Oh dear terrible report on student loans

epm-84

http://www.moneywise.co.uk/tv/2010/10/19/the-student-loan-swindle?utm_source=Newsletter2010-10-19&amp%3Butm_medium=Email&amp%3Butm_campaign=ContentPromotion

I've tried to leave a comment but they've been blocked as a 'spam prevention measure'.

Loans aren't interest free while you're at uni and 1.5% is lower than you should expect for interest as the government's RPI target is 2%. I don't know what she would have made of the rate when it was 4.8% a few years back!

my_definition

'like most graduates im on a low income' is she kidding? its a better rate than anywhere else would give and as a graduate she will earn more than people who dont have a degree. Im a student but i dont think people are just giving me free money, shouldnt she have been aware of that to? after all 2% is not that bad

epm-84

my_definition wrote: »

'like most graduates im on a low income' is she kidding?

She isn't wrong there - a lot of graduates are on low incomes in the range of £11500-£13000. It's 1st class degree graduates with experience who get the higher salaries of £17000+.

stevenhp1987

£17000+ for first class students?!? Maybe if you went to a lower end university...

Although 12k in loans is really cheap. If she had started in 2006... then she would have been paying 3k+ tuition fee per year rather than just 1.5k and would have been far worse off. She should be thankful that she had interest free cheap university for so long and @ 1.5%... it's still really really cheap!

whitfreak

I tried to post the following comment, but it seems that the spam filter going into overdrive.

"
Oh dear, how many things are wrong in this video.

Point one. Interest is charged from the day you get your loan. The longest it could have been interest free is one year. I.e. last year when inflation was actually negative and the government changed the rules.

Point two. You missed out a key word there which is real, when you are talking about the interest rate. If inflation is 2% and the interest rate is 3% then the real interest rate (in economics terms) is 1%.

Point three. You sound surprised that when inflation goes up your interest rate goes up as they are equal. Its not exactly a bomb dropped by the SLC.

Point four. 1.5% interest. "Rocketed"? Thats still a good couple of percent below inflation where it "should" be. Historically it is still low. Its the highest its been since March 2009, but you have to go back to the 2002/2003 replayment year for the interest rate to be below it, and that was the only other time interest rates have been below 2%.

Point five. One of two when you enter repayment things are suppose to happen, SLC is supposed to tell the taxman who tells your employer. Or you are supposed to tell your employer (either by ticking the correct box on the your P45/6, or just telling them assuming you are on PAYE). Not that they SLC is supposed to tell the tax man that you are earning.

Point six. If you make replayments direct to the SLC, it better be because you are outside the UK tax system. As if you are inside the UK tax system and you make direct payments, you still owe the what you would have paid via PAYE or your tax return. They are treated as extra payments, not replacement payments.

The only swindle is that students were told that degrees where the route to riches (or aleast a well paying job). And that very few students did the maths of interest should be around 2%, total loan £12000 (more now), how long will it take to pay off on a reasonable wage. About 13 years, if you started on £25k and only have inflation wage increases. Strangely if that calculation was in the the shiny student loans booklet alot less would have gone to uni.
"

epm-84

stevenhp1987 wrote: »

£17000+ for first class students?!? Maybe if you went to a lower end university... I got a 2.1 and started on 21k... which I feel is a bit low considering most of my friends are earning well above me

I should have made clear those are North of England salaries I gave and that I was allowing for the fact that not every graduate gets a graduate level job without further (lower paid) experience. In London I imagine 1st class could get you £25,000, depending of course on what subject you studied.

epm-84

whitfreak wrote: »

I tried to post the following comment, but it seems that the spam filter going into overdrive.

That's what it did to me as well. I emailed my comments through this web form: http://www.moneywise.co.uk/feedback/contact-us

Poolie

Does not sound like a terrible report more like some people who don't understand how the student support system actually works. Nothing like scare mongering.