Student Loan 2015 Discussion

DaveO

atypical wrote: »

Students can only base their decision on the information available today. Making people aware of all potential future possibilities wouldn't be helpful.

The idea it wouldn't be helpful to make people aware of future possibilities given the information that has come to light recently about active consideration by Osborne of lowering the repayment threshold seems perverse to me.

ML actually said in his TV program while government is "omnipotent" it doesn't usually retrospectively vary the terms. Given what has gone on in various spheres since the government took office that really isn't true anyway and in this particular case with active discussion underway considering doing just this it is very misleading to make the possibility seem a slim one.

This point is stressed not to imply the loan will never have to be repaid, but that the repayments will only need to be made when students are earning so should be manageable.

That is not how he came across in the program and I don't think the article reads that way either.

Some might think they'd be struggling with repayments even when they don't have a job.

It's simple enough to point that out and I don't see why making them aware of what non-payment means for the debt alters the message they don't have to pay when unemployed.

Taxes don't have to be progressive.

The graduate tax proposed by the NUS is progressive so it's misleading to say the fees are like a graduate tax in the context of UK higher education funding.

The comparison of the state as a lender accountable to voters vs a private company accountable to shareholders is difficult to make. The terms are very favorable so I can't imagine anyone avoiding them like the plague.

Most people can't avoid them them but I think you are being a bit naive if you expect the system to remain a state run enterprise.

GeneHunt_2

DaveO wrote: »

You can't not tell people the whole story. If the whole story scares people it tells you there is something wrong with the story.

now now. Young people should not be told the truth. :silenced::silenced::silenced:

GeneHunt_2

FWIW I think the coalition parties are too far down in the polls and too close to an election (less than 2 years now) to do anything retrospective.

Still stinks though and yeah shame on ML for not saying so. Makes you wonder what else he forgets to tell people? :think:

GeneHunt_2

Hummmm look at this

Cable rules out hitting existing graduates on loan interest

Vince Cable, the business secretary, says he has “ruled out categorically” any rise in interest rates for graduates who took out student loans before 2012, while stressing that plans for a sale of student loans are ongoing

“However the study also contained a proposal which suggested a change in interest rates charged to existing students - that proposal was comprehensively dismissed two years ago and will not be taken forward by this government. But the wording of Mr Cable’s statement appears to leave open the possibility that the government could change the terms for post-2012 borrrowers.”

http://www.timeshighereducation.co.uk/news/cable-rules-out-hitting-existing-graduates-on-loan-interest/2004907.article

Dunroamin

DaveO wrote: »

Their salary is bang on the average starting salary for graduates (for 2013 and 2014) so I think it is entirely reasonable. That is why I chose it as an example.

You would need a crystal ball to give average starting salaries for graduates in 2013 and 2014 so I suggest that you check your figures.;)

If you want another example a newly qualified teacher starts on £21,588 (or £27K for inner London).

Of course if they are unemployed on graduation or do not get a graduate level job they won't earn this much but that isn't what the system is predicated on happening or it is unaffordable and of course their debt increases.

The point I am making is most graduates who get a graduate level job will pay so the "don't pay if you earn less than £21K" message should be put forward as a safety net not being shouted about to give the impression you are going to get a free Uni education and that is certainly how it came across in the TV program.



You can't not tell people the whole story. If the whole story scares people it tells you there is something wrong with the story.

I wouldn't dream of not telling students the full story but that doesn't mean scaremongering and deliberately frightening them off

They have? Who to? Do you have a link or something I could read about this?

See below, I'm surprised you didn't know this as it's common knowledge.

The Rothschild report makes it plain the pre-2012 loan book is not commercially viable unless the interest rates can be increased and the risk (of loans not being paid back) left with the taxpayer.

http://www.honoursstudentloans.co.uk/

http://www.thesis-servicing.co.uk/thesis/contact-1/

ETA

A more realistic take on graduate starting salaries.

"We have no statistics to challenge the AGR’s finding. But we do hear from graduates every day – and from anecdotal evidence we would hazard a guess that the true average graduate salary (that is, the average salary among graduates that are earning above the minimum wage, in both ‘graduate’ and ‘non-graduate’ jobs) might be closer to… £16,000? At the most, £18,000. And of course that’s without factoring in the estimated 120,000 graduates who are earning less than the minimum wage doing unpaid (or very low-paid) internships."

http://graduatefog.co.uk/2012/1871/average-graduate-salary-26000-earning/

DaveO

Dunroamin wrote: »

You would need a crystal ball to give average starting salaries for graduates in 2013 and 2014 so I suggest that you check your figures.

I did. It's based on research from a company called Income Data Services and that research forecasts a freeze on graduate starting salaries from 2012 which results in these projected salaries.

They have? Who to? Do you have a link or something I could read about this?

