Student Loans 2012

setmefree2

Lokolo wrote: »

1/4 of student's debts are outside the SL system!?

I struggle to believe that! With around £20k of student loan debt (£6k each year as a minimum) that means there would be around £6k of debt outside of this for each person. Now I don't know every student out there.... but I don't know anyone whose racked up that much of debt outside of SL!

The independent student guide Push asked 2,808 students at 115 UK universities how much they owed banks and their parents, and the amount they had borrowed in student loans.

On average about a quarter of students' debts are owed to sources other than the Student Loans Company, with 13% owed to parents and family and just under 7% borrowed from banks or on credit cards.

http://www.guardian.co.uk/money/2011/aug/12/student-debt-to-rocket-2012-freshers

setmefree2

For students in England, yearly average debt has risen by 11% over the last 12 months, the survey shows. It increased by 42% between 2004 and 2011.

http://www.guardian.co.uk/money/2011/aug/12/student-debt-to-rocket-2012-freshers

Lokolo

setmefree2 wrote: »

http://www.guardian.co.uk/money/2011/aug/12/student-debt-to-rocket-2012-freshers

Since when is 20% 1/4? Unless theres another source which is 5%?

But wow, can't believe it.

setmefree2

Push warned that the Government’s loans system would not cover the full cost of a three-year degree for many students.

A quarter of students’ debts are currently owed to sources other than the Government, including parents, bank overdrafts and credit cards.
And industry experts warn this will make it even harder for wannabe homeowners to get on the ladder.
Gemma Harle, managing director at Tenet Lime, said: “The higher university fees will make it harder for people to get on the property ladder or even move up the ladder.
“I think lenders are going to have to look at changes in their products and criteria to recognise that a high number of new professionals will have higher level of debt but this will be counterbalanced by their future earning potential."
And she added: “Financial advisers should also be getting involved earlier to help young people with their financial planning well before they are considering a property purchase.”
Melanie Bien, director at Private Finance, said: "Parents who are already overstretched by the higher cost of living will find higher university fees an unwelcome headache.
"Although fees won't have to be paid back until the child is earning a certain amount, if they also want to get on the housing ladder at some point they will definitely need parental assistance as they will have less money available.
"With lenders using affordability calculations, university fees that need to be paid back will be taken into account, reducing the amount the graduate can borrow. This is likely to mean that parents are increasingly called upon the bridge the gap."

http://www.mortgageintroducer.com/mortgages/241041/5/Industry_in_depth/University_fees_underestimated_by_parents.htm

The_One_Who

Lokolo wrote: »

1/4 of student's debts are outside the SL system!?

I struggle to believe that! With around £20k of student loan debt (£6k each year as a minimum) that means there would be around £6k of debt outside of this for each person. Now I don't know every student out there.... but I don't know anyone whose racked up that much of debt outside of SL!

Well it does say in the article about overdrafts and credit cards, most likely what is being referred to. A lot of students take out an overdraft and a lot use it all with little regard as to how they are going to pay it back. I know when I got my student account they were practically throwing the credit card at me, and someone could easily go wild with it if they were that kind of person.

I don't know about £6k worth of debt, but probably not that difficult to rack up half that.

Lokolo

The_One_Who wrote: »

Well it does say in the article about overdrafts and credit cards, most likely what is being referred to. A lot of students take out an overdraft and a lot use it all with little regard as to how they are going to pay it back. I know when I got my student account they were practically throwing the credit card at me, and someone could easily go wild with it if they were that kind of person.

I don't know about £6k worth of debt, but probably not that difficult to rack up half that.

I'm not disputing that it's not possible, I'm disputing the fact that they said thats the average amount for each student.

I don't know anyone who has that amount of debt, yeh some people have got overdrafts of around £500-£1k. But I don't know anyone who gets into £1450 extra debt each year (given that say the average debt is £5800 each year, 1/4 of that) on top of their student loans.

