MSE News: Student tuition fees could treble by 2012

JAYk_2

crystaltipps wrote: »

I appreciate your point Older. I know all about student debt - I will hopefully graduate myself in 2012. When I do, I will be looking at earning a reasonable income on graduation. I will also be paying back approximately 27-28 grand eventually. I knew this when I decided to return to study after years of doing dead end jobs for low pay. I decided to get a degree because I want to demonstrate to my children that study and hard work equal success - as well as for my own financial benefit of course! I will also be 'escaping' the trap of low income and WTC/CTC top up.

It does mean though, that if I do get a good job, maybe between 20-25 grand (entry level pay in a lot of positions I will be applying for).

This means I will be over the income acceptable for the girls to have full benefit of the 'low income' families support. But, I will be unable to dedicate big portions of my income to supporting the girls in their endeavors.

Good that you're setting a good example for your girls.

crystaltipps wrote: »

Even if they did get the financial support needed - they will be graduating with debt that equals the price of a two bedroom terrace property, or apartment in our area.

Surely, I can't be the only person that thinks saddling young people with debt equivalent to a house in our area is acceptable. Especially when these changes are implemented by (as already mentioned) people that had the benefit of free education and the ability to ensure money is not an issue if their own children decide on a degree education.

I wanted to go and join the protest in London next week. Unfortunately, though, I have an exam at 10.30am on the day, so will be protesting (pointless though it may be) by writing to my MP instead.

Or maybe I should get into politics - it seems to be a good earner! :-)

You can always write or organise a protest during the weekend . Students had one yesterday afternoon SE1.
However why are most people relying on getting a job only and if all fails go on the dole or ''the government should provide''? Surely whilst looking for a job you could think about setting something up for yourself. Some jobless students are sacrificing nights out on the town to do this just to make ends meet and are making quite alot. Employers do like initiative takers.

Oldernotwiser

johnswife wrote: »

Oldernotwiser, doesn't the amount of the loans/grant depend on parents income?

Not when it comes to fees - everyone can borrow the full cost. Students from low income families can get a maintenance grant as well as a maintenance loan.

jrawle

Poolie wrote: »

I suspect you will be caught in your last year for the higher fees depending on your university

No she won't. When fees were introduced in 1998 it didn't apply to existing students (I know becasue I started in 1997!) When so-called top-up fees were introduced, existing students continued to pay the old amount. Similarly the new fees will not apply to students who enter before 2012.

AS the BIS website says:

The new system will come into effect for new entrants to the university system in 2012.

Note though that this also means existing students will have to pay back their loans under the current system of 9% of earnings above £15,000, not £21,000.

I really don't think scaremongering by telling people they will suddenly have to pay more is helpful.

jrawle

Oldernotwiser wrote: »

Not when it comes to fees - everyone can borrow the full cost. Students from low income families can get a maintenance grant as well as a maintenance loan.

And then only if you have a very broad definition of "low income". I know we don't know the details of the government's botched version yet, but in Browne's Report, he suggests a full grant up to parents' income of £27,500 and then on a sliding scale all the way up to £62,500: not a low income in my book.

jrawle

mum2many wrote: »

Does anyone know how it works if your already at uni when the hike comes in?

My daughter is applying to go from sept 11 so could possibly have 1 year at the 3K level then 2 at the 6K level.

It won't apply at all to students who start university before 2012. It didn't when fees came in in 1998; it didn't with top-up fees, and it won't now. It does mean repayment of loans will still be under the old system too, though, i.e. 9% of salary above £15,000, not £21,000. See my quote from the BIS website above.

The_One_Who

I think it's interesting that graduates wanting to pay back their loans early may face financial penalty for that.

Aside from that, we should have known that this was coming, and anyone with any knowledge of higher education should have known that universities were continually being squeezed to such an extent that a lot are in financial trouble. The government wants universities to do more with less, but everyone knows that by and large it results in the institution doing less with less.

Less wealthy students won't be priced out of education, as loans will still be available. Of course that means a debt, but then if they really want to go to university then they will take that debt. Everyone else will. How many people have a mortgage? If you want a house most people will need to take out a mortgage.

jrawle

Does anyone have experience of getting a mortgage when they have a student loan outstanding? As far as I can see (and this is after analysing the situation myself, I'm not an apologist for the government!) a student loan isn't the same as a mortgage or credit card debt because it carries no risk. The repayments are tied to salary, so even if interest rates go up to 99%, you don't have to pay any more (unlike people with variable mortgages, who would be screwed). Likewise, if you lose your job or take lower-paid work, the repayments stop or are reduced accordingly.

Therefore, the only way that an outstanding student loan should affect a mortgage application is to reduce your available monthly income by a small amount. For someone on £25,000, it's £30 per month. I think it's unjust for mortgage lenders even to be allowed to take this into account, unless they are also going to look at whether people smoke (which costs much more per month) and how much people's mobile phone contracts cost (many people pay £30 or more).

Many of the comments in the media after the announcements are how the fees will saddle young people with debt so they will never be able to afford a mortgage, and I simply think that's nonsense. The proposed system it closer to a graduate tax payable for 30 years. I don't like tuition fees and wish university could be free, but unless we are going to have it restricted to 10-15% of the population again (which isn't going to happen) free education is unsustainable.

gadgetmind

The_One_Who wrote: »

I think it's interesting that graduates wanting to pay back their loans early may face financial penalty for that.

Yes, that's the bit that seems really cruel. Saddling someone with a debt is bad as lots of people don't like debt, and lots of people will be willing to dig a bit deeper into their pay packets to ditch this debt before they start looking at buying a house. Hitting these people with extra charges isn't just wrong, it's immoral.

They're paying back the money they have been forced to borrow. Surely that should be good enough?

Ian

The_One_Who

They are not forced to borrow the money. They are not forced to go to university, and there are other options like doing it part-time after working a few years, or distance learning options. These can help make the costs more manageable.

As far as I am aware, student loans do not make any difference to a mortgage application, although I could be wrong on that.

jrawle

gadgetmind wrote: »

Yes, that's the bit that seems really cruel. Saddling someone with a debt is bad as lots of people don't like debt, and lots of people will be willing to dig a bit deeper into their pay packets to ditch this debt before they start looking at buying a house. Hitting these people with extra charges isn't just wrong, it's immoral.

They're paying back the money they have been forced to borrow. Surely that should be good enough?

I agree that there shouldn't be such a penalty. It seems strange that people will be allowed to pay their fees up-front, but not to take out a loan and pay it back early.

This wasn't recommended in the Browne report, it's the government fiddling. In fact, Browne suggested allowing early repayment would reduce the government's borrowing requirements to fund all this. Unfortunately, they've made the proposed system less fair and cogent by messing with it.

However, on the issue of repaying before taking out a mortgage, is this an issue? (See my post above)