Student Loan 2015 Discussion

setmefree2

brummierebel wrote: »

This is an outrage. If there is going to be a penalty for early repayment, there should be a penalty for paying upfront.

Should paying student fees upfront be banned?

Reasons for a ban: Allowing students to pay fees upfront is a rich kids charter. Those from wealthy families will be able to sidestep the burden of repayments placed on those from poor or middle income households. It will give the lucky a leg-up while giving the middle classes a sack of debt to carry. It will give a free pass to those without credit constraints while placing a tax on those who do. For all these reasons, it does not pass the political fairness test. Those who pay upfront will pay less in total than those who are forced to repay over 30 years. A duke will pay less than his university contemporary who turns to teaching in a primary school.
Reasons to allow upfront payments: A good higher education system must be open to all, regardless of means, and must provide a safety net to those who find their degree isn’t a ticket to a well-paid job. A ban on upfront payments does not help reach either of those goals. Indeed, as Lord Browne points out, it will make higher education financing even harder in the short term, as the government will have to fund more loans. The most important principle should be that students pay for their value of the course they attend — whether with the help of their parents or through repaying income-contingent loans. As long as the poor are protected — both as applicants and graduates — then differences in the rate of repayment for those earning more than £21K are irrelevant. These are people who will mostly be earning more than average income, so who cares if a banker pays slightly less than a teacher benefiting from a 30-year semi-subsidised loan? Student finance should not be an excuse for income redistribution — we have the income tax system to do that.

http://blogs.ft.com/westminster/2010/10/should-paying-student-fees-upfront-be-banned/

Lokolo

mrs_deadline wrote: »

Absolutely - the crucial difference being that I would have the choice to pay down the amount in 8-10 years rather than 30, paying a lot less interest and buying my offspring 20 years of financial freedom in their mid-thirties and forties when they are really going to need it.

Isn't that why so many of us choose to overpay our own mortgages?

But you also have the huge disadvantage that you HAVE to pay it back.

Now what happens if you lose your job? You still gotta pay.
What happens if you get an illness and cannot work? You still gotta pay.
What happens if you die? You still gotta pay.

There's no full information about early repayments yet so anything around this is pure speculation at the moment.

Lokolo

tubster wrote: »

Martin

The average fee is far higher than 7,500 so PLEASE can we have a 9K table to go with it?

I can't be bothered to read the rest of your post if you cannot be bothered to re-load the page where £9k is displayed and has done since yesterday or the day before.

tubster

Martin


According to the Times Higher Educational Supplement the rough and ready average of declared headline tuition fees is £8,664.24

full list here: http://www.timeshighereducation.co.uk/story.asp?storycode=415618

There will be some bursaries but the vast majority of students come from middle class income households and pay the headline rates.

To me the table shows that a/ this will cost the government a fortune, and the only way they will be able to put a cap on spending is by rationing places, just like they do now

and b/ this is going to cost a lot of students a fortune, particularly if there is wage inflation and future governments tinker with it, eg lower the threshold, or extend the 30 years just like they did for the old student loans (and who thinks that over 30 years they won't?) so the low repayments mean the old demon of compound interest is at its worst. You start off with something that looks generous, then once everyone has accepted the principle you tighten the whole thing up; it is elementary politics.

And as the core teaching grant has GONE for most courses the universities don't even benefit that much, and cannot easily plan ahead as they don't know what the demand is going to be with these fee levels.

Even in the USA fee levels are FAR lower in most state universities (which the vast majority of students go to) and having been there I noticed that students take 4 or 5 years to complete, as they are juggling so many jobs to pay their way to avoid the compound interest. Is it just me, or didn't borrowing money beyond our means get us into this recession?

Martin, why are you trying to persuade us all to call it something else (tax or whatever)? This is NOT a 0 per cent credit card debt to have fun with, the scale and time scale of this means there are some HUGE unknowns. You are a journalist, you know the difference between reporting the facts and spinning - ie calling black white to make something more palatable? You understand that low repayments = more debt? Your summary at the top of the article has some summary headlines saying nice things like it will cost £540 less a year to pay back than now, but where is the headline line giving a less palatable fact eg "earn >25K and it will cost you 43 to 124K?" And then you tell parents not to worry about it and let their kids pick up this crazy bill. Come on Martin, buck up and stay balanced. I am at a loss to understand the 'hey, it's OK' position you seem to be taking on this.

When you borrow 44K that is a very serious amount of money. At 18 you will have NO idea how much you are going to earn over the next 30 years. Governments change, salaries and inflation can rocket. There is a pretty good chance you will have to pay most of it back, plus the interest, which may well be the same again.

Now I LOVE education, so much that I teach in adult education. It is the one thing that can transform our society - I just despair that so many seem to be shrugging their shoulders and condemning their children to a heap of debt which neither they - or the government - can afford.

Tubster

Lokolo

Hehe much better

calgary1

I asked the question earlier as to whether a student studying here and racking up a debt could then go abroad to work.

Someone replied, sorry I'm a newbie finding my way around, and said that they would.

But if these deductions are made through the British tax system, how could deductions be made from someone working in Spain, for example? Work abroad for a foreign company for 30 years, then the debt would be wiped?

