'If no-one will fully repay £9,000 student fees, how is the system sustainable?' blog

tyler80

I'd just like to point out just how wretchedly complicated student loan financing is...

Which is truly worrying if you've ever dealt with the company that administer the whole thing, even the very simplest thing seems beyond them.

wozearly

I've only had to deal with the SLC once, and I hope the next time I do will be to claim back the money I've overpaid them when I finally pay off the loan, because they're not competent enough to work with HMRC to halt payment collections until the tax year AFTER you've paid it off.

Hmm...

Admittedly, the Inland Revenue managed to take the biscuit during a tax rebate because part of the reassessment crossed into a new tax year and it turned out I was eligible for a refund of 1p...and so I received a cheque for 1p from the Inland Revenue. Even though this cost them far more than that to process and mail to me. I never even cashed it. It makes a great souvenir to hang on the wall.

Perhaps its something endemic about any organisation that works for the government?

jazzygm

Hi all
I have a few questions regarding the Student Loans.

I've been struggling to find the relevant pieces of legislation about the student loans. I took mine out in 2003, so I believe I'm subject to a 25 year maximum payback period as set out here (para 3):
(I can't post links so, the uk legislation site with this bit after the site name: /uksi/2009/470/regulation/19/made)

The catch is that this piece of legislation is dated 2009 and therefore was not the applicable legislation at the time I made took out my student loan, does anyone know what the appropriate piece of legislation is? I've tried many searches but am unable to find it.

The 'new' system, as discussed in this thread, is said to have a 30 year maximum payback period, but I can find absolutely no evidence of this in legislation. In particular the 2011 ammendment, (as above: /uksi/2011/784/made), to the above 2009 act at makes no mention of a change to this. Am I missing something crucial?

Lastly, I think (but am by no means an expert) that the government has to issue an impact assessment to changes in statutes, does anyone know if they produced one for the recent change in Student Loans?

I'm particularly interested in this 30 year write-off clause because I'm willing to bet that there is no funding currently set aside with which to write off these debts at that time. Given that student loans can be packaged and sold by the government (and have been in the past) these liabilities will have to be paid off by the UK taxpayer when the 30 year point is reached, and every year thereafter as subsequent tranches of student loans expire. I'd like to know what the expected cost of these is, and whether it has been considered, hence my hunt for the appropriate legislation and impact assessments.

spinquark

There are all sorts of ramifications from the type of utterly idiotic madness of politicians and their emperors clothes of a student taxation system.

1. For some students it may actually pay to borrow as much as possible because they will know there is damn all chance that they will ever have to repay it. For example, a student planning to get married and have children (yes quite a few still exist), will if giving up work or taking part time school hours work to care for their child, likely never have to repay, or repay very little.
2. This new tax (that is what it is folks) is regressive. Earn little - pay nothing, earn above average - pay 9%, earn pots - still pay 9% but only until you have paid it off. So who will it hurt - the middle classes yet again. As always the poor will have it all paid for them, the rich will get off lightly, and the middle will be squeezed, squeezed, squeezed until it slashes its wrists.
3. The policy is anti-education. The "self-made man" will pay nothing towards the education of his doctor, dentist, surgeon, lawyer, accountant, music teacher, graphic designer, business professionals etc even though he gets lucky enough to be a high earner. e.g. Alan Sugar types, the wealthy plumber etc.
4. A new set of tax loopholes will evolve to avoid this tax. Reduce your earnings to minimise the costs via extra pension contributions, by withholding income as capital and taking it as capital gains, etc etc The accountants of the rich and/or self employed will dance all over this.
5. Imagine the enormous costs of tracking every graduate over 30 years and tracking their income, grad tax, remaining debt etc. A more complex tax system is a more costly one - and we all pay for the system.
6. A generation already robbed and impoverished by their grand parents/baby boomer generation will be further robbed and impoverished by those who got a free education, cheap houses, generous pensions, retirement at 55, endowment windfalls etc and insist on enjoying their own luxurious retirement sitting in 4/5 bedroom detached houses whilst watching their children/grandchildren struggle in tiny 2/3 bedroom boxes.
7. A bunch of people with kids are going to start moving/buying second homes in Wales and Scotland to escape the tax.
8. So the logic of the madmen says - taxes from non-students shouldn't pay towards costs of students. OK so why should I pay towards law enforcement when I don't break the law, health costs of smokers when I dont smoke etc etc.

Sorry, but the world has truly gone mad as the hatter and then some.

(There is a very easy answer to all this - say 2p on income tax - everyone contributes to education costs because everyone benefits. If you graduate and then earn peanuts you'll pay less income tax, if you strike it rich as a city lawyer etc you'll pay more. Simple, cheap, progressive. But of course since about 1990 no politician has ever dared to raise income tax - but have raised less easily visible taxes like NI, VAT, fuel duty, council tax, etc etc.)

2sides2everystory

Nick Clegg is this morning really REALLY confused.

Clearly he has NO idea what is really needed for development of balanced children in the UK.

In one breath he said sorry but we had to do the graduate thing but we've actually done something else very important - 50 hours for two year olds at school.

These people living higher middle class lives with nannies and university educated parents of their own have no idea what damage it does trying to teach kindergarten kids and even younger ones now, in a schoolroom type environment to read and write and do maths too early, but only paying lip service to developing soft but core social skills which is the absolutely crucial thing. It doesn't matter if kids don't start reading and writing and doing maths until age 7, but if they and their brothers and sisters are little hooligans at that age (and it is not about control, it is about social example and social inclusion and respect) then they are truly all lost for another generation.

And they will still be little hooligans if their parents are ignorant and the school/nursery is so ignorant that it measures itself by how many two year olds can start to learn to read and write their own nursery rhymes. Such "development" is more like force grown rhubarb in some big terracotta pot! It has nothing whatever to do with ability to be university material later. This strategy of the government's feels like they've already decided that a great swarth of UK parents will be too busy and tired slaving for entrepreneurs to look after their children so they will take them into care for 50 hours and drill them with big children's school lessons.

And to use it as a soundbite in the same breath as shrugging shoulders about the disgraceful new student loan scheme is actually breathtakingly obtuse.

This current batch of politicians are clearly not planted in reality. They have been brought up on fluffy clouds above our heads.

They'll soon be taking babies away from jobseekers at birth next and having them in uniform by the age of two teaching them how to smile and march like little warriors and cheerleaders before their maths lessons.

Plonkers!