'Don't believe everything you read in The Times about me and student loans' blog

camaj

Paul_Herring wrote: »

This is the MSM we're talking about. This shouldn't come to a shock to someone who actually works in MSM.

Some suggested reading if it does come as a shock to anyone:
The caveat in paragraph number 19:

Love those.

It really should be a surprise to any intelligent person who has ever read a "shocking" headline only to see the story offer no grounds to support it. I've lost count the number of times I've seen a "[Immigrants/work dodgers/latest scapegoat] ruin Britain" headline only to discover whatever was the matter was actually fairly reasonable/not actually an issue. Of course, a lot of people only see the headline and many of those who read the story start with the assumption that the headline was correct.

I was shocked to see the reanimated corpse of Simon Cowell on BGT, days after a front page headline declaring him dead. A triumph of medical science I anticipate will make most of Monday's headlines.

2sides2everystory

So is this trebling of Student Loan Debt to SEVENTY BILLION POUNDS by 2015 which has been highlighted by the Public Accounts Committee this morning going to be real??

Margaret Hodge spoke about her fears about default. What's a default in this scenario anyway? Is it perchance someone who can't pay or someone who won't pay? I thought there was no escape if the due payments were to be directly deducted like tax or CSA payments from salaries? Don't tell me there's ways around that? Why is Margaret Hodge worried?

Do we think perhaps, as there is now to be a mountain of SEVENTY BILLION POUNDS of debt, that that might be sufficient for there to be a whole new government debt collection agency spawned from it?

wozearly

2sides, intuitively the 'trebling' figure has some weight given that tuition fees for most English students will treble for the 2012 intake and so by 2015 this will be the situation for the majority of UK students.

Default could either be seen as a 'problem' or a deliberate design in the new approach.

Essentially, the new system is that 9% of income is taken once a student starts earning over £21k (except if taking time off work to raise children) and 30 years after graduation any outstanding loan is written off.

In a nutshell, this means most people will start paying the loan off later in their careers, will pay it for longer, but more (particularly lower earners) will never have to pay it all off and will pay less than in the current system. Higher earners will likely end up paying more than they do currently.

I doubt a new debt collection agency will be required, as student loan payments will be collected in the same way as they are now.

Assuming I've interpreted Margaret Hodge's concerns correctly, the issue is around more people having the loan written off, which means general taxpayers will begin picking up the tab as of 2034.

The Daily Mail (I know, I know...) reported some analysis by London Economics in March suggesting the numbers not paying the loan off in full would be around 80% of women (currently 20% - 30%) and 30%-40% of men (currently 10%). The average amount of loan written off for women was estimated to be around £26,500.

So the problem is essentially twofold - costs rise in the short-term as the government has to pay more in student loans to cover the new (higher) fees, and the government will get a smaller proportion of the student loans back than under the current system, meaning that the taxpayer will have to open up the purse strings a little wider from 2034.

Hence why Vince Cable and others have threatened universities with changes to direct state funding, as the rush by many to charge the top rate on the majority of courses has changed the funding calculations which originally assumed only a few would do this.

The irony to me, is that most people have focused on the headline fees being charged and the rise in debt they'll nominally be liable for. The belief seems to be that people will have to pay back the full amount, whereas unless the system changes substantially most people will actually have to pay back far less than that and, for lower earners, a lot less than under the current system.

I think this is partly what has annoyed Martin about people's widespread misunderstandings of the new system. Its pretty complicated, and the government has been distracted by the universities not playing ball and the NUS and other protests and so has done a poor job of explaining how it works and the benefits of it.

2sides2everystory

A decent university education in a decent first world country should be free for all.

The indecent rush to charge the full £9,000 shows that the universities collectively cannot be trusted to be free from greed.

The London Economics report quoted by the Daily Mail in March 2011 can be viewed here I think. Obviously the skewed result of every tin pot higher education provider jumping on the bandwagon is that the report is already obsolete.

The sex discrimination bias identified is however worrying. This is not Afghanistan so there is no justification for positive discrimination in favour of women. The Student Loans Scheme would therefore seem to be unlawful.

Martin might be annoyed, but he as yet has not properly explained why he has
(a) chosen not to campaign against the scheme
(b) chosen to lend his name in promoting it to young people