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

Person_one

emidee wrote: »

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!

I have two A levels in 'hard' subjects and two in 'soft' subjects, plus one that I'm not sure what category it would fall into!

I personally found the 'hard' ones easier to pass than the 'soft'. Everyone is different and its all about the individual's strengths, one is not categorically and universally always harder than the other.

Paul_Herring

Person_one wrote: »

Why is media studies always so denigrated?

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

Yes to all. And the quality of all leave a lot to be desired. Especially those that are as a result of employment and, no doubt, said Media Studies qualifications.

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

We also pour scorn on them when they end up in jobs.

Lazy reporting? Check.

They haven't quantified these figures in the story, it seems the BBC has just copied and pasted the press release, as per usual, but it shouldn't be too difficult to check.

Biased reporting? Check.

So that's -

8 critics of the government
2 milder critics of the government
1 supporter of the government (namely the government minister)

The fact that both of these are about the BBC is purely down to the fact that the BBC so frequently demonstrate what's wrong with the media. They are by no means alone however.

Person_one

Paul_Herring wrote: »

Yes to all. And the quality of all leave a lot to be desired. Especially those that are as a result of employment and, no doubt, said Media Studies qualifications.

We also pour scorn on them when they end up in jobs.

Lazy reporting? Check.


Biased reporting? Check.



The fact that both of these are about the BBC is purely down to the fact that the BBC so frequently demonstrate what's wrong with the media. They are by no means alone however.

What about all those graduates of medical schools who go on to get things wrong in their careers?

GP struck off over morphine deaths

MMR doctor struck off register

Doctor struck off over 'pointless' MS treatment


Google 'doctor struck off', there are 116,000 results, is this a demonstration of what's wrong with the medical profession?

Paul_Herring

Person_one wrote: »

What about all those graduates of medical schools who go on to get things wrong in their careers?

"Don't look at us - they're just as bad, or worse" is not a valid excuse.

Person_one

Paul_Herring wrote: »

"Don't look at us - they're just as bad, or worse" is not a valid excuse.

Funnily enough, I work in the NHS and have no more to do with media than being a consumer of it.

I'm not making excuses for any mistakes, merely pointing out that mistakes are made in every profession and field. You can't discount a whole field of study based on the fact that some of its graduates will go on to get things wrong. If you could, nobody would do anything!

blush2783_2

Hi all I've found all your posts really helpful but am still not clear on what the new system will mean for my daughters. My oldest is several years away from applying to do dentistry (if she still wants to do it by then!) but I've realised we need to start looking into all of this now. I was one of the 'lucky ones' who got to do a degree without paying fees but I did get a student loan for living expenses but paid it back quite easily as if I remember correctly it was not charged interest or it was very little. Looking at all of this now it makes me realise how fortunate we were.

The level of debt that my daughter may end up with at the end frightens me as we have always been careful with money and apart from our mortgage have not had debt. I'm not clear if every student has to have this debt if they have the means to pay for fees upfront? We certainly don't at the moment but in theory I could change jobs and work more hours which I would do if it meant she could be debt free.

I am really torn what the best system for university fees would be. I would have never been able to afford to go to university if my fees had been so much but I'm not happy that for example if my daughter becomes a dentist and earns a lot of money she will end up subsidizing some of the students who didn't work hard through university, didn't get a good enough grades and then don't have to pay back the fees because they cant find jobs. On the other hand I know someone who went back to university as a mature student who got fantastic grades because they worked really hard but with the job market as it is has really struggled to find any work whatsoever.

Its made me realise that there is no easy answer however I really don't want our kids graduating with such huge levels of debt.

Mr._H_2

blush2783 wrote: »

The level of debt that my daughter may end up with at the end frightens me as we have always been careful with money and apart from our mortgage have not had debt. I'm not clear if every student has to have this debt if they have the means to pay for fees upfront? We certainly don't at the moment but in theory I could change jobs and work more hours which I would do if it meant she could be debt free.

Please a.) Don't be frightened, b.) don't work more hours, depriving yourself of quality family time, in order to avoid this "debt".

