'Don't pay your kids tuition fees upfront' Discussion Area

nbldmum

Final point: I am still a bit staggered by the projected salary assumptions on the calculator......"It's life Jim, but not as I know it!"

Oldernotwiser

The_One_Who wrote: »

I am also someone who thinks that higher education should be more restricted to those who are academically capable. And if that happened there would be more money to go around and the funding system would be able to cope.

I think that this is the most crucial point in the whole debate over degree level funding.

tyllwyd

nbldmum wrote: »

3. The repayments are based upon rpi - I think that I am right to say that this isn't set in stone and therefore those monthly repayments could conceivably alter over time, and therefore make monthly living a tad tight.

No, although the interest charged on the loan is linked to RPI (there are different rates depending on different circumstances), the monthly repayments are based on a percentage of your salary. So if RPI increases, your monthly payment won't increase, but the length of time you will be paying over will increase (up to the 30 year maximum of course).

setmefree2

melancholly wrote: »

you see, to me, it seems like it doesn't matter what anyone says, you're going to disagree because you're mad about the situation. you can't understand that most parents don't have a spare £45K and that your situation is the exception rather than the rule.

I think you're right but it's not because I'm mad, it's because I think it's wrong that someone who earns a little over £21k should be giving 41% of his marginal income to the tax man. Or that someone earning £42k+ has to give 51% of their marginal income to the tax man.

I actually can't understand why anyone thinks that is OK? I am truly baffled.

setmefree2

The_One_Who wrote: »

Yes, there's fully informed and being deliberately misinformed. You seem to want to scare students into not going to university at all unless they some from a wealthy family. No one is trying to shy away from the numbers in this, but higher education costs and the pot of money is only so big.

Why would I want to scare people away from going to University? To be honest, if anything I err on the side of thinking the British economy needs lots of gradutes in as many disciplines as possible. I'm all for Golf Management, surf studies, guitar degress, media studies - all the degrees that "academics" laugh at.

That doesn't mean I'm prepared to go along with any old pile of rubbish to achieve that end.

Anyway, do you really think this is all about funding higher education or is it just a tax grab? SLs are a stealth tax - a tax that doesn't look like a tax imho.

kayr_2

melancholly wrote: »

you see, to me, it seems like it doesn't matter what anyone says, you're going to disagree because you're mad about the situation. you can't understand that most parents don't have a spare £45K and that your situation is the exception rather than the rule.

it doesn't matter how much regular posters have stated that they don't like the changes. however, that doesn't mean we want to put anyone off going to uni unless they come from a wealthy background.

all i want are the facts to be made clear and students to be encouraged to understand the loan system as much as possible. that doesn't require scaremongering or sugar coating, but if you're going in full tilt on scaremongering with a dozen posts at a time, then the other side of the arguement needs putting across.

however, you seem to support parents making all the decisions and controlling their children rather than helping develop them into adults who are financially responsible. this just doesn't make any sense - so i can only assume that you are just disagreeing with any post i have written on principle, regardless of content.

Well this thread has taken off today! FWIW I don't think setmefree2 and melancholly disagree as much as they think they do! I don't think smf2 is saying she wants to control her kids financially. Nor are melancholly et al blithely supporting loans. Things aren't that black and white.

As for the students are adults theme: 18 year olds are a mixture of maturity and immaturity. Becoming an adult is a learning curve. Some get there before others, depending on life experience and personality. They have to have a bit of experience first. That's why university can be so valuable - you learn to handle money etc in a somewhat sheltered environment.

I dropped my son off at university a couple of days ago: he is reasonably financially aware but not ready to take on board all the implications of student loans. However he is well on the way. He gets the minimum maintenance loan (£3.5Kish?)and we make up the shortfall. However a fellow student from a low earning household will get nearly £3K in grant and £3.4K bursary where he is. So that's £6.4K of "free" money a year (and I'm very pleased for them) - more than my child will get from loan + parents. He can't work in term time. He'll be fine but I can't see why students from low income families would be put off as they won't have to borrow so much. It's the children of eg teachers who will struggle and be deterred from university. However I agree with melancholly and the others about cutting student numbers so the system is more affordable. The whole thing is getting crazy and is really quite depressing when I stop to think about it. Not looking forward to having to think properly about child #2 next year!

nbldmum

tyllwyd wrote: »

No, although the interest charged on the loan is linked to RPI (there are different rates depending on different circumstances), the monthly repayments are based on a percentage of your salary. So if RPI increases, your monthly payment won't increase, but the length of time you will be paying over will increase (up to the 30 year maximum of course).

Thank you. ....I think that is good news! But again we are looking at so much still being unpaid at the end of 30 yrs.

Is it set in stone that this 30yr limit will not move? Will future Governments be able to change their minds and chase you for unpaid dues...perhaps by adding extra taxes upon your demise?

This is being sold as something that won't affect potential mortgage applications.....at present the lenders say that it won't come into their calculations. This can change. Isn't ability to pay back each month a fairly fundamental question for lenders these days? With one or two graduates in a household the available cash may not be quite as it seems.

tyllwyd

nbldmum wrote: »

... Is it set in stone that this 30yr limit will not move? Will future Governments be able to change their minds and chase you for unpaid dues...perhaps by adding extra taxes upon your demise? ...

I think you can be pretty confident that the 30 year limit won't change for people who sign up on those terms. But no government now can dictate what a different government is going to do in 30 years time, so you can't be 100% sure that they won't meddle with the thresholds above which the student loan is paid, or invent a totally new tax or some such. That's part of the picture to be taken into account when deciding whether or not to take out a loan.

kayr_2

nbldmum wrote: »

Is it set in stone that this 30yr limit will not move? Will future Governments be able to change their minds and chase you for unpaid dues...perhaps by adding extra taxes upon your demise?

This is being sold as something that won't affect potential mortgage applications.....at present the lenders say that it won't come into their calculations. This can change. Isn't ability to pay back each month a fairly fundamental question for lenders these days? With one or two graduates in a household the available cash may not be quite as it seems.

I think that is a very good point about mortgages. Even if lenders ignore SLs in theory, in practice 2 graduates will have less in the way of disposable income with which to pay a mortgage so yes it will affect how much they feel they can borrow. Maybe this will put the brakes (a bit) on silly house prices?

I also think you are right about the potential for future governments to change the T&Cs. My son has signed on the dotted line for this years loan and the form includes a clause about regulations being amended which I wasn't keen on but what choice is there for most people?

Oldernotwiser

tyllwyd wrote: »

I think you can be pretty confident that the 30 year limit won't change for people who sign up on those terms. But no government now can dictate what a different government is going to do in 30 years time, so you can't be 100% sure that they won't meddle with the thresholds above which the student loan is paid, or invent a totally new tax or some such. That's part of the picture to be taken into account when deciding whether or not to take out a loan.

To be fair, none of the changes over the last couple of decades has been introduced retrospectively.