MSE News - Tuition fees furore: what exactly are the plans?

Tinsley1

Lucky for me I escape this by a year but in all honesty I do not feel its as bad as some people make out. Yes the overall debt is more, but 30 years after you leave uni the debt is wiped out, no matter how much or little you have paid (that is what the Browne Report said I believe, to continue this). Anyone who pays off student loan in lump sums is I think a little foolish when literally you don't have to do it. I'm all for paying for education, but do think it very unfair that it jump from £3290 right up to 6-9K with little to no warning, think it should have been more tiered...

But its not the end of the world everyone can still go to uni the government will provide all of the funding, so the 'only the rich will be able to go' argument will be no worse than it is now. I do wonder who's bright idea this was though, so many economists have said they are going to get no money back from this for at least two decades plus and only something like 40% of people are ever expected to pay the majority of the debt off which is (I think) less than the current expectation.

Grad Tax is something else altogether though!!

mancmum

I'm interested in what the financial application form might look like in a few years time. We are likely to be retired/on the verge of retirement when number three son might consider going to university. I know from number one son that ISA savings are disregarded and that an allowance is made for pension payments. We had planned to drop some money from the offset mortgage into a pension fund just before retiring. However, at the moment the shorthand for calculating accesss to support with funding is often named as in receipt of school meals. There are much less generous treatments of savings in the school meals formula than the present student loans application. Is this a hidden cut? If it is there must be a lot of others like me who have saved for retirement through ISAs and whose children will miss out because of this thrift.

Oldernotwiser

mancmum wrote: »

I'm interested in what the financial application form might look like in a few years time. We are likely to be retired/on the verge of retirement when number three son might consider going to university. I know from number one son that ISA savings are disregarded and that an allowance is made for pension payments. We had planned to drop some money from the offset mortgage into a pension fund just before retiring. However, at the moment the shorthand for calculating accesss to support with funding is often named as in receipt of school meals. There are much less generous treatments of savings in the school meals formula than the present student loans application. Is this a hidden cut? If it is there must be a lot of others like me who have saved for retirement through ISAs and whose children will miss out because of this thrift.

Personally I'd far rather students from families with a low income received extra help rather than those whose parents have substantial savings, but perhaps that's just me.

The_One_Who

Oldernotwiser wrote: »

Personally I'd far rather students from families with a low income received extra help rather than those whose parents have substantial savings, but perhaps that's just me.

I would agree with that.

I completely and utterly disagree with the 'free school meals' marker though. My family are part of the working poor, who could well be better off (or at least no worse) if on benefits. I never received free school meals, yet my family are just as poor as any other in the area. Of course people in my situation would get the maximum grants and loans, but would be ineligible for the boosts proposed for those who got free school meals.

mancmum

The question actually is: what will the parental income calculations be for assistance with student fees? Will it follow the present guidelines or is there actually a radical revision that no one has picked up on.

Rest assured I think poorer people should get most help...putting money into a pension doesn;t necessarily coming from being really rich. Most of my money was saved when working as an NHS administrator.(Band 3 - much less than the average wage).

If this was a question that really rich people wanted the answer to then it would be way up there in the press coverage.

flimsier

The author of this article should not be allowed to write another one. I mean, seriously, a 12 year old can repeat something that was in most papers about a month ago.

andy465

Has anyone looked at the cost of the loan? RPI + 3% is enormous on a £27k loan, almost £2k a year at the start assuming the current RPI.

The repayments have to be large to start to pay it off (only when you are on £43.2k+), and might not even pay it off in the 30 year period.

This creates a series of payments that last almost your entire working life, which may cost you £64k in today's value.

And to top it off, someone earning £150k is likely to pay it off quickly even if their not allowed to pay more than their 9%, meaning that they pay less than half someone who is on £43k + inflation.

For most people this will be worse than graduate tax, except those that can pay off their loan quickly.

Taiko

The +3% only comes into it for the top earners, if you'd bothered to actually read the information instead of getting caught up in the hysteria.

Derivative

I'm a current student and I see my degree as an investment into my future. I don't see £60k as something to worry about when it's amortized over my working life.

With my childhood the options were basically, go to Uni, or make £10k/year in an unskilled job.

Those who see University as a 4-year doss, spend their spare money on alcohol and do subjects like Surf Studies won't even be punished as below the £21k threshold you won't have to repay your loan.

So I'm all for it to be honest.

Means tested support is grossly unfair in my opinion by the way, speaking as someone who recieves full maintenance grant. My parents income has nothing to do with me. I put away the spare money to pay off my loan, while classmates with better off families struggle to get by as they're not supported by Bank of Mum.

andy465

@Taiko I did bother to read it, I just expect most people go to university to allow them to get a salary of more than £41k in their lifetime, otherwise what's the point in going?

The point being RPI + anything is bad for the student, especially if they don't allow you to pay it off quicker.

In any case, anyone paying full fees earning < £43k will never pay off their loan, so will get 9% over £21k taken off for 30 years. Of my generation, anyone over £21k will have paid off their £3k fees in less than 5 years