'Should you be allowed to repay students loans more quickly?' poll discussion

FATBALLZ

Mr._H wrote: »

Getting a good degree is no guarantee of getting a well paid job, and it's only the very highest earners who would be likely to be able to afford to pay off their loans early.

Rubbish, I'm by no means one of the 'very highest earners', but I've paid back over £6k of my loan in 5 years and if I had a further £34k debt (which I'm very thankful I don't) as I would under these proposals I could cover it with money I've saved in that time. In fact my average wage over that period has been somewhere in the region of £26k.

Mr._H wrote: »

Nonsense. I work hard and have a well paid job (and am paying back a £16000 student loan), thank you very much. I guess you missed the part that 90% of people will not pay back everything they borrow under the new system? Are you suggesting that only 10% of people do a "worthwhile" degree?

No I'm suggesting that penalising people who repay early is a political stunt to satisfy irrational jealousy of certain groups. In the context of national finances the extra money it raises will be negligible - in fact it may even make them worse because some people will decide not to pay off their loans early as a result and end up not ever paying it all off.

crabyducky

patman99 wrote: »

I reckon Student Loans should be paid-back regardless of income. I know several people who have taken degrees, and have student loans that they will never pay back as they don't earn enough (and have no intention of doing-so).

Same here.

Mr._H_2

FATBALLZ wrote: »

Rubbish, I'm by no means one of the 'very highest earners', but I've paid back over £6k of my loan in 5 years

You are paying interest linked to the rate of inflation. New style loans will be (much) larger, have higher interest charges and the income threshold at which people start to pay back is higher. This does mean that only the highest earners would realistically be able to pay off their loans early (hence that statistic which you keep ignoring that only 10% of people will pay off their loans under the new system). Just to be clear, when I say "repay early", I'm talking about being able to pay off the whole lot within a couple of years. Proposals being considered at the moment include allowing penalty-free regular overpayments which would allow people to shave a few years off the duration of their loan, but higher repayments would be penalised or not allowed.

FATBALLZ wrote: »

No I'm suggesting that penalising people who repay early is a political stunt to satisfy irrational jealousy of certain groups.

You are still wrong about this. It's got nothing to do with "irrational jealousy" and everything to do with coming up with a system that will actually work. If penalty-free overpayments are allowed such that the very highest earners can pay off their loans extremely quickly, the system as it is structured now would simply not work. Interest rates on the loans and their maximum duration would have to be raised, leaving people on middle incomes (say £21,000 to £50,000) subsidising the system for both lower and higher earners. How is that fair?

pete375hnh

If the degree people take is a worthwhile degree then they should get a full grant as I did. Worthwhile degrees are those in medicine, engineering, chemistry, physics, mathematics etc. Those who undertake frivolous or hobby degree such as sports science, media studies and other pointless occupations should have to pay.
There was a clerk where I used to work had a degree in home economics, what good was that? She could have done the job with no qualification other than common sense. Thrre years at university wasted.

Paul_Herring

pete375hnh wrote: »

If the degree people take is a worthwhile degree then they should get a full grant as I did. Worthwhile degrees are those in medicine, engineering, chemistry, physics, mathematics etc. Those who undertake frivolous or hobby degree such as sports science, media studies and other pointless occupations should have to pay.
There was a clerk where I used to work had a degree in home economics, what good was that? She could have done the job with no qualification other than common sense. Thrre years at university wasted.

I see a can of worms here. Universities have already been accused of denigrating useless/worthless A-levels and have been asked to list them explicitly rather than let everyone else figure out the crap ones through whether they'll take students on based on whether they'll accept an A* in 'flower arranging through the use of dramatic dance' as an acceptable qualification.

Do we really need either (a) that list or (b) a similar list for the next rung up the ladder, given that universities are those that dictate (a) but it it businesses that dictate (b)?

emidee

Paul_Herring wrote: »

I see a can of worms here. Universities have already been accused of denigrating useless/worthless A-levels and have been asked to list them explicitly rather than let everyone else figure out the crap ones through whether they'll take students on based on whether they'll accept an A* in 'flower arranging through the use of dramatic dance' as an acceptable qualification.

Do we really need either (a) that list or (b) a similar list for the next rung up the ladder, given that universities are those that dictate (a) but it it businesses that dictate (b)?

