'Stopping graduates repaying student loans early...' blog di

naked

Kayfer wrote: »

I've done a few quick sums and unless I've missed something obvious, it looks as if most students will never pay off their loans.

That was the problem I faced when I graduated in 2007 - the interest on the loan was more than I was paying off every year - graduate starting salaries are much less than those that media reports.

When I realised, I saved up and paid an extra £500 off on my loan which brought the interest down to about the same level as the repayments.

Luckily inflation dropped and my repayments started paying off the capital properly and are now more than the interest.

GreatScot7

I have a daughter who has just commenced her A levels so I will be paying for her to go through Uni. I had anticipated offering her the same deal as my son who is currently half way through his course - I pay his living expenses, he takes a loan for the tuition fees.

The news of close to tripling the tuition fees for my daughters intake year is bad enough, however the higher interest rate combined with the potential for an early repayment penalty has made me seriously angry. The reason, as Martin explained, any parent who can do it would avoid their child being saddled with a ballooning debt. Equally my daughter is agast at the thought of incurring such a huge debt to the point she is seriously doubting whether University is a viable option for her in the future.

Naturally as a concerned parent I want her to go to Uni, so if I have to find the money I will. But at what cost - furious, I will be joining the next march on Millbank!!

Liz3yy

I attended Uni between 1997 and 2000. I had a small student loan each year which now with interest added amounts to just under £4k.

Under the old rules I don't have to repay a penny until I earn £2,100 roughly a month, I simply defer it each year. The rules state this will continue until I turn 50 or the loan has been held for 25 years, whichever occurs first.

I wonder if the rules will ever change so that I am forced to start paying it back, whatever I earn? at the moment with a house to run, car to fill with fuel and family to feed I simply couldn't afford to pay anything

thriftykitty

I'm currently in my 2nd year of a 5 year course at University in Scotland (I'm actually English so still have to pay fees). I've not had time to read the whole way through this thread but will the new system be imposed on me, too in the next few years? Or will I just keep reapplying for the same type of loan in the system I'm in at the moment? Anybody have any ideas?

anon_ymous

thriftykitty wrote: »

I'm currently in my 2nd year of a 5 year course at University in Scotland (I'm actually English so still have to pay fees). I've not had time to read the whole way through this thread but will the new system be imposed on me, too in the next few years? Or will I just keep reapplying for the same type of loan in the system I'm in at the moment? Anybody have any ideas?

It should be all announced tomorrow I think. At the moment, I dont think they know whats going on with regards to current/2011 students(like myself)

When the fees rose from 1K to 3K, people who were already in university only paid 1K/annum but new students paid the new 3K rate, so here's hoping that this is the case for the likes of you and me!

fatal1955

Not letting people pay off debts even if they have the wherewithal and the desire is simply oppression - it keeps people trapped in the state's grip unnecessarily. The reasons given by David Willetts are a specious piece of sophistry.

setmefree2

michaels wrote: »

You have to laugh. Vince Cable said no fee increases, impose a graduate tax. The Tories ruled this out and have come up with something that is in effect a graduate tax...


...except those who can afford to pay up front (the very richest) can avoid the tax and just pay the fees.

I don't think we are going to be allowed to pay up front. I think our kids are going to be forced to take these dreadful tuition loans. I don't see how the government can force them to take maintenance loans however.

setmefree2

MAIA wrote: »

The whole business stinks, firstly they push people into higher education who will probably get more benefit from joining the workforce, learning a trade or similar. The whole of our society is conned into believing that a person is only worth employing if they have higher education of some sort.
Then they make the higher education progressively more and more expensive.
Then they start looking at how to make people carry on paying indefinitely!
To try and help young people to steer their way through this minefield created by successive governments made up of privileged people.....getting harder by the minute!

Oh my - isn't that just what happened with the housing market.
Firstly, they con everyone into believing they must take a mortgage. Then they make houses progressively more and more expensive (by increasing the mortgage multiples) and before you know it you have created DEBT PEONS.

Under this system the poor student is turned into a debt peon for life!

setmefree2

Oldernotwiser wrote: »

As long as loans are available for the fees, I can't see how you can say that it depends on parental income. Most parents don't pay the fees now and I can't see why they would in the future.

Parents will do it now as we can borrow money cheaper. We can borrow money at less than 1%, our son can't..... and by the way neither can "poor" parents.

setmefree2

SideArm wrote: »

I was at uni from 99 - 02, so it was the first type of loans. I was entitled and took the full loan available ~£3k a year. If the plan as put forward by the Labour Governent at the time went ahead I should have repayed this loan last year, but of course it has not.

The inflation rate was applied to my balance for each year i.e. whilst studying and only earning enough during holidays for living expenses.

So my balance at the end of the degree was ~£10,500 and I can now look forward to repaying it over the next 10 years due to having my degree and higher paid job. But alas, even with in a subject like computer science I couldn't find work and had to take any job I could, a couple of supermarkets and finally council work.

Its now 3 years later and the balance is ~£12,500 due to interest and still not paying past the £15k limit. I finally get a £17k job with MoD and start paying off £50 a month.

5 Years after that and I am paying £85 a month with a balance of ~£9k and if I stay with the MoD two years of pay freeze but, still intrerest charges of inflation.

So you can cleary see during the degree itself, earning less than the limit and due to public cuts I have been charged interest that do not equate to a zero-rate loan. My situation happend 2 years after the loans where introduced with a tution fee cap of £1025 so god help the 2012 intake of students.

Thank you so much for this post. This helps me understand that these loans are poison.