New! Student Finance Calculator 2012

Tron65

Hi,

I have checked the article, forum and the app and cannot appear to get the answer to this question..

I am 50, I am on a part time OU Degree course.... I note the app suggests I will pay for 25 years (or until death!) but am I still liable for the outstanding loan when I hit my pension (at 65/70??)? Or is the age irrelevant - it simply depends on my income until death?

Cheers

Ed-1

Tron65 wrote: »

Hi,

I have checked the article, forum and the app and cannot appear to get the answer to this question..

I am 50, I am on a part time OU Degree course.... I note the app suggests I will pay for 25 years (or until death!) but am I still liable for the outstanding loan when I hit my pension (at 65/70??)? Or is the age irrelevant - it simply depends on my income until death?

Cheers

When did you start the course? If it was in September 2012 or later then you are still liable for your loan for 30 years after it enters repayment (6th April after you leave the course) or until death if this is sooner, but of course repayments will only be required if you are earning over £21000. Loans aren't written off at retirement age anymore (they were prior to 2006).

smiffy

This tool is helpful, but in my case I need to borrow £8,500 for the tuition fee for just one year, as this is the additional training over my existing degree.

I should also be able to get a maintenance loan - again only for one year.

So it would be great if this calculation tool would let me pick one year. The current minimum duration is three years.

Mrs_Arcanum

The student loan system is highly flawed, as the amount you get depends on parents income. Yet it is not parents who will pay this back.

Lokolo

Mrs_Arcanum wrote: »

The student loan system is highly flawed, as the amount you get depends on parents income. Yet it is not parents who will pay this back.

Just because the student can take out more with a lower parents income, doesn't mean they have to/need to.

Mrs_Arcanum

Lokolo wrote: »

Just because the student can take out more with a lower parents income, doesn't mean they have to/need to.

The biggest maintenance loan available is to Students whose parents joint income is around £42,000. Below that they get some grant and less loan. Above that they get less loan & no grant.


You cannot borrow more than this amount even if you wanted to. My daughter will have around £1,000 left of her loan to live on once accommodation is paid for. She could take less in loan & live on fresh air I suppose.

redbarcookie

Hi, can anyone please shed any light on why the calculator on the directgov student finance site provides such vastly different results?

For example, £9000 tuition £0 maintenance 3yr course and starting salary of £22000 on MSE gives total repayment of £19,300 over 30yrs with the rest written off. On directgov the same criteria gives total repayment of £62,079 after 22yrs 2mths. Add in a maintenance loan of £5000 and MSE result is the same but directgov is £114,116 over 30yrs!


I expect some difference between calculators due to different assumptions re inflation rates, salary increases etc. but the directgov one seems to be based on a fundamentally different premise.


Any explanation gratefully received.

nemo183

redbarcookie wrote: »

Hi, can anyone please shed any light on why the calculator on the directgov student finance site provides such vastly different results?

For example, £9000 tuition £0 maintenance 3yr course and starting salary of £22000 on MSE gives total repayment of £19,300 over 30yrs with the rest written off. On directgov the same criteria gives total repayment of £62,079 after 22yrs 2mths. Add in a maintenance loan of £5000 and MSE result is the same but directgov is £114,116 over 30yrs!


I expect some difference between calculators due to different assumptions re inflation rates, salary increases etc. but the directgov one seems to be based on a fundamentally different premise.


Any explanation gratefully received.

I'm currently researching the figures. The answer is that the're all correct - and they're all wrong. You have arrived at the heart of the matter. If you have purely an academic interest then visit some of the briefing notes that explain the figures and you'll see how complex it has become. Different parties make different assumptions that suit them best.

I've found the same with just about every data set I've worked on. There always seem to be multiple versions of the truth. Another serious issue are the constant attempts by government to revise, revision, re-imagine - whatever - the calculations so the results match policy better. It's like getting your bank statement, not liking what you see and so rubbing out some of the figures. It isn't a party political thing, either side seem equaling untrustworthy. I'm beginning to think it must have pervasively negative effect on all involved if you can't face up to the facts and end up lying to yourself.
www.parliament.uk/briefing-papers/sn01079.pdf

Even if you knew the calculator was correct, it's a pretty pointless exercise. As you say, there are a number of variable factors - RPI, Wage Inflation etc. We have no idea what they will be, and they make a huge difference over 30 years. Also there's a considerable difference between men and women's lifetime earnings, and no place to adjust for it. (of the bottom 50% of lifetime earnings, 80% are women). It's probably unlikely the coding is wrong. But has you can see from Paul Bolton's figures, the student loan system, which hasn't long been created and is relatively simple, is now complex to the point where it's out of control - no one has a clue.

But the calculator is irrelevant, as quite honestly, is most of Martins in-depth explanation of the loan system. I have deep respect for Martin, but he's missed the most important point.

The majority of students will never pay their loans back because they will never earn enough to come remotely close to being able to.

Fact 1. Demand for Graduates - 19% (source - ONS 2014)
Fact 2. Supply of Graduates - 38% and rising (source - ONS 2014)
Fact 3. 72% of graduates feel they have settled for something lee than they expected (source - L.I. Poll 2014)

Further education is being encouraged and the expectations are that student loans will be repaid by higher earnings. This is never going to happen. If the supply is twice the demand, as the government's own figures show, this would probably be illegal on the basis of making false & fraudulent claims if done by the private sector.

Margaret Hodge is the Chair of the Public Accounts Committee which exams public finance and is responsible for scrutinising the loans figures. She believes that the RAB charge (the portion of the loan that will never be paid) will be around 40%. This adds up the a debt of £0.3 trillion. Putting aside the morality issue, this represents financial incompetence of the first order.

But ask yourself "If it's obvious there weren't the jobs, surely it's equally obvious this would be the result? So why has this happened?" Answer: I have absolutely no idea. Maybe it was an attempt to reduce youth unemployment of years gone by and it's grown like topsy.

But we don't care about that - it's our own debt we're talking about. If we only need a graduate population of 19%, the other 19% are going to have to do something else.

The average wage in the UK is around £26,500 pa. In the part of the economy that doesn't require graduate experience it will be slightly less if you strip out those higher earners, and this is the place the remaining 19% must find a home. If we continue along the path we are, this is where they'll stay. The situation is even worse in the States where they consider natural progression of this may lead to "a serious threat to national well being" (source - CIA World Book 2103)

Education is is almost always a good thing, but the link to expectations of higher paid employment is cruel. To knowingly encourage it on the basis of these falsities is something all involved should be ashamed of.

Singandbehappy

Hi, I've tried the student loan repayment calculator and come up with the following: £9,000 p.a. tuition fee loan, £5,000 maintenance loan, £25,000 starting salary (roughly - the sliders are a little fiddly!). Repayment is £36,000, reduced to £20,250 in today's money, and not repaid in full.


But the studentfinance direct .gov .uk calculator with the same input gives a repayment of over £118,000 repaid after just over 27 years.


I'm a bit confused by the vast difference between these two - can anyone help please?! Thanks

Singandbehappy

Hi, sorry, I didn't look carefully enough! I see I'm not the first person to be flummoxed by this!