MSE News: £6,000 or £9,000 uni fees? Is it an irrelevant decision?

Oldernotwiser

tyllwyd wrote: »

But there is no obligation to take a high paying job and pay back - so if you don't think you're heading for a high flying career, there is an incentive to go for a low paid job ... as a graduate, a middling income type of job is getting less and less attractive. By telling people that they should sign up on the implicit understanding that they don't have to pay it back, you are nudging graduates to head towards low paying jobs, and how can that be sensible?

And yes, I know that student loans don't get wiped out if you declare yourself bankrupt. My understanding was that they used to be, but too many students were doing exactly that so they changed the rules. If people take out loans now on the assumption that they won't have to pay back, do you trust the government not to change the rules (or carefully manipulate the thresholds to get the result they want) in the future?

You're right that the rules were changed about including student loans in bankruptcy but you've missed the point that they weren't changed retrospectively.

As far as students being encouraged to take low paying jobs, I'm afraid that's just silly. Why would anyone take a job paying £20,000 in preference to a job paying £25,000, just for the sake of avoiding repaying £30 per month?

2sides2everystory

Oldernotwiser wrote: »

Despite the fact that it's just been mentioned in the post before yours, you're ignoring the fact that student loans aren't included in bankruptcy.

Despite the fact that I edited my post to acknowledge tyllwyd's new info which he posted 2 minutes before I pressed 'Submit Reply' you are saying what exactly? That I shouldn't press Submit Reply and pull out into the main thread until I have opened another window to check that no more traffic has come down it? Was there an accident ? No ...

And what's all this assumed retrospect stuff you are now batting tyllwyd' head with? Did he say anything changed retrospectively? They changed it in retrospect but that doesn't mean they changed it retroactively does it ?

Ah ... I see my new signature is working nicely now ...

Oldernotwiser

2sides2everystory wrote: »

Despite the fact that I edited my post to acknowledge tyllwyd's new info which he posted 2 minutes before I pressed 'Submit Reply' you are saying what exactly? That I shouldn't press Submit Reply and pull out into the main thread until I have opened another window to check that no more traffic has come down it? Was there an accident ? No ...

And what's all this assumed retrospect stuff you are now batting tyllwyd' head with? Did he say anything changed retrospectively? They changed it in retrospect but that doesn't mean they changed it retroactively does it ?

Ah ... I see my new signature is working nicely now ...

You're right, I meant "retroactively". Thanks for the correction.

tyllwyd

I have never said that bankruptcy would be the way to avoid paying student loans back - what I said was that encouraging people not to worry about the size of the loans they take out on the basis that they wouldn't have to pay it all back it was the moral equivalent equivalent of taking out a loan intending to go bankrupt. And I would stand by that.

I also appreciate that the change in rules regarding bankruptcy didn't affect loans which had already been taken out. But I still wouldn't trust a future government not to change the repayment thresholds, tinker with tax rates - or whatever it is open to them to change - so as to effectively change the terms of the student loan that you take out.

tyllwyd

And I'm still confused about the logic of Martin's original article saying that we shouldn't worry about high fees - if all but a very few high earners pay back exactly the same amount regardless of the level of fees, why are the fees being published at all? Why not just say everybody pays back X amount, apart from people earning over a certain threshold, who will pay back Y amount?

atypical

melancholly wrote: »

that's what makes the system 'progressive' (allegedly). those who financially benefit from uni pay for it whereas those who don't, won't pay it all back.

But it isn't really progressive because once you pass over a threshold people on higher salaries can pay back less than those on lower salaries. They can pay back fast enough to reduce their interest bill. The graphs here show this.

atypical

Oldernotwiser wrote: »

As far as students being encouraged to take low paying jobs, I'm afraid that's just silly. Why would anyone take a job paying £20,000 in preference to a job paying £25,000, just for the sake of avoiding repaying £30 per month?

And if it were really concerning the student so much they could ask to salary sacrifice the £5,000 into their pension or something instead.

But like oldernotwiser says, it's silly.

Oldernotwiser

tyllwyd wrote: »

- what I said was that encouraging people not to worry about the size of the loans they take out on the basis that they wouldn't have to pay it all back it was the moral equivalent equivalent of taking out a loan intending to go bankrupt. And I would stand by that.

.

That would make sense if student loans were similar to commercial loans but they're so different that comparisons are irrelevant.

By your reckoning someone planning to go into a low paid career (the ministry or conservation work, for example) or who wants to have a large family and be at home to bring them up should either not go to university or consider themselves "morally bankrupt". I hope that this isn't what you really believe.

melancholly

atypical wrote: »

But it isn't really progressive because once you pass over a threshold people on higher salaries can pay back less than those on lower salaries. They can pay back fast enough to reduce their interest bill. The graphs here show this.

no - i agree with that, hence 'progressive' was in inverted commas! it's clearly a halfway house between higher fees from the tories and graduate tax from the lib dems! my point was more about how not paying it off wasn't being 'encouraged' by MSE - it's how the system is meant to work.

Dylanwing

It looks an absolute pigs ear to me. The idiot Tories keep blathering on about reducing taxes to stimulate the economy, whilst effectively adding 9% tax to your most highly educated workforce. We can't tax Banks as they might move abroad, yet we can tax Graduates who could also move abroad quite easily, or certainly the better ones could. If you take into account that even £6,000pa will never be fully paid back, then add on the people who never really earn enough to make any significant repayment, the people who emigrate etc. etc., it just looks like another financial black hole for future taxpayers to resolve. The sums just don't add up, presumably the repayments due go as debtors on the UK Balance Sheet making it look healthy for a while, leaving future generations to deal with the inevitable losses and write-offs.
I feel sorry for todays youngsters, your choice is £40K of debt, try to find a job (not easy), and Internship (William Wilberforce must be turning in his grave) or utilise the benefits system. And as retirement ages rise, more of us oldies will be blocking jobs just so that the pension savings can be spent on benefits!