Student Loans 2012

setmefree2

I think we've discussed this before but is there anything to stop the government from deciding these loans can be extended beyond 30 years?

It's like making you wait until your 67 to get your pension when what you were promised was 60?

kayr_2

setmefree2 wrote: »

I think we've discussed this before but is there anything to stop the government from deciding these loans can be extended beyond 30 years?

It's like making you wait until your 67 to get your pension when what you were promised was 60?

I think they can alter the conditions (there's a bit on the present declaration my son has signed about terms "as amended from time to time") but people assume they won't do anything too radical as it would be politically undesirable. However your point about the pensions is interesting. Slightly different as we didn't sign a form with the T&C when we started working. However who knows what the economy will be like in 30 years? Perhaps another reason for considering the possibility of opting out of the system?

setmefree2

kayr wrote: »

Perhaps another reason for considering the possibility of opting out of the system?

Indeed. At least they haven't taken that option away from us Perhaps we should be grateful for small mercies....

What Martin says :-

There may be early repayment penalties. The one spanner in the works is if the government adds penalties for clearing debts, or overpaying – so the 'put money aside and wait and see' strategy would be affected by this.

This decision hasn't yet been made, and is likely to go out for consultation (see my seven deadly sins of early repayment blog).

If these penalties were to be added, it would shift the bias somewhat more to erring on the side of not taking the full loan – though even with the penalties, if you're unlikely to ever repay it you're still better off taking the full loan.

Luckily however we're still a long way off decision time over this, and the early repayment issue should be settled a long time before then.

http://www.moneysavingexpert.com/family/student-loans-tuition-fees-changes

setmefree2

kayr wrote: »

Perhaps another reason for considering the possibility of opting out of the system?

Actually I'm not sure you can!!!!:eek:

I just noticed this on the LSE web site (my son is not thinking about going to LSE by the by - it just came up on a google search)

Look at this page

http://www2.lse.ac.uk/study/undergraduate/undergraduateFeeStatusAndFees.aspx

under the section on 2011 it says

Fees for 2011 entry

Home UK/EU fees

For 2011 entry, the tuition fee for new UK and European Union (EU) undergraduates will be £3,375 for the first year. The following years are subject to an inflationary rise.
Students from the UK and the EU have two options for paying this fee:

• Students can take out a student loan for fees which will be administered by the Student Loans Company, which they will repay once they have left university and are earning over £15,000 per year. In the case of students from England and Wales the Student Loans Company will pay the fee directly to LSE. This means that students who take out a fee loan do not have to pay the tuition fee up-front or whilst they are studying.
• Students can, if they prefer, pay the tuition fee up-front or throughout the course

Then

Fees for 2012 entry

Home UK/EU fees

In late 2010 the UK Government announced significant changes to tuition fees and funding arrangements for full-time UK/EU undergraduates. These changes will come into effect for the start of the 2012 academic year. Details can be found at www.bis.gov.uk/studentfinance. LSE has announced its intention to charge UK and EU undergraduates a tuition fee of £8,500 a year, subject to confirmation by OFFA. Please see New package of fees and financial support for further information. Further information will be available on this website in July.

Under the 2012 arrangements, UK/EU students will not be required to pay any tuition fees up front. Instead, the cost of tuition will be covered by a non-means tested government loan which students will only start to repay once they have left their programme and are earning over £21,000 per year.

No option to pay up front?

Which is not what Martin has in his guide:-

Of course you don't have to take the loan for tuition fees, you could opt to pay it directly.

I'm confused????

setmefree2

I think I've found my answer:-

From the Daily Mail

The Government pays students’ fees up front, with graduates repaying in instalments once they earn more than £21,000 a year. And the Treasury cannot afford higher than average fees.

So students are being "forced" to take a loan and be charged interest for 3 years at RPI plus 3%. Outrageous surely!