Dunroamin wrote: »

See below, I'm surprised you didn't know this as it's common knowledge.
http://www.honoursstudentloans.co.uk/

http://www.thesis-servicing.co.uk/thesis/contact-1/

Well it was news to me but as you are clearly familiar with the fact I also presume you are aware the loans sold to these organisations refer to pre-1999 loans which had a mortgage style repayment of 60 months and were not tuition fee loans? And that the average loan was for £390?

So given they were completely different loans with completely different terms and conditions the fact the T&C's of these loans were not varied does not set a precedent that means post 1999 loans won't be subject to having their T&C's changed.

It must also mean they were profitable as-is for commercial companies to take them over. That isn't true for post 1999 loans hence they are more likely to have their T&C's changed.

The post 1999/pre-2012 loan book which is the subject of the Rothschild report will according to them require T&C's to be varied with an increased interest rate (and the taxpayer underwriting the loans) for them to be attractive to commercial companies.

And for for post 2012 its because Osborne needs some cash that the conditions may be varied.

It's just not credible to use the pre-1999 loan sell off to suggest loans post 1999 won't be subject to having their T&C's varied. I don't think ML has done so directly but he does suggest retrospective changes are rare.

In light of the fact these reports are actively being considered by government I think it's time to change that tune.

A more realistic take on graduate starting salaries.

Well I got mine from the Telegraph and also from here:

Complete Uni Guide

which if you fiddle with it allows you to see different estimated starting salaries for different professions. I work in IT by the way and the salary is virtually spot on and I don't work for some high paying company.

Now I see via your link they ask should average salaries take into account the fact some graduates don't get graduate level jobs. I am sure many won't but I stand by my point that this isn't the object of the exercise when going to University and if you are unfortunate enough to end up in that position you still end up with a loan that compounds the debt. Which means when you do hopefully earn to your potential you are saddled with a high marginal tax rate for years.

Furthermore if you were unlucky enough to be stuck at under £21K for 30 years then the fact you have not had to pay back a penny would I suggest be of little comfort. And that assumes the threshold isn't lowered or frozen which would mean you are far more likely to get hit for repayments anyway.

DaveO

GeneHunt wrote: »

Hummmm look at this

Well if the pre-2012 loan book doesn't have its interest rate changed and they still want to sell it some other way will have to be found to make it attractive to a private company to buy.

So if the graduates on that loan scheme don't end up paying more that way someone else will. A direct tax-payer subsidy of some sort?

As to not ruling out changed to T&C's for post-2012 students this being an easier target has already been mentioned. Which is, it would be easier to change it because people don't understand it.

So for example freezing the threshold at £21K is a favourite. Doesn't sound too bad. Few will work out what that means over the years. An easy sell.

If that were to happen I'd hope ML would be shouting the consequences of any such variance in the T&C's loud and clear.

It would be fantastic if he did. It would expose such a cynical move for what it is but I have to say I don't think he would.

gadgetmind

DaveO wrote: »

Looking round the net the expected salary for a Computer Science graduate is £25500.

We recruit hundreds of Comp Sci grads per year and I'm sad to say that the salaries we offer have had to rise significantly over the last couple of years and it's now north of £28k.

If it wasn't that we're also recruiting skilled grads from elsewhere in the EU (mainly Poland, Spain, France and Greece) then I think that competition would mean we'd be having to pay £30k+.

However, we do consumer electronics engineering and R&D so a little different to what people think of as IT.

Dunroamin

DaveO wrote: »

Now I see via your link they ask should average salaries take into account the fact some graduates don't get graduate level jobs. I am sure many won't but I stand by my point that this isn't the object of the exercise when going to University and if you are unfortunate enough to end up in that position you still end up with a loan that compounds the debt. Which means when you do hopefully earn to your potential you are saddled with a high marginal tax rate for years.

Furthermore if you were unlucky enough to be stuck at under £21K for 30 years then the fact you have not had to pay back a penny would I suggest be of little comfort. And that assumes the threshold isn't lowered or frozen which would mean you are far more likely to get hit for repayments anyway.

You can't just rule out the large number of graduates who aren't in graduate level jobs as "not the point of the exercise". The reality is that, with the number of people now going to university, there is nothing like the amount of graduate level employment to soak up the number of available graduates.

Your argument also ignores the number of people who will never work (or only work part time) because of illness, disability, childcare or caring responsibilities, whether for the whole of their lives or only part of them. The majority of students aren't going to go into a graduate level job earning over £21,000 and then climb the career ladder to lofty financial heights with never a break in employment or a dip in their earnings. Life isn't like that.

gadgetmind

Dunroamin wrote: »

The reality is that, with the number of people now going to university, there is nothing like the amount of graduate level employment to soak up the number of available graduates.

Yes, it's partly numbers but it's also quality. Many people are going to university who quite frankly shouldn't be there and we've in effect just raised the school leaving age to 21.