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

kayr_2

nbldmum wrote: »

Do my fees go up for each year of my course?
Your fees will probably increase by a small amount each year in line with inflation. But we don’t know for sure yet. The government has to make
that decision.
Came across the above in the student info that we have. Another bit of uncertainty, unless it has been decided upon since it was distributed.

I think they went up by about £85 last year. 2.5%ish. I don't think they'll get away with increasing them more than they have in recent years on top of what they've done already! Hope not anyway.

PaulW1965

kayr wrote: »

I might be totally wrong about this but I think they use the RPI from March the year before? Which might be slightly better, or worse, depending on the economic situation. Or I might have just imagined that. Does anyone know if it the interest rate will change on a monthly basis?

I think you have it right. Set at March RPI.

kayr wrote: »

Also does anyone know if there has been any justification of the RPI + 3% rate while you're a student from the government/DeptBIS? (Obviously it will increase the loan amount which seems rather cynical on the government's part). They are charging RPI if you earn 21K or below, rising to RPI + ? as your salary rises (sort of logical) but if you are studying you pay RPI + 3%. Seems wrong to me, but maybe I've missed something.

Looking through Hansard all I could find as a justification was that we are in debt and the country needs the money Oh and it might make it easier for the government to sell the student loan book on. Here is an interesting piece on this from Anthony Hilton from 13/6/2011

Sale of loans is a non-starter... the City will want them repaid

Has the Government really thought through the sale of the student loan book? The idea was mooted in 2009 by Gordon Brown while prime minister, and has been worked on by the business department ever since. Selling the loan portfolio in England, it's reckoned, would raise billions to alleviate the public finance deficit.
But the policy wonks are reckoning without the way the City thinks. Any commercial buyer would want the loan book written down to its net realisable value. In other words, they would want to know which loans are likely to be repaid.
This opens up the fascinating - and potentially highly problematic - prospect of making comparisons between the universities and courses.
For instance, the chances of an Oxbridge engineering graduate being in a position to repay all the advance is high but the same cannot be said for the holder of a sociology degree from one of the newer universities.
Also, the likelihood of men being able to repay all their loan sooner must be greater than it is for women - given the sexist nature of the jobs market and women taking breaks to have children.
If they want to push ahead with the sell-off, detailed analysis will have to be presented and verified - and that raises the possibility of Freedom of Information Act searches from those anxious to see the same material.
The study would also highlight the reality behind claims made by universities in their publicity material as to how many of their graduates get jobs. The more I think about it, the more it seems a non-starter.

http://www.thisislondon.co.uk/markets/article-23959998-southern-cross-collapse-is-a-scandal-but-this-is-a-mess-of-its-own-making.do

FWIW The Sale of Students Loans Act was brought in in 2008 but nothing has been securitized since it was passed.




Don't forget the £21k threshold doesn't kick in until 2017 so it's worth a lot less than £21k. One "Lord" (as in House of) said it was only worth £15k in today's pounds, a more progressive system my arris...

LauraW10

A David Cameron exclusive - how exciting!:j Our Martin does have friends in high places, doesn't he

Lokolo

FrankieBoyle wrote: »

That would be nice, wouldn't it? Looks like, other than yourself, all the parents have been chased away - AGAIN! !!!!!!?

Because parents think they know best, even when they may not. My mum was exactly the same "Don't take the loan it costs so much etc.etc.", well I ignored her, did what was best for ME. Since having loans, I've learned/learnt (ONW, which one!?), about saving, investing, pension and all sorts and now work in the city. My loans (maintenance only) I have taken have now almost overtaking what university has cost me (maintenance + tuition).

Although this won't happen a lot for the newer student loans, it still means that over a 30 year period, the money maybe better off elsewhere (as it gets written off).

Lokolo

kayr wrote: »

I might be totally wrong about this but I think they use the RPI from March the year before? Which might be slightly better, or worse, depending on the economic situation. Or I might have just imagined that. Does anyone know if it the interest rate will change on a monthly basis?

Also does anyone know if there has been any justification of the RPI + 3% rate while you're a student from the government/DeptBIS? (Obviously it will increase the loan amount which seems rather cynical on the government's part). They are charging RPI if you earn 21K or below, rising to RPI + ? as your salary rises (sort of logical) but if you are studying you pay RPI + 3%. Seems wrong to me, but maybe I've missed something.

Yes they do use March's RPI, although I am not sure why given Septembers is used for all other benefits.

Not sure why the +3% rate is during study, this wasn't originally the case, and when Martin came out with the calculator I questioned it, and they came back stating the new rule. So if you come out of university with a £15k job, the interest being put onto the loan will not be as much as it was whilst you were studying.

kayr wrote: »

I think they went up by about £85 last year. 2.5%ish. I don't think they'll get away with increasing them more than they have in recent years on top of what they've done already! Hope not anyway.

I don't see why they wouldn't increase them in general. Staff costs, maintenance and so fourth, will have rising costs, and they can't get the money out of mid-air.

Taiko

I think the 3% was always there during study.

My guess would be as a means of stopping those who could afford to pay without taking the money and paying it back the moment they graduate, thus profiteering if it wasn't for repayment charges.

kayr_2

Lokolo wrote: »

I don't see why they wouldn't increase them in general. Staff costs, maintenance and so fourth, will have rising costs, and they can't get the money out of mid-air.

Sorry, didn't mean they shouldn't increase them; just that nbldmum seemed a bit worried there might be a surprise hike in the fees in the new system. Not against reasonable rate-of-inflation increases!

PaulW1965

Taiko wrote: »

I think the 3% was always there during study.

My guess would be as a means of stopping those who could afford to pay without taking the money and paying it back the moment they graduate, thus profiteering if it wasn't for repayment charges.

Was it CPI plus 3% in the previous system or just 3%?

Lokolo

PaulW1965 wrote: »

Was it CPI plus 3% in the previous system or just 3%?

Neither. It was base rate + 1% or March's RPI rate, whichever was lower.

PaulW1965

Lokolo wrote: »

Because parents think they know best, even when they may not. My mum was exactly the same "Don't take the loan it costs so much etc.etc.", well I ignored her, did what was best for ME. Since having loans, I've learned/learnt (ONW, which one!?), about saving, investing, pension and all sorts and now work in the city. My loans (maintenance only) I have taken have now almost overtaking what university has cost me (maintenance + tuition).

Although this won't happen a lot for the newer student loans, it still means that over a 30 year period, the money maybe better off elsewhere (as it gets written off).

That's all very nice but are you aware that the government has been trying to sell your loan on since 2009 and have been unable to do so because the interest rates applied to this particular loan book are too low?

Gordon Brown is to announce the sale of £16bn worth of assets by the government in a bid to shore up public finances. He will announce the sale in a speech, in which he will say it is an alternative to immediate cuts proposed by the Tories.

Sally Hunt, general secretary of the UCU lecturers' union, said the government had still to prove that this would be a good deal for taxpayers and called for a guarantee "that the interest rate on student loans will not rise and we will not move towards a system with a commercial rate of borrowing".

http://news.bbc.co.uk/1/hi/education/8302389.stm

and it's still on the table

Ministers will decide this summer whether to proceed with the sale of the student loan book

http://www.guardian.co.uk/business/2011/jul/01/indebted-european-countries-privatisation-assets



Kudos to your Mum maybe she instinctively knows that there is no such thing as a free lunch?

...just saying....