MSE News: Only one third of pupils understand the new tuition fees system

gadgetmind

Oldernotwiser wrote: »

Much simpler to consider repayments as a graduate tax and far less off putting as well.

It depends if you like tax. I don't.

Taiko

Just to correct ONW, fee loans were introduced in 2006. Was means-tested fee grants in 2003.

2sides2everystory

Agent W on his feet in the Commons at the moment - some news for Dentistry and Medicine students it seems - and did I hear something is to be injected as a sop to those universities getting above their station to fiddle the average fees back towards £7,500?

Oldernotwiser

Taiko wrote: »

Just to correct ONW, fee loans were introduced in 2006. Was means-tested fee grants in 2003.

Sorry, getting my dates in a muddle!

wozearly

2sides2everystory wrote: »

It is in fact an unfair and particularly discriminatory tax on all who take the shilling which can be changed far too easily by future iterations of government, but can ALWAYS be changed by strength of public opinion.

As far as I know, no government has retrospectively changed the rules on student loans - for example, the new system is not being applied to people who took out loans prior to April 2012.

There are lots of good reasons why the tax and benefits systems in all their complexity are virtually never amended retrospectively and although its technically possible that a future government could make retrospective changes, that's just as possible for anyone who still has a student loan outstanding.

To me, the key issue is whether or not the new system is appropriate and/or fair. I certainly don't think its perfect, although I do think its less bad than a flat graduate tax that was being kicked around at some point.

Part of the problem to me is that a lot of the objections to the student loan system are either a) based on rhetoric or misinterpretation or b) ignore the fact that the government is intentionally trying to rebalance the numbers in favour of graduates who receive a clear economic benefit from their degrees paying a larger amount towards the funding of that degree from future earnings.

The government badly mishandled communications around student loans and arguably deserve a fair chunk of the blame for creating a system with such significant inbuilt uncertainty and complexity.

But in their defence, different people have hugely different views about how much taxpayers should subsidise students and what we should be trying to achieve with our education system at university and in general. There's never going to be an answer that pleases everyone - particularly not when there are huge differences between the winners and losers of the current proposals.

wozearly

2sides2everystory wrote: »

OK perhaps my Vietnam reference was a bit too early for your experience - basically I meant that history shows us that all is often not what it seems on the surface, especially when there was an obvious likelihood that something opposite to what government wanted the world or just their own citizens to believe was actually happening all along.

I didn't object to the reference because Vietnam was before my time - I objected to the view that there is an "obvious likelihood" that the SLC will suddenly become an evil institution designed to help companies get one over on graduates.

It still seems incredibly far fetched to me.

2sides2everystory wrote: »

That is secondary. The CRAs are merely the government sponsored repositories for our personal data. The real question is who then might have access to it directly (your word from an earlier post?) or indirectly?

I'm sorry, but that's nonsense. The government doesn't sponsor or pay the CRAs to exist. Government departments might make use of data held by CRAs that they don't have themselves, but that's no different to how companies use CRAs at present.

2sides2everystory wrote: »

Yes you are right - CRAs are very different to what most people think. Did you know that personal data can be manufactured (and be accurate)? Yes of course you did.

It isn't possible to manufacture personal data. You can't psychically determine someone's bank details, or medical history, or so on and so forth. Either you have it, or you don't.

You can make guesses about some data around salary levels, media preferences and so on (e.g. if you know (x), (y) and (z) about someone, you might be able to assume what (a) and (b) are by looking at other people where you know (x), (y), (z), (a) and (b) for certain), but that comes down to trend analysis - Experian's segmentation work is based on correlating trends to identify groups of people with similar and broadly predictable characteristics.

