Student Loans 2012

setmefree2

Here is a similar story picked up today by the Telegraph.

http://blogs.telegraph.co.uk/finance/ianmcowie/100009792/compound-interest-could-double-cost-of-student-loans/

Notice this quote. It refers to figures produced by The Telegraph not the BBC figures

Ann Gill of the SLC said: “The calculations are not correct because they have not uprated the repayment thresholds. The thresholds of £21,000 and £41,000 should be uprated each year in line with earnings. As a result both the repayments and the interest rate charged are wrong along with the total repaid.

I did calculations using the uprated figures - the effect is the same. The uprating makes only a marginal difference.

setmefree2

A number of good quotes in the Telegraph article

Compound interest may mean graduates who fail to repay Student Loans Company (SLC) debts promptly could end up paying twice as much as they orginally borrowed, accountants calculate.
Even on the easy terms offered by the SLC, interest which is allowed to accumulate on interest over long periods of time can produce startling effects. Graduates who begin their careers in low-paid jobs or who fail to obtain substantial pay rises and so take the maximum 30 years allowed to repay SLC debts are most likely to face the biggest bills.

Compound interest is a cruel taskmaster and politicians should not play down the massive debts young people are being encouraged to encumber themselves with before they have any means to repay them.

http://blogs.telegraph.co.uk/finance/ianmcowie/100009792/compound-interest-could-double-cost-of-student-loans/

PaulW1965

hermanmunster wrote: »

thanks setmefree2

ditto Thanks

PaulW1965

All the above examples are based on students borrowing £39k - many of them will however be borrowing £15k p a which is more like £45K.

The Telegraph's Accountants came up with this :-

For example, accountants who asked to remain anonymous “because we don’t want to appear political” say that student loans of £30,000 could require total repayments of £67,750 if interest accumulates at 2pc per annum over 30 years. If interest rates increased to 3.5pc, the debt would double in 20 years.
The detailed calculations include the assumption that earnings immediately after graduation are less than the £21,000 a year at SLC loans will have to be repaid when the maximum limit on tuition fees rises to £9,000 a year.

Student loans of £30k? More like 1 and half times that, so the effect is magnified!

wintersunshine

Link from The Mail

A lifetime of debt: Graduates face paying back a staggering £83,000 for taking out full student loans

Read more: http://www.dailymail.co.uk/news/article-1367161/Graduates-face-paying-staggering-83k-taking-student-loans.html#ixzz1GsUMaI2x

As said previously it's not the full loan amount, as the maximum some students will be allowed to take is actually £45K.

gadgetmind

The_One_Who wrote: »

You do realise that recruitment fairs and events are just a way for companies to get their name out there, don't you? They don't give students jobs there. And often it is only the big companies (who everyone knows about) that can get to these events.

We use recruitment fairs as a way to encourage grads to apply for jobs (and placements) with us because we're always desperate for *good* grads and this is a great way to get face-to-face with students and get this message across.

Any and all questions students want to ask can often be found on the company websites, or they can email the company directly.

We use recent grads (who've been with us 2-3 years) to man our recruitment fair stands as this way the prospective employees can ask the questions they *really* want to ask, such as "What's it like to work for the company?" and "What does 'plus benefits' mean?"

setmefree2

Article in this morning's Telegraph

£84,000 to pay for a degree

University graduates could end up paying twice as much for their degrees than expected under the new system of fees, the BBC claimed yesterday.

Teenagers borrowing £39,000 for a three-year course face repaying nearly £84,000 during their working lifetimes as interest accumulates on their debt. The research is likely to add to pressure on the Government to allow the early repayment of student debts. Ministers are considering penalising those paying their debts off early,

amid fears that wealthier people would be able to buy their way out of the new system.

http://www.telegraph.co.uk/education/educationnews/8389520/84000-to-pay-for-a-degree.html

The_One_Who

gadgetmind wrote: »

We use recruitment fairs as a way to encourage grads to apply for jobs (and placements) with us because we're always desperate for *good* grads and this is a great way to get face-to-face with students and get this message across.

We use recent grads (who've been with us 2-3 years) to man our recruitment fair stands as this way the prospective employees can ask the questions they *really* want to ask, such as "What's it like to work for the company?" and "What does 'plus benefits' mean?"

Yes, but going to a recruitment fair won't get you hired on the spot or give you any significant advantage over anyone else. It just makes it a bit easier to see the recruiters and ask questions.

setmefree2

From the Independent By John Rentoul

The Surrey Factor

Just in case George Osborne does it in his Budget next week, I’ll say it here so that I can say I said it. (If he doesn’t, no one will remember.) The news that Surrey University has decided that it, too, is “exceptional” and will therefore charge the maximum £9,000-a-year tuition fee, has made me wonder if the Chancellor might announce a lower maximum on Wednesday. The £9,000 fees has become a huge political problem for the Coalition and if most universities decide they will charge it, all the sums on which the forecasts are based will be thrown out. In the short term, it will mean paying out more money. So, if the Government thinks the vast majority of universities could operate on the basis of £6,000 fees, the simplest solution might be to bring the maximum down to, say £7,500, and expect every university to charge it. Possibly with watered-down social access conditions attached.
It would be another U-turn; many of the universities, who are already planning for next year’s intake, would be annoyed. But the politics of it look pretty irresistible.
Watch this space (or not, depending on what happens).

http://blogs.independent.co.uk/2011/03/18/the-surrey-factor/

gadgetmind

The_One_Who wrote: »

Yes, but going to a recruitment fair won't get you hired on the spot or give you any significant advantage over anyone else. It just makes it a bit easier to see the recruiters and ask questions.

As someone who hires a loads of grads, particularly those we engage with at careers fairs, I disagree. However, I don't know how other companies work.