It is vital to appreciate the difference between this "debt" and normal debt. By way of example, let's say your daughter's fees are £9000 for 4 years and she takes £3500 a year for living expenses. This would result in a "debt" of £50,000 upon graduation. If this was a normal debt with 7% APR interest and fixed monthly payments, costs would look something like this:

loan term;monthly payment;total repaid

30 years; £325.46; £117,166.43

20 years; £381.22; £91,493.37

10 years; £575.02; £69,001.98

The loan would show up on her credit file and could make it difficult for her to get other credit; there would also be the risk, given the size of the loan, that a loan company could seek to convert the debt from unsecured to secured if she falls behind with repayments early on. The monthly payment would have to be made every month on time regardless of your daughter's salary or employment status, with missed payments incurring penalties and eventually resulting in bailiffs, repossession if the loan is converted to a secured loan, or bankruptcy. The loan would also limit your daughter's options with how she chooses to live her life, always having to consider if she could make the monthly repayments; this could make activities such as maternity leave or undertaking lower paid humanitarian work in developing countries harder or impossible. So, if student loans were normal debt, I would agree with you that it would be very frightening.

In order to compare this to how the student loans will actually work requires some simplifying assumptions, as the threshold at which repayments start is going to rise in line with earnings, the interest rate is going to be linked to inflation and the monthly payments depend on income. For the purposes of comparison, let's assume a fixed 4% inflation rate, earnings increases in line with inflation, your daughter's salary rises in line with earnings, and she doesn't take any career breaks etc.

salary upon graduation; monthly payment at start; loan duration; total repaid

£20,000; £0; 30 years; £0

£25,000; £30; 30 years; £20,190.58

£35,000; £105; 30 years; £70,667.02

£50,000; £217.50; 28 years, 7 months; £135,349.35

£75,000; £405; 12 years, 6 months; £76,878.73

£100,000; £592.50; 8 years, 1 month; £65,939.67

Sure, the higher values of starting salary here are highly unlikely (more likely to start lower and then rise quickly than to just start high immediately), but they're useful as an initial basis of comparison with normal debt. In addition to the repayment numbers, it is vital to remember that the loan does not show on a credit search, and repayment only happens if you're earning above the earnings threshold; there is zero risk of non-payment penalties etc. This means your daughter has the flexibility to work (or not) however she likes without having to worry about the loan.

For anyone that's interested, I have created an excel spreadsheet that will do some loan calculations. Amount of debt upon graduation, salary and rate of inflation can be changed to see how this affects monthly repayments and total amount paid back over the course of the maximum 30 year term. Calculations are done on a month by month basis. You can download it here.

brook2jack

Just to advise you I come into contact with alot of foundation year one dentists (first post grad year).

Dentistry is a five year course and all schools are likely to charge max tuition fee as very expensive course to run (£9000 pa) however in years 4 and 5 at the moment many students will qualify for a NHS bursary to cover tuition fees.

However unlike other courses which run on a 30 week academic year dentistry is 45 week academic year after year one , and elective studies take place during the holidays.

In addition the standard day is 9 to 5 (half day weds) with a heavy workload in addition which means a part time job is impossible as is summer work.

At the moment most new graduates in dentistry come out with circa £30,000 to £40,000 debt. This will rise as increase in tuition fees rise.

Most graduate dentists take years to pay off debts and it does have an impact on being able to run a car, buy a house or even pursue post grad studies.

However if it is a job she desperately wants to do ( and the grades, UKCAT scores, and other hoops she will have to pass to get onto one of the most competitive courses there is means you have to be very driven) then this shouldn't deter her.

Mr._H_2

brook2jack wrote: »

Most graduate dentists take years to pay off debts and it does have an impact on being able to run a car, buy a house or even pursue post grad studies.

That's because with the old system, repayments start at £15,000 earnings. Under the new system, "debt" will be higher after graduation, but repayments will be lower meaning that those repayments will cause less of a problem. e.g. old system: £30,000 salary means £112.50 a month repayments; new system: £30,000 salary means £67.50 a month repayments.

However, you do make a good point about living costs. I think that the maximum loan available to cover this is too low, so whilst I don't think parents should be overburdening themselves trying to get into a position where they can pay their children's living costs and fees, they should aim to assist with (as opposed to pay entirely) living costs.

Iced_jem

After finishing uni I used my life savings to pay off my student loan. When I tried to pay it back my uni finance advisors didn't know the process for paying off your loan and the SLC seemed surprised that I wanted to. I just wanted to pay it back before it started coming out of my pay cheque because I didn't want to still be paying for it in 10/20/30 years time when it seemed a age ago. I would encourage students to overpay or pay back their loans as quickly as possible to avoid it being a burden for what would seem like the rest of their lives!