008 to 31 August 2009 and fixed for that term. I suppose we should be grateful that they have made a special effort to reduce it to 2% but they are under no obligation to change it until August, by which time the RPI likely to be back up again. I wouldn't expect them to do us many more favours, execept maybe lowering it to 1% if RPI gets to 0 or negative. As for paying us for having the loans? Dream on.

MuffyMan

Oldernotwiser wrote: »

I'm sure that all the lower paid workers will be really happy to hear that they make no contribution to society. What a blinkered view of the world you must have!:mad:

Fair comment and I agree that my post was poorly worded. I didn't mean no contribution to society, I meant to the exchequer. Post edited accordingly and thanks for pointing that out. Apologies, I'm just having a bad day!

rb10

MuffyMan wrote: »

Fair comment and I agree that my post was badly worded. I didn't mean no contribution to society, I meant to the exchequer. Post edited accordingly.

We know what you mean, but I'm sure that many of the people you are talking about would say they pay plenty to the exchequer. Ok, less in real terms, but as a proportion of income and wealth, it's still significant.

(I'm not having a go at you, as I know exactly what you mean, I'm just pointing it out )

rb10

MuffyMan wrote: »

According to the SLC web site (http://www.slc.co.uk/statistics/facts_figures.html) the rate is set between 1 September 2008 to 31 August 2009 and fixed for that term. I suppose we should be grateful that they have made a special effort to reduce it to 2% but they are under no obligation to change it until August, by which time the RPI likely to be back up again. I wouldn't expect them to do us many more favours, execept maybe lowering it to 1% if RPI gets to 0 or negative. As for paying us for having the loans? Dream on.

Look at this thread, from the first cut in December. It's not just them being generous that has led to these rate reductions, it is acutally an obligation. No 'special effort' there. And if the relevant base rates fall further between now and August, then they are obliged to reduce the loan rate accordingly.

If RPI gets to, or near, 0, in March, then I would fully expect the loan rate for 2009/10 to be exactly the same figure. That is just following the T&Cs. I would however expect them to find a get-out clause if it went negative.