Student Loan 2015 Discussion

Former_MSE_Wendy

This is the discussion area for the

Students Loan 2016 guide

Please let us know what you think below.

uni_worker

Hi Martin, the Daybreak website has a major typo on it;

- The new system only affects those STARTING university or college in September 2011
- Existing students and those starting in September 2011 stick with the current system

The first bullet should read 2012 (I hope!)

You mention that the current fees are £3,290, but for 2011 they are going to be £3375, we don't want students coming in September thinking they will be getting charged the lower amount.

Thanks for doing the guide, it will really help us explain the situation to future applicants.

melancholly

would it be worth announcing the article on the student board too? that's where most of the discussions about this have been going on for a while already.

Lokolo

Another thing I am not 100% on, is that on DirectGov it states the interest rate is RPI + 3% until you start repaying not until you graduate, which is what you have stated in Section 6.

So those that are unemployed or earning under £21k after university will continue to be charged RPI + 3% rather than going to the RPI rate for earning less than £21k, even though the rates are RPI for those earning under £21k and states on the next line on that it is based upon when you can possibly earn rather than when you start repaying.

Although I believe you are right and the DirectGov website is incorrect, it is meant to be the official website...

DirectGov wrote:

Interest is charged on your loan while you’re studying. Until you start repaying the loan, interest is charged at the rate of inflation plus three per cent.
When you're due to start repaying your loan the amount of interest you're charged depends on how much you earn.

Seems like a very contradictory paragraph.

Former_MSE_Wendy

uni_worker wrote: »

Hi Martin, the Daybreak website has a major typo on it;

- The new system only affects those STARTING university or college in September 2011
- Existing students and those starting in September 2011 stick with the current system

The first bullet should read 2012 (I hope!)

You mention that the current fees are £3,290, but for 2011 they are going to be £3375, we don't want students coming in September thinking they will be getting charged the lower amount.

Thanks for doing the guide, it will really help us explain the situation to future applicants.

thanks uni-worker - we're getting it changed now!

Former_MSE_Wendy

Lokolo wrote: »

Another thing I am not 100% on, is that on DirectGov it states the interest rate is RPI + 3% until you start repaying not until you graduate, which is what you have stated in Section 6.

So those that are unemployed or earning under £21k after university will continue to be charged RPI + 3% rather than going to the RPI rate for earning less than £21k, even though the rates are RPI for those earning under £21k and states on the next line on that it is based upon when you can possibly earn rather than when you start repaying.

Although I believe you are right and the DirectGov website is incorrect, it is meant to be the official website...



Seems like a very contradictory paragraph.

Hi Lokolo, there's more info on this Student 2012 Direct.gov page, which we've verified, but thanks for mentioning, just in case!

melancholly

MSE_Wendy wrote: »

Hi Lokolo, there's more info on this Student 2012 Direct.gov page, which we've verified, but thanks for mentioning, just in case!

thanks so much for that link - there's been a whole lot of confusion over the info on the directgov website (not least because they changed the details on there which ended up being even more confusing!). glad MSE knows what's going on even if the official government website can't make it clear! lol

property1925

I work in a Univ admissions office and we are really in the dark about how the scheme will work in practice. E.g.

1. Can you repay early or are you locked in for 30 years?

2. May a student pay their own fees for (say) one year and then take out a loan for the remainder?

We have, however, noticed a sharp increase in people telling us that they are not coming, or that it "is not worth it" because of the fees

MSE_Martin

property1925 wrote: »

I work in a Univ admissions office and we are really in the dark about how the scheme will work in practice. E.g.

1. Can you repay early or are you locked in for 30 years?

2. May a student pay their own fees for (say) one year and then take out a loan for the remainder?

We have, however, noticed a sharp increase in people telling us that they are not coming, or that it "is not worth it" because of the fees

Both of these are in the guide - feel free to direct people to it for more info

1. It is very unlikely you will be locked in for thirty years - but there is a debate whether you will have penalties for repaying early. And I doubt it will be decided in the white paper - it looks like it will go out to consultation.

2. You do not need to take a loan for fees, you can pay instead (though as you'll see in the guide for most people the financial mathematics on that is likely to look bad even if you can afford it).

Taiko

It's a great guide so far, and can only improve in time.

One thing I will say, are there plans to include perhaps a guide to make sure everyone gets their full entitlement? I say this, as from experience SFE do give incorrect information.

I would be happy to write up such a guide from the point of view of an ex-assessor at Local Authority level if this would be of interest.

Andrew_McGettigan

Dear Martin

I think you need to revise your repayment model for FAQ 17.

1. The government's 'intention' (I use this term advisedly) is to index link the thresholds to general wage inflation not graduate pay. Wage inflation is currently around 2-2.5%. I think it is best to assume it as a similar level to RPI. Otherwise, what becomes apparent from your scheme is that the government could not afford this scheme - too few people would repay the loans.

2. The interest rates and thresholds will not be set in primary legislation but treated as administrative matters. Until we see the terms of the loan agreements which individuals sign, it is not clear what protection there is for individuals against future governments changing the terms or, indeed, selling off the loans to third parties. (Loans can be sold without consultation and without consent - see 2008 Sale of Student Loans Act).

3. The 2011 Education contains a section allowing the government or third parties to set commercial rates of interest (or higher in certain cases) on student loans.

Part of your campaign for financial education needs to involve reading contracts and understanding how and when terms and conditions might change.

Yours

Andrew