Shobo

Oldernotwiser wrote: »

The current threshold for getting a fee grant and course grant for part time study is £22,000 based on household income so, if you're single, you wouldn't be paying any fees anyway, or for the rest of your Foundation degree.

I would expect your "top up" study to come under the new rules but you'll then be able to take out a loan from the Student Loan Company so you won't have to pay anything up front to finish your qualification.


Hi

I thought this might be worth sharing. A letter dated 28 February 2011 David Willetts sent to Louis Hartnoll (the President of a Students' Union) has been widely circulated amongst universities and colleges. It Reads:

''STUDENTS TAKING END ON COURSES
Thank you for your letter of 21 February (and the standard letters from your students handed in to my officials on 22 February) requesting further information about the student finance arrangements for students topping up their qualifications to an Honours Degree.

As I noted in my previous letter of 9 February, students completing a full-time Foundation Degree in 2011/12 who continue their studies 'end-on' to Honours Degree level on a full-time basis in 2012/13, will retain their existing student support and tuition charge arrangements on their 'top-up' course.

The same principle will apply to students full-time Foundation Degrees (and certain other lower level courses such as HNDs) in 2011/12 who wish to continue their studies 'end-on' to Honours Degree level on a full-time basis in a future academic year. They will retain their existing tuition and support arrangements.

The definition of an 'end-on' course for 2012/13 will include students topping up to Honours where the mode of study (i.e. full or part-time) remains the same on their higher level course. Those students who change the mode of study on their higher level course and those where there is a gap between their Foundation Degree and 'top-up' course will be subject to the new tuition charge and support arrangements on their second course in 2012/13 and subsequent academic years.

I trust that this reply will enable you to clarify the position for your Foundation Degree Students''.

So as long as there isn't a break in studies between the foundation degree and honours degree and you keep studying in the same mode of study (ie you're studying part time on both courses) you should stay on the current fee system. Good luck!

Shobo

wdyw wrote: »

Your article mentions how Foundation Years and Access courses will be affected, but not how the new regs will affect those on Foundation Degrees wishing to top up to Honours after completing.

The answer is - the government haven't decided yet!....so in the section on NHS bursaries, you may want to also add the foundation degree uncertainty.

Hello

I've posted extracts of the letter below to another thread but it's also relevant to your query. A letter dated 28 February 2011 David Willetts sent to Louis Hartnoll (the President of a Students' Union) has been widely circulated amongst universities and colleges. It Reads:

''STUDENTS TAKING END ON COURSES
Thank you for your letter of 21 February (and the standard letters from your students handed in to my officials on 22 February) requesting further information about the student finance arrangements for students topping up their qualifications to an Honours Degree.

As I noted in my previous letter of 9 February, students completing a full-time Foundation Degree in 2011/12 who continue their studies 'end-on' to Honours Degree level on a full-time basis in 2012/13, will retain their existing student support and tuition charge arrangements on their 'top-up' course.

The same principle will apply to students full-time Foundation Degrees (and certain other lower level courses such as HNDs) in 2011/12 who wish to continue their studies 'end-on' to Honours Degree level on a full-time basis in a future academic year. They will retain their existing tuition and support arrangements.

The definition of an 'end-on' course for 2012/13 will include students topping up to Honours where the mode of study (i.e. full or part-time) remains the same on their higher level course. Those students who change the mode of study on their higher level course and those where there is a gap between their Foundation Degree and 'top-up' course will be subject to the new tuition charge and support arrangements on their second course in 2012/13 and subsequent academic years.

I trust that this reply will enable you to clarify the position for your Foundation Degree Students''.

So foundation degree students wishing to top-up must not have a gap between the 2 courses and must remain on the same mode of study on both courses (as part-time students currently don't get the same kind of financial support as full-time students). I hope this is helpful!

setmefree2

Looking at the figures in your table 17 I have to question your assumptions about graduate wage growth.

Do you really believe that a graduate who is capable of starting their career on £25k ends it 30 years later on £44k (in 2015 pounds) or that a student who is capable of starting their career on £30k will end their career 30 years later on £52K?

It's this assumption alone (weak wage growth) that explains the discrepancy between the figures modelled by Accountants for the BBC and your own. The BBC Accountants have the £25k a year student paying back £78k because they have higher wage growth whilst the MSE student pays back a mere £43k.

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

From my own personal point of view, I think I'm going to have assume that my kids are a little more ambitious than the student dreamt up by MSE, so I think that the BBC figures from Baker Tilly et al have more relevance to my own familes finances than the MSE figures.

Disappointing really.

Oldernotwiser

tubster wrote: »

and b/ this is going to cost a lot of students a fortune, particularly if there is wage inflation and future governments tinker with it, eg lower the threshold, or extend the 30 years just like they did for the old student loans (and who thinks that over 30 years they won't?) so the low repayments mean the old demon of compound interest is at its worst. You start off with something that looks generous, then once everyone has accepted the principle you tighten the whole thing up; it is elementary politics.
r

There have been several types of student loans in the past and changes have never been applied retrospectively. I don't think that any government would risk doing this as it would affect many graduates who'd reached positions of influence and power.