Actually this was in the news a couple of weeks ago - Oxford, Cambridge & Russell Group universities have already issued guidance on which A levels are preferred:

http://www.guardian.co.uk/education/2011/feb/04/university-places-traditional-subjects-a-levels

Unsurprisingly they prefer 'traditional' A levels, particularly Sciences & Maths.

I don't really see the problem with this - these subjects ARE harder to pass that most of the newer ones!

DJ_Mike

FATBALLZ wrote: »

No I'm suggesting that penalising people who repay early is a political stunt to satisfy irrational jealousy of certain groups. In the context of national finances the extra money it raises will be negligible - in fact it may even make them worse because some people will decide not to pay off their loans early as a result and end up not ever paying it all off.

Not necessarily. I'd suggest that the reason these measures exist is because the government knows it is hedging a lot of public money on a system that could collapse under the weight of all the unrepaid debts.

Think about what this loans system really represents - you are hedging money on students who may or may not earn enough to pay you back what you put down on them. Sounds an awful lot like stock options... or the futures market! Maybe, maybe not.

But the point I'm making is that the price for education is not something you'll necessarily earn back (i.e. graduates who go on to contribute back to society but in ways that don't earn them a lot of money). So in order for the system to remain in balance you have to have some element of capitalism in there. Thus, the graduates who earn lots of money through lucrative, commercial jobs contribute more money back than those who contribute back to society in other ways not necessarily financially-rewarded.

If you don't progressively tax the high earners more to pay for the education of others, the system will collapse because the highest earners will simply pay back what they borrowed, while the low earners will pay less than they borrowed. It's simple mathematics - it does not add up. And we will end up in even more debt than we were before!

However, where the whole argument falls flat on its face for me is that I truly believe we send far more students to university than we really should. University is fast becoming a commercial proposition which it should not be. It is there for the pure enrichment of education for the brightest people who will genuinely go on to make good use of that knowledge commercially or otherwise, in a way that makes sense.

Make university a real choice again, with proper guidance on whether you really need the level of education for what you want to do. Right now it seems to be the middle-class-driven expectation, and dare I say it I think a lot of parents need a reality check on how bright their kids really are.

alexlyne

Theres no onee-size fits all solution to this. What will discourage people wasting their time doing pointless degrees, if they know (or should know) they'll never have to pay for it? What will encourage people to do worthwhile degrees if they know they'll have to pay for it for years to come? I agree that everyone should have to start repaying their loan regardless of income, though it could be tiered like income tax.
Ideally, there should be some kind of fluid system whereby a course is rated in order to determine what fees should be charged and what the repayment vehicle is set at.. any UK subject area shortages can be slowly changed by reducing fees and offering more attractive repayment schedules, though based on the graduates' final grades - the better you do, the less you pay!
It still doesn't account for those who do well at university but then choose not to try to follow it up with a related job, but there are always going to be situations like that.

rickbonar

Never really understood why these students can't pay the loans back. No one's forcing them to get a degree or a well paid job. If you get a degree and start earning £100,000 a year then what's the problem?

I put the first option pay back as quickly as you want. It shouldn't be a money making scheme for government but more importantly it shouldn't be a money losing scheme either.

If they don't like it they can always join us old timers working for £15000 to £20000 a year in normal industry jobs.

Person_one

pete375hnh wrote: »

If the degree people take is a worthwhile degree then they should get a full grant as I did. Worthwhile degrees are those in medicine, engineering, chemistry, physics, mathematics etc. Those who undertake frivolous or hobby degree such as sports science, media studies and other pointless occupations should have to pay.
There was a clerk where I used to work had a degree in home economics, what good was that? She could have done the job with no qualification other than common sense. Thrre years at university wasted.

Why is media studies always so denigrated?

Do you read newspapers? Watch films or TV? You certainly use the internet.

Nearly everybody consumes media, and nearly everybody expects (demands!) high standards from media professionals, yet we pour scorn on them while they study.

Is a degree in English Literature worthless? The two aren't much different.

No I;m not a media graduate, but I loathe the idea that only science, engineering or profession-specific degrees are of any use. The world needs (yes, needs) artists, writers, historians, musicians and actors too. A population is best served by having well educated, not just well trained, people within it.