'Getting boos from 16,000 people about student loans…' blog discussion

Former_MSE_Helen

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "Getting boos from 16,000 people about student loans… " Blog.

Please click 'post reply' to discuss below.

flimsier

"You pay back less, but for longer and more..."

That's a lie.

You pay back less per month, but only someone trying to sell the scheme would characterise it as "paying back less". I understand you'll point out the "more" phrase, but you know what you're doing.

Gorgeous_George

I'm a little uncomfortable about Martin's role in the student fees area.

It is a debt, much like any other. You will pay it back with interest, much like any other. If you don't expect to earn £21K, why go to University.

While repaying this debt, a house will be less affordable. You will have less money to put into a pension.

GG

MSE_Martin

flimsier wrote: »

"You pay back less, but for longer and more..."

That's a lie.

You pay back less per month, but only someone trying to sell the scheme would characterise it as "paying back less". I understand you'll point out the "more" phrase, but you know what you're doing.

I think to call it a lie, is really rather unfair. It is a bullet point for me to explain - in isolation it means nothing - its all about how its explained. Which (from memory) I said roughly as

You pay back less each month so have more disposible income
Yet you pay back for a much longer period
And you may repay a lot more (only may because it depends on income due to the higher threshold).

I was very clear on this (in fact I think I got cheer, boo, boo from the kids - showing they got it)

The flashes are bullet points each one needs explaining none are stand alones.

As for trying to sell it - thats very unfair. Im takling to children to explain a system they've been scared to the brink about. One mother reading this blog tweeted to me, "I thought my 11 year old could never afford to go to university, so there was no point in working, after reading this I know she can."

So yes I am trying to sell the concept of the attainability of higher education but not the 2012 changes - but I don't particulalry want 11 year olds thinking because they are from a low income family they cannot aspire to more. And if I have to take accusations of bias to do that job - its worth it!

Lokolo

Gorgeous_George wrote: »

I'm a little uncomfortable about Martin's role in the student fees area.

It is a debt, much like any other. You will pay it back with interest, much like any other. If you don't expect to earn £21K, why go to University.

While repaying this debt, a house will be less affordable. You will have less money to put into a pension.

GG

The amounts are pretty insignificant, especially with a higher threshold, and one that rises.

MSE_Martin

Gorgeous_George wrote: »

I'm a little uncomfortable about Martin's role in the student fees area.

It is a debt, much like any other. You will pay it back with interest, much like any other. If you don't expect to earn £21K, why go to University.

While repaying this debt, a house will be less affordable. You will have less money to put into a pension.

GG

I'm afraid while I understand your point I disagree fiercely (though nicely fiercely )

It really isn't a debt like any other.

- You only repay above £21,000 earnings (tell me another debt like that).
- You repay through the tax system so there are no debt collectors.
- If it hasn't been repaid after 30 years it wipes.
- If you die the debt isn't part of your estate, it isn't passed on.
- The amount you repay depends on what you earn not what you owe.

Those are all unique and make this a very different beast.

Also you seem to predicate this on the fact that 'debt is wrong'. That's never been a part of my philosophy - I've always said "debt isn't bad, bad debt is bad".

You could equally argue no one should ever get a house.

As for less money to pay your mortgage or get a pension - that depends - if you benefit from your education (on average uni education adds £100,000 to lifetime salary at current prices) you have a lot more money to pay your mortgage or your pension.

Though you are right to say that the narrow fact of repayment does reduce that (though this isn't new its been that way since 1991 - when the first student loans started).

I am involved in this as I passionately believe that all people should have access to higher education if it is appropriate to them (and it isn't for everyone) based on a meritocratic systems not ability to pay.

The biggest issue we have stopping that is a major psychological problem about the way this is communicated (I'm talking the whole system not just 2012 changes) and that fits completely into my financial education stance - that's why Im at it.

Martin

bylromarha

Big ask from the task team and you delivered.

Well done!

oakhouse13

Are you guaranteeing these outcomes to the children you advertise to?

I'm sure many have heard you on Radio 1 recommending credit card freebies by saying you pay the card of in full and chuck the card once you have the freebie except do you think this is the outcome in real life? I don't and I think card companies and you know it.

You have a conflict of interest in my view. Your business is licensed by the OFT because you are paid for introducing people to debt in the form of credit cards.

This campaign should be headed by someone independent with no commercial interests, an academic may be but someone certainly independent of the financial services industry.

Soubrette

MSE_Martin wrote: »

if you benefit from your education (on average uni education adds £100,000 to lifetime salary at current prices) you have a lot more money to pay your mortgage or your pension.

Not if you are unlucky enough to just finish off paying your debt at the time it is written off - some estimates give the total debt plus interest repayable as £87,000 in total.

Leaving a grand total of £13,000 to play with earned over the student's life time.

I agree that university is not suitable for everyone but the climate encouraged by Labour (mainly to massage the unemployment figures imo) leading to jobs that were suitable for people with A Levels now demanding a degree at entry level, plus the 20% youth unemployment will lead many youngsters to feel that they are looking at a stark choice of benefits or a degree.

FATBALLZ

MSE_Martin wrote: »

- You only repay above £21,000 earnings (tell me another debt like that).
- You repay through the tax system so there are no debt collectors.
- If it hasn't been repaid after 30 years it wipes.
- If you die the debt isn't part of your estate, it isn't passed on.
- The amount you repay depends on what you earn not what you owe.

We've all heard the arguments for why this new version of student loan is supposed to be 'better', 'more progressive' or whatever, but at the end of the day it's a shockingly poor deal for the next generation, it was bad enough for mine, but I've nearly paid off my £9k 'loan', if I'd 'borrowed' £40k I'd have no end in sight.

The message ought to be 'Yes the new student loans are a really poor deal for you, yes your generation has been shafted, but going to University is still the best option for some of you'.

katsu

Social mobility is really important and education is a huge part of that, so well done and congratulations Martin for taking the message to those kids. They are young enough to work hard and get the grades at GCSE to get the right A Levels and so get into Uni.

We all need to make sure kids maximise their potential - as the tweet from the mum of that 11 year old proves, people need to understand the implications fully.

I think Martin is taking this message to people not to say "I support uni fees" or "uni fees are right" more that he is saying "here is how this works and this is why uni is still possible for low income people". Kids deserve chances so I fully support Martin educating people about the implications of higher education.

Martin is no more saying fees are good than he is saying the prices of utility companies are good! Martin's tips are all about understanding money, finding beneficial offerings and taking control.