Student Loan 2015 Discussion

kenpitfield

Please let us know what you think below.

In your Equivalent 'marginal' tax rates table, you have a note 2 against Earnings above £42,475. It should be note 3 with an additional explanation since note 2 refers to earnings above £100,000. I just wish students would take the time to read reports such as yours to fully understand the advantages of the new system instead of rioting about something they have not bothered to check out. Good luck at the concert.

Oldernotwiser

setmefree2 wrote: »

The majority will be paying a serious amount of money, otherwise the whole thing wouldn't work. Only a minority will pay a small amount.

I just don't think that the majority of graduates are high earners these days and even those on good salaries are likely to have breaks in their careers where they earn less than the threshold.

ETA. Figures from 2008 show that 1 in 3 graduates are not earning enough to make repayments on their student loan and this is with a threshold of £15,000.

w.guardian.co.uk/money/2008/oct/06/studentfinance.education

Sk84goal

"Think of it like a TAX"

Ummm yes I have thought about it and you are right! It is a tax, Because :-

1. The middle and upper classes don't pay. Because they can afford to pay upfront as they do now for their childrens private education.

2. The benefit class does not pay, because they do not earn enough.

3. The working class pay for everybody because they are suckers.

Just like any TAX really!

Oldernotwiser

setmefree2 wrote: »

I'm not sure doing a degree changes everyone's life? .

If it doesn't (and I'm not just talking financially) one would question the purpose of going.

jsue

In your guide you advise Parents not to fret and get into debt as it is the student who will repay the loan.

However it is the parents finances that are looked at when deciding how much loan to give the student. As a family who earns under £40,000 but over the magic £25,000 we are expected (as parents) to heavily subsidise our son. He will be given a combined loan and grant of around £4,500 for the year. However his rent in halls will be £3800. Clearly £700 is not enough to live on for the year and as parents we are forced to get into debt as we cannot subsidise his loan with the amount he would need from our salaries, and are having to think about re-mortgaging. Not something that we are happy with in our 50's.

Surely the government should not be means testing parents at all and should just offer the student the maximum loan and grant as it is the student who will repay?

Most parents will give their child as much financial help as possible, us included, but his means testing is financially crippling to a large number of parents.

Maybe someone out there can come up with some ideas on this one?

Oldernotwiser

jsue wrote: »

In your guide you advise Parents not to fret and get into debt as it is the student who will repay the loan.

However it is the parents finances that are looked at when deciding how much loan to give the student. As a family who earns under £40,000 but over the magic £25,000 we are expected (as parents) to heavily subsidise our son. He will be given a combined loan and grant of around £4,500 for the year. However his rent in halls will be £3800. Clearly £700 is not enough to live on for the year and as parents we are forced to get into debt as we cannot subsidise his loan with the amount he would need from our salaries, and are having to think about re-mortgaging. Not something that we are happy with in our 50's.

Surely the government should not be means testing parents at all and should just offer the student the maximum loan and grant as it is the student who will repay?

Most parents will give their child as much financial help as possible, us included, but his means testing is financially crippling to a large number of parents.

Maybe someone out there can come up with some ideas on this one?

Many students manage in the situation you describe, simply by working for a few hours per week. Even if that isn't possible and parents need to chip in, you're only going to be talking about another £20 a week - hardly something one needs to remortgage for and probably rather less than the student will have cost them when living at home!

brummierebel

Oldernotwiser wrote: »

I just don't think that the majority of graduates are high earners these days and even those on good salaries are likely to have breaks in their careers where they earn less than the threshold.

ETA. Figures from 2008 show that 1 in 3 graduates are not earning enough to make repayments on their student loan and this is with a threshold of £15,000.

https://www.guardian.co.uk/money/2008/oct/06/studentfinance.education

Quoting from the article:

A third of students who started university since fees were introduced in 1998 are earning too little to make repayments on their loans, ministers have admitted.

...

Of the 1,237,300 students who still had money outstanding on loans taken out since fees were introduced, 384,300 had not begun repaying the loans at all.

(my emphasis)

The 1/3 figure is misleading, since it doesn't include students who have paid off their loans, never mind those who did not take one out.
I know many of my University friends who lived at home either did not take out a loan or did not take out the full amount they were entitled to - and this was in the days when it was effectively interest free.

Oldernotwiser

brummierebel wrote: »

Quoting from the article:

(my emphasis)

The 1/3 figure is misleading, since it doesn't include students who have paid off their loans, never mind those who did not take one out.
I know many of my University friends who lived at home either did not take out a loan or did not take out the full amount they were entitled to - and this was in the days when it was effectively interest free.

You're right, it is a bit misleading but my main point still stands; an enormous number of students won't make any repayments, particularly after the new threshold is introduced.

melancholly

setmefree2 wrote: »

I'm not sure doing a degree changes everyone's life? It's also a serious amount of hard work that may, in the end, reap very little financial reward. Yes doing a degree might be enjoyable, yes it might help you "expand" your mind.... but in the end is it £50k to £80k worth of "enjoyable" or "mind enhancingness" over 30 years? Maybe students will reach the conclusion that they can "enhance" their minds in other cheaper ways?

It's a serious financial commitment and some people might reach the conclusion that it's just not worth it.

i would never imply that a degree would change everyone's life. my post said 'could' rather than 'would' for that very reason. the uni experience is as much about what students put into it. i don't think a degree is a prerequisite for a happy life and career, and i'm sure plenty of people will decide it isn't worth it. as long as that's using all the facts, then that make sense.

there have already been plenty of posts thinking that repayments are 9% of total gross salary every month or don't get that repayments are related to income at all. the national press has done a great job of telling everyone how expensive this is but not a great job of explaining how the loan as a whole works. that's even more of a problem in families where no-one has been to uni before since they don't have any prior experience of student finance.

i think plenty of degrees aren't value for money at £3K under the current system!! i don't university is for everyone and a 50% target has always been nuts. i just don't want great candidates to be put off completely. i wish the system wasn't being reformed in this way but since it is, it's important that the positives are put across as well as the negatives.

Oldernotwiser

melancholly wrote: »

i would never imply that a degree would change everyone's life. my post said 'could' rather than 'would' for that very reason. the uni experience is as much about what students put into it. i don't think a degree is a prerequisite for a happy life and career, and i'm sure plenty of people will decide it isn't worth it. as long as that's using all the facts, then that make sense.

there have already been plenty of posts thinking that repayments are 9% of total gross salary every month or don't get that repayments are related to income at all. the national press has done a great job of telling everyone how expensive this is but not a great job of explaining how the loan as a whole works. that's even more of a problem in families where no-one has been to uni before since they don't have any prior experience of student finance.

i think plenty of degrees aren't value for money at £3K under the current system!! i don't university is for everyone and a 50% target has always been nuts. i just don't want great candidates to be put off completely. i wish the system wasn't being reformed in this way but since it is, it's important that the positives are put across as well as the negatives.

I wish we could have this as a Sticky!