Student Loan 2015 Discussion

kayr_2

jamesallen wrote: »

Has any more information come out yet about how much paying up-front will be penalised?

According to my MP, David Willetts .."has assured me that parents who pay fees upfront without taking a loan will not pay any penalties at all." And from the DBIS: I can confirm that students are not obliged to take out a loan to pay for their tuition, and are free to finance their studies by alternative means, whether drawing on family resources or other means.
However they haven't decided about possible penalties for early repayment yet.

Oldernotwiser

The_Baroness wrote: »

'More likely' being the operative words. And, if we parents are not in a position to do that, due existing financial commitments such as mortgages etc. - what exactly are our children supposed to do? Go out and get a loan at full commercial rates? I feel very upset that there isn't a level playing field when it comes to access to loans at preferrential rates, effectively penalising my children if they want to go to university. I should add that my oldest child is currently in year 12, so even if we had money spare to put in to savings, we haven't got enough time to build up any significant amounts before she would need access to them.

That was the same situation under the old system of grants, in fact, if your parents didn't contribute you received nothing. Students will have the same option as they did then, to work for three years and achieve independent status where they're no longer assessed on parental income.

jamesallen

kayr wrote: »

According to my MP, David Willetts .."has assured me that parents who pay fees upfront without taking a loan will not pay any penalties at all." And from the DBIS: I can confirm that students are not obliged to take out a loan to pay for their tuition, and are free to finance their studies by alternative means, whether drawing on family resources or other means.
However they haven't decided about possible penalties for early repayment yet.

Thanks for the response.

I think more and more people are going to be putting as much money aside as possible to do this, or at least partly pay upfront.

The loan on its own would definitely be a long-term burden, but not such a crippling one, if it were pegged at inflation. But if they're charging above the RPI, surely interest repayments alone will be crippling, on £50,000 of debt?

Seems insane to me to discourage early repayment: all of this is the nasty side of equality - the politics of envy, where the focus is all on taking the rich down a peg rather than helping out the disadvantaged.

The_Baroness

kayr wrote: »

We are quite prepared to contribute to our children's university education, mostly because we had a great time and want them to have the opportunities we had. But it is quite annoying to be told constantly that it's the student's responsibility to fund him/herself through university, for example:

Let me be clinical for a moment: it could sound callous but you need to decide whether paying for it really is your responsibility.

The system is set up that the cost is met by the beneficiary of the education - your child. When this is referred to as a 'loan' many parents feel guilty and become desperate to avoid their child getting into this debt, even though they may not need to repay it.


Obviously those of us earning above £45k-ish are expected to contribute because our kids won't get grants/bursaries (I met a student last year who was given £6000 a year so she doesn't need to take as big a maintenance loan) but the government doesn't explicitly call it the "parental contribution" any more. Given that the maintenance loan is less than the £6-7K they are estimated to need for living expenses, I don't understand why "richer" students can't borrow the full amount (I may be wrong but I think they are only eligible for 72%?); their parents are already being asked to provide the money they don't receive in the form of a grant.

May be currently 72% but will be dropping to a max of 65% according to Martin's report, which I should have said previously is extremely useful - thank you for putting this together Martin + team!

I can understand why the grants are not available to all, but like you, Kayr, I don't understand why these 'loans' are not available in full to all students.

Sheila_Wood

Hi, does anyone know if your childs ability to apply for and be successful in regard to student loans etc is linked to their parents credit history?

My husband has a CCJ and we've been struggling the last couple of years, but are now getting on top of things, but our credit rating has gone out of the door!

My son will be funding university himself, with help from us as and when, so he will need to apply for everything he can, but I'm worried this might cause problems for him.

Any info gratefully received.

Empty Nester Mum

Lokolo

Sheila_Wood wrote: »

Hi, does anyone know if your childs ability to apply for and be successful in regard to student loans etc is linked to their parents credit history?

My husband has a CCJ and we've been struggling the last couple of years, but are now getting on top of things, but our credit rating has gone out of the door!

My son will be funding university himself, with help from us as and when, so he will need to apply for everything he can, but I'm worried this might cause problems for him.

Any info gratefully received.

Empty Nester Mum

Your credit rating has nothing to do with your sons.

And credit rating has nothing to do with student finance, only bank accounts such as student account offers would be effected if he had a bad credit rating.

saxbyt

Hi, at last a clear explanation - shame the government didn't so this in the first case as it would have reduced all chat.

The questions I'd still like answered are:
1/.Does the 9% come off after other salary deductions especially pension contributions?
2. Is it 9% of gross income or Net (taxed income) that is deducted and reduces the debt?
Thanks

Lokolo

saxbyt wrote: »

Hi, at last a clear explanation - shame the government didn't so this in the first case as it would have reduced all chat.

The questions I'd still like answered are:
1/.Does the 9% come off after other salary deductions especially pension contributions?
2. Is it 9% of gross income or Net (taxed income) that is deducted and reduces the debt?
Thanks

It's 9% off net.

melancholly

jamesallen wrote: »

But if they're charging above the RPI, surely interest repayments alone will be crippling, on £50,000 of debt?

but repayments are fixed as a percentage of income. they may well be less than the interest, but at no point will any repayment be 'crippling'. the loan amount may continue to increase, but no matter how much money you owe, the SLC will take a percentage of income (9%) above the repayment threshold.

i'll just repeat that as the suggestion that a student loan will stop people getting mortgages and make their lives unaffordable aren't really true and only serve to put people university, harming access from families on lower incomes: at no point will any repayment be 'crippling'. this isn't commercial debt - you lose your job; you no longer have to make repayments.

Oldernotwiser

The_Baroness wrote: »

I can understand why the grants are not available to all, but like you, Kayr, I don't understand why these 'loans' are not available in full to all students.

As many loans will never be repayed, they're not much different from grants and bursaries and, therefore, funds are targeted at the less well off.