2012 students

MrsAverage

Where is there a good summary and useful info re the new fees and loans? Everything on here seems to be for current students only, and yet we who are facing our son going to Uni in Sept 2012 need to start planning financially now as he starts to look at Unis and courses.
For example is it worth only applying to Unis that offer lower fees (if any do?) or should we not be looking at Uni at all any more? are the new loans 'good debt' or 'bad debt'? We have so many questions and would love to know if there's a one stop shop for answers. Has Martin done any figures on the new scheme yet?

Lokolo

Not all the information is out yet, only bits and bobs. Some universities have released fees, some haven't, but they will all do soon enough.

The new loans are in between good and bad debt. They start off good debt, but when the person ends up earning over £41k they end up being bad debt because of the amount of interest put on them.

MrsAverage

thank you.
Surely the 'bad debt' aspect is a disincentive to wanting to earn money and build a good career?
Would it be better if we took out a loan so we could pay 'shop around' and keep control of what and when it's paid off?
I am afraid a future government (whatever flavour) might change the rules/rates once our kids are tied into the system and it could affect them for much longer than the 30 years

Mingle

Once you enter into the student finance system they cannot suddenly increase the fees. I'd also hasten to add that maintenance grants and bursaries will have to go up as well so it would be better for the lower income family.

It would be safe to assume that 90% of the universities will choose to remain within £1000 of the limit. Does that make sense- it's a bit of a confusing time, and I deal with student finance for a living!

Lokolo

MrsAverage wrote: »

thank you.
Surely the 'bad debt' aspect is a disincentive to wanting to earn money and build a good career?
Would it be better if we took out a loan so we could pay 'shop around' and keep control of what and when it's paid off?
I am afraid a future government (whatever flavour) might change the rules/rates once our kids are tied into the system and it could affect them for much longer than the 30 years

http://www.bbc.co.uk/news/education-12880840

You can see here the list of universities that have announced their fees.

Personally I would stick with the new loans, even though they do end up a bad deal over £41k. They are linked to RPI, so any spare money can be put into Index Linked Savings, which pay out RPI + X, all tax free, so profits can be made, up to a certain point.

Loans are also wiped out after 30 years if not paid back. (for some reason I kept thinking 25!)

PaulW1965

This might help you

Q&A: University funding

http://www.bbc.co.uk/news/education-11483638

also this is worth a read

Graduates 'could pay back double their student loans'

The BBC asked accountants to calculate how much three fictional students would end up repaying.



Some graduates could end up paying back double their original student loans under the new fees system in England, figures calculated for the BBC suggest.
The figures, by leading accountants, show that a student borrowing £39,000 for a three-year course could pay back up to £83,000 in total, in cash terms.

http://www.bbc.co.uk/news/education-12767850#story_continues_1

PaulW1965

MrsAverage wrote: »

Has Martin done any figures on the new scheme yet?

As far as I am aware Mr Lewis has been very quiet on the subject. But the details are not finalised.....

PaulW1965

Lokolo wrote: »

http://www.bbc.co.uk/news/education-12880840

You can see here the list of universities that have announced their fees.

Personally I would stick with the new loans, even though they do end up a bad deal over £41k. They are linked to RPI, so any spare money can be put into Index Linked Savings, which pay out RPI + X, all tax free, so profits can be made, up to a certain point.

Loans are also wiped out after 30 years if not paid back. (for some reason I kept thinking 25!)

Show me a savings account paying RPI plus 3.5% tax free please.:)

PaulW1965

MrsAverage wrote: »

thank you.
Surely the 'bad debt' aspect is a disincentive to wanting to earn money and build a good career?
Would it be better if we took out a loan so we could pay 'shop around' and keep control of what and when it's paid off?
I am afraid a future government (whatever flavour) might change the rules/rates once our kids are tied into the system and it could affect them for much longer than the 30 years

Just thought I'd mention that the government is going to introduce penalties if students attempt to overpay loans early.:(

atypical

Lokolo wrote: »

They start off good debt, but when the person ends up earning over £41k they end up being bad debt because of the amount of interest put on them.

I understand why, but where does the £41k figure come from out of interest?

PaulW1965 wrote: »

As far as I am aware Mr Lewis has been very quiet on the subject. But the details are not finalised.....

"My main concern isn’t that students will need to borrow more and take longer to repay – whether right or wrong that’s a political decision, it only changes the size not the nature of the borrowing. My bigger concern is that some students will be charged commercial interest rates and penalites or even face a ban on repaying early." - Martin's blog.

Lokolo

atypical wrote: »

I understand why, but where does the £41k figure come from out of interest?

if you earn over £41,000 – interest at the rate of inflation plus three per cent

http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/DG_194804

Quite near the bottom of the page.