Student Loans 2012

The_One_Who

setmefree2 wrote: »

I have to agree, it's mental. How can you charge an unemployed ex student more interest than someone earning £20k.

Maybe they are trying to force students to take "any old" job?

Well, yes, a lot of graduates these days are quite happy to be in 'any old job'! I am going galavanting this summer and I am incredibly lucky that my current employer is allowing me the time off.

kayr_2

This is very interesting. My first son starts in October 2011 and the next one in 2013. I thought I had read that the 2011 one (£3375 fees) would also be charged interest until he graduates at RPI plus 3% but now I think I must have been looking at the new proposals as detailed above. In any case he is being told to apply for a loan by May 31 but the interest rate he will be charged from receipt of the loan will be announced next September. I know these loans are "good" but I can't imagine applying for eg a mortgage without knowing the interest rate first!! The official booklet he has been given at school barely mentions interest. My original intention was for him to get the loans, invest the money to cover them at a (hopefully) higher interest rate than base rate + 1% then probably pay the loan off early, circumstances allowing. I know that is frowned upon here but that's what I choose and is the result of years of lifestyle choices! For the next child I intend to pay fees up front to avoid this interest rate of RPI + 3% unless the economic situation is different. However if the rate is high come September I may pay the fees up front for the older one too. I am told that it is possible to miss the deadline then apply late (and get the loan late) as long as you have the money to pay the first term's fees direct to the institution. You don't even have to apply for a zero loan to get home status as the institution itself is obliged to confirm status anyway. What bothers me is the prospect of my son's loan growing at a rate which is faster than the money I have can do. It seems to me that we are at the mercy of variable inflation/interest rates. Can someone confirm that this last year of the current system will still use the base rate plus 1%? I think I'm getting really confused by trying to think about and plan for 2 children under different systems.

Helix

With the current system the March RPI is applied from the next Sept - Sept or the base rate of a range of banks + 1% whichever is lower. March RPI has been announced as 5.3% so that's the most interest that can be charged between Sept 2011 - Sept 2012. That applies to those that start in 2011 too.

melancholly

Taiko wrote: »

Will have a word on this, as it's not agreeing with everything else I've heard. I'm hoping something has been lost in translation. That, or the government plan to recoup the repair bill for the riots damage.

you know, even if something has been lost in translation, to have that on the main directgov page stinks of gross incompetence!

melancholly

setmefree2 wrote: »

Presumably if you do a masters or Phd the loan attracts interest at RPI + 3% also?

well, stipends are untaxed and aren't over the threshold anyway..... what we'd end up with is essentially a graduate tax as most people will pay a proportion of earnings without ever clearing the total.....?

Oldernotwiser

melancholly wrote: »

well, stipends are untaxed and aren't over the threshold anyway..... what we'd end up with is essentially a graduate tax as most people will pay a proportion of earnings without ever clearing the total.....?

And many of us think that we should have gone down the graduate tax route anyway as it would've been simpler and more honest (if a vote loser!).

setmefree2

Richest students to pay for extra places at Britain's best universities

Proposals could allow UK students to enrol in university of their choice as long as they pay vastly higher fees up front

http://www.guardian.co.uk/education/2011/may/09/universities-extra-places-richest-students

Same story Telegraph

http://www.telegraph.co.uk/education/universityeducation/8504002/Parents-could-buy-places-for-children-at-university.html

setmefree2

Bits from the Mirror & Telegraphre yesterday's advertising campaign launch

'Misleading' tuition fees advertising campaign slammed

Meanwhile, Universities Minister David Willetts launched an ad campaign on fees and insisted that it is important students “are not put off because they do not understand the system”.
But the £1.5million project was slammed for claiming on website Directgov that fees will be £6,000 a year and that only “some universities” will charge £9,000 – despite two thirds doing so.
Shadow Business Secretary John Denham fumed: “It’s a scandal to spend taxpayers’ cash on a campaign designed to mislead students.”

http://www.mirror.co.uk/news/politics/2011/05/10/misleading-tuition-fees-advertising-campaign-slammed-115875-23119616/

Same story Telegraph

Teenagers are being misled by a government advertising campaign aimed at encouraging them to go to university, the National Union of Students claims.
The £1.5million campaign says universities will charge "up to £6,000" from this September, adding that "some" fees will reach £9,000. Nearly two thirds of universities that have declared their intentions have stated they will charge £9,000 for all courses, and nearly all the others are levying fees exceeding £8,000.

