Student Loan 2015 Discussion

motivatedmonkey

I'm concerned whether we can be sure that the new repayments only relate to courses starting in 2012.

In the current "Student Loans - A Guide to Terms and Conditions 2011/2012" (on the Direct.Gov website) it states:

3. Your responsibilities:
You must agree to repay your loan in line with the regulations that apply at the time the repayments are due and as they are amended. The regulations may be replaced by later regulations.

I called Student Loans helpline in May about the section that states "regulations that apply at the time the repayments are due" (not necessarily when loan taken out) . They said that regulations for any loan whether repayment had been started or not could be subject to change.

So having seen the terms and conditions currently in place, I'm not sure how we can be sure that the new repayments are only for 2012 students.

The_Baroness

Oldernotwiser wrote: »

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.

If that is the case then why the need for the grants and bursaries for any student in the first place?

helloha

Martin

PLEASE do a 9K fee table to go with this.

2/3rds of universities will be charging this, see this quote from the BBC website

"Over 100 universities in England have revealed their plans for undergraduate tuition fees for 2012.

About two-thirds of these want to charge the £9,000 maximum fees for some or all courses - and only a handful are offering all their courses below £8,000 per year."

There is a list on the BBC website (search for University Tuitions Fees: full list - news story 8 June - MSE won't let me post link as a newby)

While some universities will set some courses lower, the list speaks for itself. Setting the table at such a low level looks like you are some kind of coalition cheerleader, and I'm sure that is not your intention. So why not publish both versions, perhaps with link to the list so people can look up the institution they are interested in?

MrsAverage

Pete-Husky wrote: »

Dear MSE

I like the guide. Especially the calculated equivalent marginal rate tax (51% higher rate? How we have moved on from Blair's aspiration culture to avoid dis-incentivising success)

My son is only 14 so we're thinking ahead.

One thing I would like to see relates to the competitiveness (or not) of the commercial interest rate. I find it scandalous that these loans will be at 8-9% based on current and projected RPI when most of us have mortgage rates at 1-4%.

Here is the question - can you add a section on "Is this the best deal?"

For example - how does it compare to the BOMAD (Bank Of Mum and Dad)......

Are there better unsecured or secured loans out there for the amounts borrowed? What would be the difference in total amount repaid?

Equally, if BOMAD is loaded, and can fund a loan to their child amount up front, what is the interest they are forgoing based on the same payment schedule, and best long term saving rates available?

This is really important to know early, especially if the govt introduces early repayment fees (scandalous) as it may be advantageous to sort out in advance so never enter the new system. Your site always helps us be clever to spot the best deal on offer, so it would be really good to see whether the government 'product' is the best we can do

I'd like to echo Pete Huskys request for 'Product comparisons' - how else can we help our son (due to go to Uni 2012) to decide which is best without full information? Would we let him sign up to a 30 year commercial loan with half blank t&Cs - no way!
Like many parents we saved some towards his HE over 17 years only to have less than a years notice that we will be falling way short.
I am disheartened at Govts inabilty to present us with full facts and distrust their basic sums so far.
Worst of all is their continued reprise of 'if you earn less you won't have to repay it all' - how demotivating is that? We should be encouraging bright people - not suggesting they settle for 'average'

PLEASE Martin, option comparisons ASAP including full pre-payment (perhaps via additional mortgage) and partial loans.
Also would he have to borrow full 3 years in one go or is it year at a time -

Lokolo

MrsAverage wrote: »

I'd like to echo Pete Huskys request for 'Product comparisons' - how else can we help our son (due to go to Uni 2012) to decide which is best without full information? Would we let him sign up to a 30 year commercial loan with half blank t&Cs - no way!
Like many parents we saved some towards his HE over 17 years only to have less than a years notice that we will be falling way short.
I am disheartened at Govts inabilty to present us with full facts and distrust their basic sums so far.
Worst of all is their continued reprise of 'if you earn less you won't have to repay it all' - how demotivating is that? We should be encouraging bright people - not suggesting they settle for 'average'

PLEASE Martin, option comparisons ASAP including full pre-payment (perhaps via additional mortgage) and partial loans.
Also would he have to borrow full 3 years in one go or is it year at a time -

Student loans are a year at a time.

There can really be no comparison to any other lending option. Mortgages are completely different to each other so there isn't a "best fit" to compare to.

And not everyone goes to university to earn big money; teachers and researchers do not earn loads after graduating, but degrees in these terms are done for a career they will enjoy.

setmefree2

Martin I came across this article in the Times Higher Education

http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=416516&c=1

I noticed this

Mr Lewis argued that parents would have reacted differently had the system been described as a tax and would be less inclined to take unnecessary measures such as helping to pay children's tuition fees up front.

Maybe I'm reading too much into this but I feel that this indicates that you are biased against parents helping their kids with student tuition costs and maintenance. Perhaps you could explain why you hold these views?

Do you think this bias might influence the sort of advice you give to parents and students?

By the way, I'm not sure your right - what parent wouldn't help their kids avoid a 30 year tax if it was within their power?

motivatedmonkey

setmefree2 wrote: »

Martin I came across this article in the Times Higher Education,

"link"

I noticed this

Maybe I'm reading too much into this but I feel that this indicates that you are biased against parents helping their kids with student tuition costs and maintenance. Perhaps you could explain why you hold these views?

Do you think this bias might influence the sort of advice you give to parents and students?

By the way, I'm not sure your right - what parent wouldn't help their kids avoid a 30 year tax if it was within their power?

Apart from the intervention of parents, some students themselves may wish to absolutely work their socks off in holidays, evenings etc. to try to repay some of the debt and avoid a 30 year tax. It should be their free choice to do so and hard work be encouraged.
(The fact that such a student would have taken a loan in the first place presupposes that they are not from a wealthy family ).

brummierebel

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.

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

Lokolo wrote: »

It's 9% off net.

It's 9% of gross.

kayr_2

Oldernotwiser wrote: »

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.

Maybe some people won't have to repay their loans but in the case of my children, I'm pretty sure they will end up doing so because of the careers they are likely to follow. So for us, a loan is quite different from a grant or bursary. We are constantly told it is the student's responsibility to fund himself, not the parents' (one of Martin's favourite themes) but our kids won't have the grants others have (and I do think that's fair as we are fortunate to have good jobs - don't have a problem with grants for the less well off). I am happy to give them what they don't get in grants and indeed have been saving for 15 years so I am in a position to do so, but it would seem logical to me that every student should be able to borrow the same amount, if it's their responsibility to fund their own education. They get to borrow the same amount for tuition fees, what's the logic in not letting them borrow the full amount for living expenses (which only more or less covers rent)?

kayr_2

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.

Or you could say if you are allowed to pay fees upfront (perhaps funding this by taking a gap year as mentioned above) then it would be unreasonable for someone else to have to pay a penalty for early repayment. I hope there won't be a penalty for early repayment as it seems incredibly unfair to penalise someone, perhaps from a low income background, who would like to choose to repay their loan earlier rather than use the money they earn for e.g. an expensive car.