The_One_Who

It's Push, hardly the most reliable of sources.

biglugs

Lokolo wrote: »

1/4 of student's debts are outside the SL system!?

I struggle to believe that! With around £20k of student loan debt (£6k each year as a minimum) that means there would be around £6k of debt outside of this for each person. Now I don't know every student out there.... but I don't know anyone whose racked up that much of debt outside of SL!

Surely it is quite easy to ramp up this sort of debt? Accommodation fees are only just covered by the maintenance loan (£3650 if your mum and dad work in decent jobs), so you need all your living expenses to be paid. And unis like Oxford don't let (officially) their students have jobs in term-time. Your only access to money then is debt or parents.
This survey includes money owed to parents, so I can easily understand a student running up a debt of £2k per year while at Uni.

grizzly1911

I wouldn't worry about it the Government don't give a damn what happens 5 -10 years down the line.

They keep spouting on about the improved prospects of graduates but in reality the position is only going to get worse over that period.

I don't dispute that the top slice of graduates have the chance to do very well but the bottom slice is growing with no enhanced prospects yet they will still be saddled with the same burden. It has been argued by others that we now need degrees for all sorts of jobs. We don't, but that is the position we have been talked into. Far too many people are going to University when there isn't a "real need" for extra qualification.


The Government is building a problem for tomorrow on many fronts but two jump to mind, consumer demand from graduates (not demand for graduates) will be blunted because they can't afford to consume resulting in reduced tax take.

Secondly if as many parents will endeavour to do will leave themselves short in old age and the burden will be picked by the Government later in the cycle.

Many of these debts will never be repaid and I am positive further down the line Government will have to restructure either by cutting demand for degrees, reducing the timescale to achieve a degree and hence make it cheaper to get one, or debt recovery by other means - perhaps for those who can get onto the property ladder some form of charge over the equity in the property.

But still the politicians bang on that this will have no effect on the ability to get on the housing ladder for instance. It has too, less affordability, and less chance of accumulating a deposit.

biglugs

grizzly1911 wrote: »

I wouldn't worry about it the Government don't give a damn what happens 5 -10 years down the line.

They keep spouting on about the improved prospects of graduates but in reality the position is only going to get worse over that period.

I don't dispute that the top slice of graduates have the chance to do very well but the bottom slice is growing with no enhanced prospects yet they will still be saddled with the same burden. It has been argued by others that we now need degrees for all sorts of jobs. We don't, but that is the position we have been talked into. Far too many people are going to University when there isn't a "real need" for extra qualification.


The Government is building a problem for tomorrow on many fronts but two jump to mind, consumer demand from graduates (not demand for graduates) will be blunted because they can't afford to consume resulting in reduced tax take.

Secondly if as many parents will endeavour to do will leave themselves short in old age and the burden will be picked by the Government later in the cycle.

Many of these debts will never be repaid and I am positive further down the line Government will have to restructure either by cutting demand for degrees, reducing the timescale to achieve a degree and hence make it cheaper to get one, or debt recovery by other means - perhaps for those who can get onto the property ladder some form of charge over the equity in the property.

But still the politicians bang on that this will have no effect on the ability to get on the housing ladder for instance. It has too, less affordability, and less chance of accumulating a deposit.

What is incredible to me is how stupid our MPs actually are. They clearly don't understand (or perhaps they do, but just don't care) what the long term implications of this financing are.

Each year the student loans company will be giving out around £5bn of loans (based on 450,000 students with average fees of £7500 and maintenance loan of £3600). With interest rates of 8% a graduate will need to earn £55,000 a YEAR just to be paying enough money into their loan to clear the INTEREST (not the principal).

So national debt will be climbing every year, and with rates of 8% the debt will never clear until the government pays it off. All they are doing is pushing into the future a massive problem for our children. Within 33 years the student loan book will be at least £120bn, and every year the government will have to write off £20bn or more (depending on how much students actually manage to pay off their loans). It's complete and utter madness.