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

The_One_Who

Dylanwing wrote: »

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.,

Those who emigrate will still have to pay it back. There seems to be a common misconception that if you spend x years out of the country then your student loan is wiped.

Sobraon wrote: »

At a recent event at DS1's school, on learning of the expected debt level of graduating English university students, a bright young thing in the lower 6th was heard to opine, "£50K!! Sod that for a game of soldiers! I'm out of here as soon as I graduate".

And you know what - I don't blame him.

See above.

Frankly, if someone is being put off going to university because of the 'debt' then perhaps they need to re-evaluate whether or not university is really for them. I know that I was lucky in not having to pay, but I would have happily paid if needed. Yes, it would be great if higher education was free, but it's not, and you need to work within the system that we have.

tyllwyd

But going back to the article yet again - I thought one of the aims of the Browne review was to encourage competition among universities?

"In our proposals, there will be no single fixed price for higher

education. Institutions are all different and they provide a
wide range of different courses. We want this diversity to
flourish. Different courses will cost different amounts.
Institutions will have to persuade students that the charges

they put on their courses represents value for money."

But Martin's article seems to show that this aim has failed, since he is telling us that there is no point in choosing a course based on lower fees. If that is the case, why have we got loans and not a graduate tax? Where is the incentive for universities to compete on quality and cost of their courses? Why is this being presented to us as a postitive result instead of as a failure?

melancholly

tyllwyd wrote: »

But Martin's article seems to show that this aim has failed, since he is telling us that there is no point in choosing a course based on lower fees. If that is the case, why have we got loans and not a graduate tax? Where is the incentive for universities to compete on quality and cost of their courses? Why is this being presented to us as a postitive result instead of as a failure?

you see now you're getting it! none of the government 'promises' are true! it's a masterclass in spin. it seems that they didn't have the balls to cut HE in a similar manner to what is being done in wales, so they're doing it this way; higher fees -> less students -> some will have to close. instead of a systematic overhaul, it's a shambolic situation. i'm not sure the changes in wales are the best way or necessarily needed but at least it's an honest approach.

Oldernotwiser

g24 wrote: »

You know what - if that person doesn't understand the extremely generous terms of these 'tuition loans', the fact that it doesn't get paid back until there's plenty of income to cover it, or the fact the loan gets wiped out if it can't be paid... clearly that person is unwilling to invest in their future and maybe they are not suited to further education.

People should be smart enough to think beyond the immediate headlines on this.

In addition, schools and advisers should be more effective in explaining the full situation regarding the loans.

naspencer

My son was looking to take a 1 year top up to convert the HND he is taking ( 2 year course with loan under the current system) into a degree. How is that going to work under the new scheme? There seems to be no thought put into any scenario other than the tradional 3 year Bachelor degree at a red brick university. Say his student loan under the new scheme is £12,000. If he earns just more than £21,000 he will be paying 9% on earnings above this for years, possibly the full 30 if he never has much of a pay increase, while his debt gets larger and larger, increasing at the commercial interest rates. He could have had two extra years for free! The whole thing is so complicated that it is impossible to weigh up the advantages of taking higher education courses. (And lets face it, the value of most courses themselves is questionable, the value of a university education being in the "experience" rather than the course.)

Oldernotwiser

naspencer wrote: »

If he earns just more than £21,000 he will be paying 9% on earnings above this for years, possibly the full 30 if he never has much of a pay increase, while his debt gets larger and larger, increasing at the commercial interest rates.

But if he only earns "just over" the threshold he will only be making tiny repayments, regardless of the total amount owing.

tyllwyd

Financially it depends on how much you think his potential earning power will be increased by having a degree rather than an HND - do you think he will earn enough extra over his lifetime to offset the fact that he will be paying an extra 9% on what he does earn over the threshold? What I'm trying to say is that if you think he would earn, up to say £30K maximum whether he does the degree or just sticks with his HND, then I can't see it makes sense doing the extra year. But if doing the degree would open up new opportunities, then maybe that might tip the balance.

Oldernotwiser

tyllwyd wrote: »

Financially it depends on how much you think his potential earning power will be increased by having a degree rather than an HND - do you think he will earn enough extra over his lifetime to offset the fact that he will be paying an extra 9% on what he does earn over the threshold? What I'm trying to say is that if you think he would earn, up to say £30K maximum whether he does the degree or just sticks with his HND, then I can't see it makes sense doing the extra year. But if doing the degree would open up new opportunities, then maybe that might tip the balance.

He won't actually be paying an "extra 9% ", will he? If he borrows more he'll be likely to be making payments for longer but he'll never be paying more than 9% over the threshold.

tyllwyd

I think maybe we are working from different assumptions - I'm assuming that his original loan for the course he's already taking is an old style loan, so that the repayments on that are calculated separately to any new loan. Or is there some provision to take account of them both when repayments are calculated so that repayments don't go over 9% total? Otherwise if you had two different loans at the same time, you could end up paying 9% on income over £15K, and then another 9% on income over £21K - sounds expensive so fingers crossed I'm wrong and they've allowed for that in the new scheme.

edited to say

I've just looked and last time they changed, if you had two loans you could decide which one you repaid first - if they took the same approach I guess you'd have to pay the original one first because the threshold is lower - but I assume the new loan would still be accruing interest in the meantime.

Taiko

2sides2everystory wrote: »

Remind us again who you represent Taiko that you think you can ridicule a perfectly valid post?

Do you work for the Student Loans Company? Who owns SLC ?

I represent myself, and any views posted are my own. Nor am I employed by the SLC, and never have I been employed by them.