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

WISHIWASRICH_2

MSE_Martin wrote: »

I simply don't believe it does anyone any favours to promote a "its all crap" message to aspiring children.

Martin

and I simply don't believe that it does anyone any favours to promote this "happy clappy" "it's all gonna turn out great" "just take the loan" message to aspiring children/ young adults.

WISHIWASRICH

spikyone

WISHIWASRICH wrote: »

and I simply don't believe that it does anyone any favours to promote this "happy clappy" "it's all gonna turn out great" "just take the loan" message to aspiring children/ young adults.

WISHIWASRICH

There's a difference between "promoting" a debt and educating people about it. Martin is doing the latter. Whilst I agree that the level of tuition fees in place now is deplorable, we will always need qualified doctors, teachers, engineers, and so on - and talented people from less well-off backgrounds must not be dissuaded from taking the debts now necessary to enter those careers due to misconceptions that they are unaffordable. In that respect, I don't understand why you and oakhouse13 are criticising Martin.

My main objection - and it is something on which others have already commented - is that we are now encouraging all teenagers to go to university, seemingly regardless of ability. This will draw people into unnecessary long-term debt, because on that basis the majority of those attending university will never clear their loans - the figure of earning £100k more over a career can only be based on older figures, when there were fewer graduates and therefore a higher proportion would have entered the top-paying jobs.

tyllwyd

MSE_Martin wrote: »

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.

This bullet point worries me. Don't you think it is an oversimplification? I am self-employed and pay tax through self-assessment. If I didn't pay my income tax on time, then I'm sure HMRC would come chasing me for it. If I didn't pay my student loan repayments, won't anyone come looking for it?

MSE_Martin

tyllwyd wrote: »

This bullet point worries me. Don't you think it is an oversimplification? I am self-employed and pay tax through self-assessment. If I didn't pay my income tax on time, then I'm sure HMRC would come chasing me for it. If I didn't pay my student loan repayments, won't anyone come looking for it?

You are right and it is explained in the www.moneysavingexpert.com/students2012 guide which is the core info for us on this - in detail

Then again frankly this means you are tax evading which is a far bigger sin than avoiding student loans.

bilko1234

my son was there and loved the show he is looking at going to uni in the future and said he found your message very easy to understand and helpfull, so thank you martin

tyllwyd

MSE_Martin wrote: »

You are right and it is explained in the www.moneysavingexpert.com/students2012 guide which is the core info for us on this - in detail

Then again frankly this means you are tax evading which is a far bigger sin than avoiding student loans.

I'm not suggesting tax evading - but as a self-employed person it is very easy to make a mistake and find that you don't have enough funds to pay your tax on time, and the same could happen if you have a student loan to pay. And there are plenty of people who for some perfectly innocent reason find that they've underpaid tax through PAYE and get a demand for additional tax through the post.

If you just said 'you repay through the tax system' and no more, I would have no problem with that. What I'm trying to say is that when you say 'there are no debt collectors', that's not the whole story and gives a misleading impression - OK, debt collectors won't come if you make the correct payments on time, but if you fall behind for some reason, there will be a debt and someone will come chasing for the money. Surely that's not so different from a normal loan - if you make the correct payments on time you won't ever see a debt collector for that either.

And in fact you could argue that this is worse than a normal loan because it is taken from your pay before you get it. If you get into trouble with debt, the usual advice is to pay your priority debts first - rent, utilities - and worry about the rest after, and try to negotiate with your creditors to accept a lower payment. With a student loan, you don't have that option, the money is taken in full before it ever gets to you.

Gorgeous_George

MSE_Martin wrote: »

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).

If you expect to earn less than £21K why bother going to University?

MSE_Martin wrote: »

- You repay through the tax system so there are no debt collectors.

I have no experience of debt collectors. Most borrowers have no experience of debt collectors.

MSE_Martin wrote: »

- If it hasn't been repaid after 30 years it wipes.

And you must have enjoyed extremely low paid work for most of your working life.

MSE_Martin wrote: »

- If you die the debt isn't part of your estate, it isn't passed on.

That is so comforting.

MSE_Martin wrote: »

- The amount you repay depends on what you earn not what you owe.

The less you pay, the longer the debt and the more you pay. Just like credit cards.

MSE_Martin wrote: »

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

Nope.

MSE_Martin wrote: »

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".

Nor mine. Debt has its place.

MSE_Martin wrote: »

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

Nope.



I predict that next year will see a 50% fall in University applications.

GG

CFC

Gorgeous_George wrote: »

I predict that next year will see a 50% fall in University applications.

GG

Good. Currently far too many thick kids go to university and degrees have now become devalued as a result.
I had one working for me who was doing a Masters and wanting to be a Town Planner. He couldn't even read from a screen correctly and was genuinely as thick as two short planks.

Lokolo

Gorgeous_George wrote: »

The less you pay, the longer the debt and the more you pay. Just like credit cards.

But with commercial debt your debt stays. SL debt is written off after 30 years.