Lokolo

setmefree2 wrote: »

Actually I'm not sure you can!!!!:eek:

I just noticed this on the LSE web site (my son is not thinking about going to LSE by the by - it just came up on a google search)

Look at this page

http://www2.lse.ac.uk/study/undergraduate/undergraduateFeeStatusAndFees.aspx

under the section on 2011 it says

Then

No option to pay up front?

Which is not what Martin has in his guide:-
I'm confused????

It does say "not required" which to me says they have the option for a student loan rather than "you cannot pay up front".

And I wouldn't trust the Daily Mail with anything ha.

setmefree2

There is obviously some confusion about this. I found this thread in The Student Room:-

Not being able to pay tuition fees in 2012 onwards upront...


I've recently visited a few universities and at the student finance talks, they mentioned the government brining in a fine if universities fees were payed upfront or student loans payed off too quickly. This sound blooming outrageous to me, because during the repayment period of thing, we as graduates will be paying off more than we owe!!! I was wondering what the views of other students are and if theres anyone else out there who thinks its rediculous - both the idea of a fine and the fact they havent sorted out the white paper when UCAS have opened up the applications for those wanting to study in 2012!!!!!

http://www.thestudentroom.co.uk/showthread.php?t=1685346

melancholly

now come on, you know better than to take anything from the Daily Mail as a fact, particularly in this debate!!

the fees haven't been confirmed by OFFA yet, don't forget that. there has been no indication that students will be forced to take out the loans - there is a chance that they will do something as a disincentive to paying upfront, but that hasn't been said explicitly. the focus has been on the support and loans since the majority of people will need them as they can't afford not to take them.

i googled "2012 pay fees upfront" and here is one uni which says "It will still be possible to pay university fees up front in order to avoid accruing any debt"
http://www.manchester.ac.uk/undergraduate/fees/changes/

most of the newspapers have reported very badly on this which doesn't help anyone. most of them aren't really worried about what happens to families who have a spare £15K a year to pay for uni students so the focus is on who can get the loans. that's not the same as saying that paying upfront won't be allowed.

setmefree2

melancholly wrote: »

now come on, you know better than to take anything from the Daily Mail as a fact, particularly in this debate!!

the fees haven't been confirmed by OFFA yet, don't forget that. there has been no indication that students will be forced to take out the loans - there is a chance that they will do something as a disincentive to paying upfront, but that hasn't been said explicitly. the focus has been on the support and loans since the majority of people will need them as they can't afford not to take them.

i googled "2012 pay fees upfront" and here is one uni which says "It will still be possible to pay university fees up front in order to avoid accruing any debt"
http://www.manchester.ac.uk/undergraduate/fees/changes/

most of the newspapers have reported very badly on this which doesn't help anyone. most of them aren't really worried about what happens to families who have a spare £15K a year to pay for uni students so the focus is on who can get the loans. that's not the same as saying that paying upfront won't be allowed.

I can't believe it - we have the white paper and I still feel like I don't understand what the options are

But yes the Uni of Manhester definitely says

It will still be possible to pay university fees up front in order to avoid accruing any debt

Thanks for that.

By the way, I'm sure I read that abut 20% of students pay up front currently.

kayr_2

OK, this was from David Gregson at DBIS on April 18 this year: I can confirm that students are not obliged to take out a loan to pay for their tuition, and are free to finance their studies by alternative means, whether drawing on family resources or other means.
And this is from my (Tory) MP on April 27: I met today with the minister, David Willets, to discuss your email and in particular your concern about possible penalties for parents who want to help their children with tuition fees. He has assured me that parents who pay fees upfront without taking a loan will not pay any penalties at all. The issue of early repayment penalties for student loans will be part of a of a consultation once the white paper comes out in the summer. Like you, I oppose early repayment penalties and hope that you will contribute to the consultation in due course.

Of course it has been known for politicians to say one thing and do another.
I can't see it being legal to force people to take a loan. They might as well have a proper graduate tax if they intend to make debt with high interest rates compulsory. Where would this approach stop? Fines for people who choose private education? Confiscation of inherited wealth? (The Cabinet would love that one.) It's a Conservative led coalition - surely they can't afford to alienate their own too much.