2sides2everystory wrote: »

You said it. Awful isn't it? Bearing in mind the interest rates could be changed on a whim of government affecting a huge proportion who have basically signed a blank cheque right up to the limit of whatever tax is set from time to time. It is almost like a leap of faith we are presented with here, isn't it? There is a not insignificant number among the working population who have an ingrained religious tendency to donate the same kind of sums this scheme demands to charity associated with their religion, and I don't mean those who play Euromillions each time there is a rollover. Their voluntary burden is laudable and it doesn't affect their ability to get a mortgage either. What is to be said about a 2015 graduate starting to pay an extra 9% tax? Not exactly laudable is it? Some Vikings have a better word for it - they'd probably say 'det er træls' especially since they educate their youth to age 23 or so completely for free.

Is taking student loans from the tax system awful? To be honest, its been shown to be pretty darn effective in terms of getting the payment back, which means overall its cheaper for individuals as you're not having to pay fees for debt collection or write off as much debt as your average commercial loan provider...and it means student loans aren't subject to credit scoring criteria before you get given them.

As for changes to interest rates, as I said in the post above, governments rarely make retrospective changes. It doesn't mean they won't, but if you believe this is a real risk then to avoid it you'd need to argue for a subsidy system where degree fees are paid in full without any debt being attached to individuals...which ultimately means a full taxpayer subsidy.

I don't actually think that's necessarily a bad idea, but unless we want to spend *more* on subsidising students from taxation, then you'd have to look at ways of limiting who is allowed to go to university, or require students to pay up front and/or take commercial loans to cover any shortfall between subsidy and degree cost - a completely different political minefield.

2sides2everystory wrote: »

Now that IS a plainly naive or deliberately misleading contention. We all know (or should know) how corporate and government will already both abuses and fails to enforce that law. The Information Commissioner is a toothless beast.

Even if we took that as read, the issue is still that from a credit rating perspective, student loan payment information is essentially worthless to commercial lenders and so is therefore worthless to the CRAs who make money by leasing out access to the information they have.

Potentially its useful to confirm salary details and so on for marketing purposes, but if you're going to go down that route it'd be easier to raid HMRC's database and get details on everyone - not just graduates. If the government's colluding on this, the SLC wouldn't be the preferred mechanism.

Even assuming this somewhat politically risky situation was allowed...why bother? What would be in it for the government that would be so valuable that they'd be willing to collude with the CRAs, accept the political risks of discovery and then knowingly break the law in order to give them information that they're already able to obtain in many cases from other sources?

I don't mind a good conspiracy theory, but there has to at least be a credible motive.

I'm certainly willing to believe in a mild level of government corruption where individuals stand to gain directly (see the expenses scandal), but I find it much harder to believe that the entire House of Commons, and all employees at the SLC / HMRC / CRAs, etc. would collectively be willing to set up a fundamentally "evil" system designed to disadvantage all taxpayers that could be blown open at any number of points along the way.

gadgetmind

wozearly wrote: »

the government is intentionally trying to rebalance the numbers in favour of graduates who receive a clear economic benefit from their degrees

So, at the very time we need to be encouraging young people to acquire the degree-level skills that the private sector is desperate for, HMG introduce plans to financially flay said people for most of their working lives.

Sweet.

Fortunately, we continue to get lots of grad applications from Poland, Spain, Greece and Italy, from well-educated (and very grateful!) people who won't be burdened with this debt, and so won't be as demanding regards salary.

HMG must really really hate our bright youngsters.

2sides2everystory

wozearly wrote: »

... ignore the fact that the government is intentionally trying to rebalance the numbers in favour of graduates who receive a clear economic benefit from their degrees paying a larger amount towards the funding of that degree from future earnings.

I am not ignoring it, far from it - it is one of the government's most ridiculous arguments. The "statistics" they have been using to support the argument are a nonsense and the suggestion that the great unwashed should be excused tax in discrimination against those who simply seek to better themselves through higher education is crass tabloidesque propoganda.