Same story Mail
http://www.dailymail.co.uk/news/article-1385384/Plan-let-wealthy-parents-buy-places-subscribed-universities.html?ito=feeds-newsxml








I'm wondering if this means that if students/parents attempt to pay the tuiton fees up front that they will have to pay overseas students rates? One fee if a student is part of the student government quota and one fee if you are not?

dizzie

Ah, dear Mr Willetts is launching his PR campaign to encourage students to keep applying to British Universities from 2012. Apparently he has heard that a lot of prospective students are being "put off" - funny that eh? They're clearly all confused....

...or are they? Perhaps they realise that the statistics of graduates earning "on average, £100k more than their non-graduate counterparts" are a little flawed in that this data has been gleaned from a time when far fewer people went to university. And most people know how the economy of supply and demand works - if there are more graduates looking for work in the marketplace! Secondly, for a three year degree course, once you factor in tuition and maintenance costs...what's that? £15k per year total? For a three year degree that will be £45k + interest (which during the years of study...or until you're earning, will be nice little profitable RPI + 3%...just to give that interest amount a nice head start!). Thirdly, if the student does not obtain a graduate job and is faced with the prospect of working in telesales forever or perhaps going back to train as a plumber....then once they are earning over £21k in that job (for which the degree course was a pretty pointless exercise)...they still have to pay back that lovely, jubly, sizeable...student loan. Perhaps our prospective students aren't so much confused souls as realists!

Did the discrimination that has sneaked in by the back door by way of a loophole in European legislation gall you? By that, I mean the that the French or Spanish for example, will be able to get a degree for free or at a "knock-off" price in Scotland or Wales...unlike the English UK taxpayer who pays their taxes towards the little state subsidy there is left? Did it gall you that Cameron's "exceptional circumstances" of £9k tuition fees has turned out to be...er...not so exceptional? Hmm, well if they weren't successful at annoying you the first time round, it seems that they're going to have another crack at it...

They are proposing that students may be able to buy places at the university of their choice on the same terms as international students (i.e. at even higher prices and without any state loan for tuition or maintenance). Well, I'm sure that will appease the "Jolly Hockey Sticks" Oxbridge crowd, who feared that they may become diluted with too much state school riff raff! And wealthy families will breath a sigh of relief that they are NOT going to be forced to compete with said rabble in order to secure a place in their chosen HE establishment.

But since the "squeezed middle" is becoming a much used term and the coalition is claiming that this new proposal will "free up places for the less well off"....perhaps the intention is to squeeze the middle just a bit more! For the families in the "middle" who are not poor enough to take advantage of the substantial subsidies, yet not rich enough to pay the tuition and maintenance fees of their offspring up front...maybe they won't have to worry about state supplied student loans anyway! Why would they, if universities can decline a place at £9k/yr with a state student loan, and offer one instead at £16k/year with no state financial support whatsoever? I mean, parents could just remortgage their home could they not or downsize into that two-up, two-down terraced house on the far side of town?

Funnily enough, I have some advice for Willetts and the coalition about their PR campaign. I'd suggest that an more appropriate application of PR should be made...one which the doctor ordered... namely that this shambolic policy be disposed of "Per Rectum"

...and rethought!

setmefree2

setmefree2 wrote: »

I'm wondering if this means that if students/parents attempt to pay the tuiton fees up front that they will have to pay overseas students rates? One fee if a student is part of the student government quota and one fee if you are not?

From The Independent

However, he wants the forthcoming White Paper on universities to consider a whole range of options and as such he is also willing to consider allowing the wealthy to pay enhanced fees of at least £12,000 per year and in some cases more than £28,000.

Paying up front fees of £12k Vs taking loans at £9k plus RPI +3% int for 30 years (effective immediately on taking the loan), now which is cheaper?

If the choice is between paying £3k extra by paying up front (taking into account interest over 3 years at current RPI rate plus 3%) and getting into your chosen Uni maybe it would be worth the extra £3k to pay up front?