MSE News: Guest Comment: Govt student loan explanations 'woeful'

GeorgeOld

Oldernotwiser wrote: »

You seem to have missed the most obvious reason for not paying it back - earning below the threshold!

Also, repayments have to be made when you move abroad and they're not wiped out by bankruptcy.

You seem to be rather misinformed, I'm afraid.

Yes, I was a bit quick off the mark there, thanks for the correction.

However, the reason I didn't mention earning below the threshold is because most student's will at some point earn above the threshold if the national statistics are anything to go by, they state that "graduates aged 22 to 64 had median salaries of £29,900".

melancholly

GeorgeOld wrote: »

However, the reason I didn't mention earning below the threshold is because most student's will at some point earn above the threshold if the national statistics are anything to go by, they state that "graduates aged 22 to 64 had median salaries of £29,900".

often those stats only refer to graduates in graduate jobs.... plus graduates who are in their 50s went to uni when they really were a minority. with so many more graduates now, the median can only decrease. i still think that in many cases a degree is worth it, but when the get into the stats, they usually aren't quiet the simple picture that is initally presented.

Oldernotwiser

GeorgeOld wrote: »

Yes, I was a bit quick off the mark there, thanks for the correction.

However, the reason I didn't mention earning below the threshold is because most student's will at some point earn above the threshold if the national statistics are anything to go by, they state that "graduates aged 22 to 64 had median salaries of £29,900".

But they may not earn enough above the threshold to repay the whole debt, particularly as they may not achieve high salaries (if they ever do) until well into their career.

As the same statistics show, graduate salaries peak at £34,500 at the age of 51.

MacMickster

So if course fees are going to be £9,000 per year, and when interest is added to the loan in respect of these alone, the majority of graduates are never going to repay the loan, then anything else borrowed over and above the course fees is effectively free money - either to save, or to spend on wine, women and song.

The idiots are the thrifty who try to keep their borrowing to a minimum, then work part-time during their time at university to support themselves. And what about the parents who have foolishly put away money to help to fund their child's education - morons obviously.

What a fantastic system someone has dreamed up! :eek::eek::eek:

tyllwyd

MacMickster wrote: »

... The idiots are the thrifty who try to keep their borrowing to a minimum, then work part-time during their time at university to support themselves. And what about the parents who have foolishly put away money to help to fund their child's education - morons obviously. ...

As far as I can see the options seem to be either stay out of the system altogether or borrow the maximum - since your monthly payments are the same no matter what the size of your loan is, and you are unlikely to pay off the loan before it is written off after 30 years, there doesn't seem to be any advantage to trying to keep your borrowings down to, say £30K rather than £50K.

melancholly

MacMickster wrote: »

The idiots are the thrifty who try to keep their borrowing to a minimum, then work part-time during their time at university to support themselves. And what about the parents who have foolishly put away money to help to fund their child's education - morons obviously.

the most sad part is that even with maximum loans, most students will still need to work part time or get parental assistance.....

WISHIWASRICH_2

Nicholar Barr FRSA is a British economist, currently serving as professor of public economics at the London School of Economics (LSE).

So he hasn't got a vested interest in keeping the higher educaton bubble a float has he?

Education is a bubble. It's totally unsustainable and like the financial system, is kept afloat by confidence. I speak to various students and they're all going to get £25k jobs after they graduate. There is some sort of reality gap between graduates and undergrads. As soon as they think "Actually, there is little chance of me getting hired, I'd rather not take on the debt" a lot of these institutions will literally carp themselves.

It appears that there is a bit of an oversupply going on here. The education establsihment need the bums on seats to keep this particular bubble inflated. I suspect that the situation today, for the latest batch of students is bleak indeed. I read a fair bit of "I didn't get a job" by various student's and I get the impression that there are rather a lot of them.


The government needs all these people in education in order to manage the unemployment figures (in addition to their statistics fudging/lying).


As for people who work in Higher Education, like Mr Nicholas Barr, well of course they're in the "business" of "educating" people. What happens to those people afterwards isn't their problem - their problem is to make sure there's a continual supply of new fodder as that new fodder is what's funding them!

So, do I care that Mr Nicholas Barr thinks that the coalition haven't explained the tution fees properly?

Well no actually.

chaostheory

I'd be willing to bet that by the time costs of loan administration and defaults is taken into account in 30 years time, it will be found that it would have been cheaper for the taxpayer to meet the bill in the beginning.

The concept of 'free' education at any level is a myth. Everyone who works pays for the education they had via taxes. Why create costly structures to replace the existing repayment means i.e through the Inland Revenue?

It doesn't matter how the new system is explained it's jus' plain dumb.

dimbo61

Its a TAX on getting a degree or a job in many professions !!!
So you leave university and pay 22% tax 11% national insurance and then 9% on top in repaying student loans.
Do mortgage lenders take into account the student loan repayments You bet they do and it will have a massive effect on the size of the mortgage you can get and also your ability to save up a good deposit.
The interest on a £42,000 loan over 30 years is HUGE so you will never pay it off no matter how low you think the rates will be ( only way is UP!)
A debt for the most of your working life Lets hope the standard of education the next generation of university is outstanding.
I have 2 sons attending uni this september and will have to help support then both

gadgetmind

Did I miss something? Every detail of the new fees/loan/debt system is now understood EXCEPT early repayment. Anyone who wants/needs to know how it works can easily find out, and even model their own likely situation so they can decide if it's for them.

Other than the undecided, what hasn't been explained? If you can't understand it, maybe you're not university material?