If the nation is so short-sighted as to have us all believe that individuals daring to dream they can become something better should pay for their dream, then let's at least tax those actually living the dream i.e. those who do "successfully" demonstrate the point e.g those earning over £50,000. The stupidly low threshold figure of £21,000 a year will trawl deeply into the budgets of people who cannot even afford a rail season ticket let alone a first mortgage.

I suppose such an income tax hike might get a hoard of banker gangs complaining because many members of the trader teams who are paid ridiculous money probably cannot sport a decent maths A level between them and yet they will still claim they are hard-working, uniquely skilled and indispensable. Actually it wouldn't work, would it? They'd just double their salaries again and keep taking it from our pension funds as "charges" which inexplicably we still let them play with and churn for their own benefit.

Please don't even think about reminding us again that the new scheme trawls less in repayments from low earners than it does under the existing scheme - so what? In the intervening years between the respective implementation dates of these respective old v. new tuition fee / student loan schemes, first jobbers emerging from the pipe will have lost out to the tune of much more than any amount they might think they have saved compared to earlier graduates.

This is because of secretive deliberate devaluation of the pound which new graduates might plan to earn versus the Europe or broader world they might like to spend it in, and by erosion of employment protection laws, and by removal of promotion opportunities - all of it designed to shackle new students as soon as possible to the UK mill, as part of a subdued labour force causing ruthless capitalists the least fuss and doing their dirty work with the least questions.

The devaluation is the UKs preferred way of replacing all the money that the bankers have been sucking out and hiding. We now call that missing money the national debt. That makes bankers smile broadly especially since we inexplicably still tolerate them and even attempt further secretive deals with them. Totally baffling, isn't it ... ?

wozearly

2sides2everystory wrote: »

I am not ignoring it, far from it - it is one of the government's most ridiculous arguments. The "statistics" they have been using to support the argument are a nonsense and the suggestion that the great unwashed should be excused tax in discrimination against those who simply seek to better themselves through higher education is crass tabloidesque propoganda.

If the nation is so short-sighted as to have us all believe that individuals daring to dream they can become something better should pay for their dream, then let's at least tax those actually living the dream i.e. those who do "successfully" demonstrate the point e.g those earning over £50,000. The stupidly low threshold figure of £21,000 a year will trawl deeply into the budgets of people who cannot even afford a rail season ticket let alone a first mortgage.

I wasn't referring to you when I made the point about people missing the government's intentions - I was speaking generally about a lot of arguments against the new system.

On the other points, I don't have a particular beef with the 9% repayment of salary above £21k in principle (bear in mind that the threshold is an exemption, so someone earning £25,000 is only paying back 1% of their salary). Its similar, and a bit more forgiving at lower salaries, than the current approach.

What I personally don't like is that because universities were given free reign to push fees up to £9k (bad move) the loan amounts are now large enough at a base level that RPI (+0%-3%) increases are likely to outstrip general salary rises (I'm assuming £21k won't increase with RPI each year, as a nice stealth tax) in a lot of cases (bad move), and that the system appears to be expecting to 'force' wealthier graduates to subsidise less wealthy graduates in that there's still no news on whether early repayments will be allowed (bad move).

Despite scratching my head at some of your previous posts, I agree agree with you here - particularly that its better to use the wider income tax system to be progressive with society than it is to create other groups based on formal education (or lack of) and then set up a separate progressive pseudo-tax within them.

Now, if only we could do something about that (justified?) paranoia towards capitalism, the government and financial services organisations...;)

Oldernotwiser

2sides2everystory wrote: »

The stupidly low threshold figure of £21,000 a year will trawl deeply into the budgets of people who cannot even afford a rail season ticket let alone a first mortgage.

I really cannot see how someone earning £30,000 ( as an example) is going to be having difficulty in making repayments of less than £70 pcm. By the time the repayments go to over £100pcm, the graduate would need to be earning over £35,000 and well able to afford this as well as a season ticket. You'd need to be in the higher rate tax bracket before your student loan repayments cost you more than an average pub lunch for 2!