Fee increase

matw2

What are people's views on the proposed rise in tuition fees?

I am currently a third year student at Keele University, and my view is that people will be put off university if fees rise to this level (proposed £7000 per year). My understanding of the current student loan system is that we repay 9% of any earnings above £15000. However, the interest rate on the loan is at the moment 1.5% (although I recall it was at nearly 4% a year ago) which is applied to the entire loan. So, a person with a £32000 debt earning £20000 per year would be repaying £450 per year (9% of £5000) but paying £480 interest.

The current interest rate is also at an unprecedented low rate, this can be expected to rise as the bank of england base rate rises in the years to come.

Many degrees will not lead to jobs with especially high pay, and it is not at all unlikely that graduating students would never repay their loans. Instead, when retirement age is reached, loans will be cancelled with the retiring graduates having paid 40 years of interest and never dented the amount of the loan.

Any rise in tuition fees will undoutedly see a drop in student numbers, because it is highly unlikely that graduate salaries will rise accordingly. Their is little temptation to saddle yourself with a lifetime of debt without seeing any spectacular rise in earning potential.

Shoshannah

I am lucky in that when I started my course, tuition fees were capped at about £1200 and paid for by my LEA. My sister, who started her course two years later, pays the current amount via an SLC loan.

I agree that on the face of it, increasing tuition fees further may put off some people from low income families. However, because we know that SLC debt is the cheapest debt you can have and that there is no need to pay the money back quickly, then I personally would tell these students that they needn't be put off.

The trouble is, in my view, that education about money is not particularly good in schools. Certainly at my school, the preparation for life in charge of your own finances was dismal. If we can better educate the potential students about student loans, maybe more would be encouraged to study.

I am from a low income family. I was educated at a state primary but obtained a scolarship at the local private secondary school. In the sixth form, we had a 'talk' about student finances. The only thing I was told about student finance was (in these words): "as most of your parents pay for your school fees here, they will probably just continue to put that money towards your university costs." Thanks (!) Even if it was true, and it probably was, I don't think it really encourages young people to take responsibility for their own money.

I wasn't told anything about how the loan works. As a naive 18 year old, I applied for the loan not really thinking about how or when I was supposed to pay it back. I made an attempt at reading the regulations but probably didn't really understand. Three years into my five year course, I was wiser and finally understood the implications of the loan and how it worked. For a year I got very depressed about the debt and it did cause me some stress. Now I am a few months off graduation and feel much more relaxed about it. The view that it is a 'graduate tax' rather than a onerous debt makes me feel a lot more positive about it. I now regularly put money into savings and when I start work I will pay off the minimum amount each month until the debt disappears or I reach 65, whichever happens first. I will put most of my financial effort into savings and pensions and things.

Anyway, I'm sure those five years between applying for loan and finally understanding it could have been greatly reduced if I'd had a little more education about money earlier on! I was always sensible with money (I worked after school, saved most of my money and paid rent to my parents) but really didn't have a clue about how the student loan worked!

Didn't mean to ramble so much, sorry. Summary: better education for the kids so that student loans don't scare them off unecessarily!

tomsolomon

What would these fees increases mean for someone who supposed to starting a three year foundation course in September?

Oldernotwiser

tomsolomon wrote: »

What would these fees increases mean for someone who supposed to starting a three year foundation course in September?

Absolutely nothing; these changes are only being discussed at the moment and they wouldn't be introduced for people part way through a course.

Rosie75

I'm not sure they're even being discussed. The increase to £7000 was one of a number of suggestions made by Vice-Chancellors in a report: apparently it has received a muted response from ministers. I doubt the government has the appetite for this at the moment - I'd say it's unlikely anything will change before the general election (though the significant funding cuts the government has made to the higher education sector this year makes a rise in tuition fees likely in the not-too-distant future).

WolfSong2000

Considering the fact that Uni's are losing money with the current tuition fees, I wouldn't be surprised if they go up...I'm an English student at a Scottish uni, so my fees are relatively low, but I do resent having to pay them when my Scottish friends don't (would save me almost £10,000). I reckon it should be the same across the board, one way or the other, but then again, what do I know?

pinkshoes

matw2 wrote: »

What are people's views on the proposed rise in tuition fees?

I am currently a third year student at Keele University, and my view is that people will be put off university if fees rise to this level (proposed £7000 per year). My understanding of the current student loan system is that we repay 9% of any earnings above £15000. However, the interest rate on the loan is at the moment 1.5% (although I recall it was at nearly 4% a year ago) which is applied to the entire loan. So, a person with a £32000 debt earning £20000 per year would be repaying £450 per year (9% of £5000) but paying £480 interest.

The current interest rate is also at an unprecedented low rate, this can be expected to rise as the bank of england base rate rises in the years to come.

Many degrees will not lead to jobs with especially high pay, and it is not at all unlikely that graduating students would never repay their loans. Instead, when retirement age is reached, loans will be cancelled with the retiring graduates having paid 40 years of interest and never dented the amount of the loan.

Any rise in tuition fees will undoutedly see a drop in student numbers, because it is highly unlikely that graduate salaries will rise accordingly. Their is little temptation to saddle yourself with a lifetime of debt without seeing any spectacular rise in earning potential.

The student loan interest rate is based on the RPI in March, so last year we paid at 4.8%, and this year it's 3.8%, which will then drop to 2% in September I believe due to this year's RPI. I heard rumour that this had been changed to start from now, although I haven't been informed of this by the SLC!

Many graduates with arts degrees (50% I think) will now end up with jobs paying no more than if they'd left school with A Levels.

I think the £7k tuition fees are ridiculous, and in 30 years time, the government is going to be left with £1 Millions of unpaid loans that they have to write off, adding more to the country debt.

If they want these higher tuition fees, then they should go back to the old system where university is just for the top 10%, and everyone else should go into employment or apprenticeships (which need to be brought back).

Many employers can't discriminate against which uni someone went to, but many want a 2:1 as well as 3 good A Level grades (As, Bs or Cs) in "proper" subjects. The quality of graduate applicants has gone massively downhill in recent years.

Voyager2002

pinkshoes wrote: »

I think the £7k tuition fees are ridiculous, and in 30 years time, the government is going to be left with £1 Millions of unpaid loans that they have to write off, adding more to the country debt.

If they want these higher tuition fees, then they should go back to the old system where university is just for the top 10%, and everyone else should go into employment or apprenticeships (which need to be brought back).

Many employers can't discriminate against which uni someone went to, but many want a 2:1 as well as 3 good A Level grades (As, Bs or Cs) in "proper" subjects. The quality of graduate applicants has gone massively downhill in recent years.

The fact is, providing a university education costs more than seven thousand pounds per student per year. What is ridiculous is expecting universities to maintain standards without giving them the necessary resources. One sensible solution would be for universities to charge a fair market price for their offering: judging by fee levels in the USA our top universities would then charge far more than at present, but would continue to give good value for money. Another would be for universities to be free and financed out of general taxation, as in most of Europe, but then we would need far higher rates of income tax than at present.

And I think it is a mistake to talk about how much "extra" someone earns because of having a degree. In a world where you need to be a graduate in order to get even a basic job, having a degree makes the difference between being able to work and facing long-term unemployment.