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

GeneHunt_2

melancholly wrote: »

- if it shifts fees down that may appear to be good for students, but the calculations have shown that the difference between £7.5K and £9K fees is not all that meaningful for repayments,

Meaningful for the government, however, who will have to borower much, much less money.

WISHIWASRICH_2

melancholly wrote: »

fwiw, here's the same story in the THES. for anyone interested in the topic, it's a good website to check for news about it all. plus the comments sections at the bottom can get very entertaining!

http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=417870&c=1

I could have written this one (but I didn't)

• JC 21 October, 2011 The govermnet had hoped that universities would sensibly set fees according to what they had to offer and that that would lead to better value-for-money for the student. As it turned out, many universities set high fees on, frequently, questionable grounds: I personally know two VCs who publicly (and while I was present) stated that "low" fees would mean they would be viewed as a lesser product, and for that reason alone they would set high fees. Absurd.
  
  Given that the universities refused to act in a reasonable manner, the government was obliged---it is supposed to govern, after all---to come up with measures to sort things out. That is exactly what has happened. The universities have only themselves to blame for any flip-flop, and most of those crying foul will be the lesser universities that went overboard.
  
  As a parent with kids who will be entering university in the next two years, I'm glad some common sense has been forced on the sector.

I'm guessing there are about 40 Unis who can charge £9k - the rest will probably have to compete on price. For example, if my children want to go to UWE Bristol vs Bath Spa and one was cheaper I'd encourage them to pick the cheaper one.

imho.

tyllwyd

WISHIWASRICH wrote: »

...I'm guessing there are about 40 Unis who can charge £9k - the rest will probably have to compete on price. For example, if my children want to go to UWE Bristol vs Bath Spa and one was cheaper I'd encourage them to pick the cheaper one. ...

I'm inclined to agree - unless you go into the field that you study, for a lot of people the fact that you are a graduate is more important than the university you studied at by the time you are a few years into your career. OK, maybe neither debt will get paid off if you take out a loan, but considering that a pretty healthy interest rate is applied to the loan, at least with a lower amount outstanding you have a better chance of getting it paid off and out of the way, so you might pay less, and you can be confident you that won't pay any extra, so the balance is tipped in favour of the lower fees.

melancholly

you see i don't think the unis have been unreasonable..... they've tried to do what they can to make sure that their income doesn't sink overnight. the fee levels they're asking for are not much different from what the government support plus lower fees added up to.... there has also been a great deal of money coming in from 'cheaper' courses subsidising more expensive courses. the number of unis already on the brink of financial trouble before the fees were cut was already scary.

my (admittedly partisan!) view is that whatever you may think about the new fees system, the unbelievably fast schedule to bring it in is a major part of the problem. giving more notice could have given time for unis to assess charges and to restructure where needed. plus had the white paper come out in full detail before the deadline for them setting fees, they'd have made informed decisions. unis have been appalling at engaging the public and explaining how they spend money and there are very few VCs who are well liked at any institution, but then again, it won't be the VCs who end up out of a job with staff cut backs! or the ones who have to see students face to face. i think many have been the worst possible spokespeople for explaining uni finances. that in and of itself has allowed Willetts to make statements that are such a stretching representation of reality that they really do fall into the category of lies!

you can't expect a cruise ship to do a handbrake turn - it's been made very clear that it won't work with the behemoth that is the NHS, but the HE sector is a similar situation. again; if banks can't be expected to make changes in under 8 years, how on earth can all unis change their entire financial systems in just 9 months (and really a lot less since the white paper was months later than the bill was passed)? you can tar greedy unis all you want, but this situation has been so spectactularly badly planned by government, that to me, they have to responsible for all the current uncertainty.

nbldmum

melancholly wrote: »

the unbelievably fast schedule to bring it in is a major part of the problem. giving more notice could have given time for unis to assess charges and to restructure where needed. /QUOTE]

The sudden tripling of fees I think has also caused the huge problems for parents. Parents may well have planned for costs of current lower fees, but don't necessarily have the capacity to suddenly find the cash for such overnight hikes. I know the argument that you don't have to pay upfront etc etc but the level of repayments and debt accrued under this new system is just..... wrong.

If there had been notice given of such impending hikes, say in a minimum of 5 years, I guess many more parents and potential students could try to put something aside and plan. This way, we haven't had the opportunity to plan.

melancholly

nbldmum wrote: »

The sudden tripling of fees I think has also caused the huge problems for parents. Parents may well have planned for costs of current lower fees, but don't necessarily have the capacity to suddenly find the cash for such overnight hikes. I know the argument that you don't have to pay upfront etc etc but the level of repayments and debt accrued under this new system is just..... wrong.

If there had been notice given of such impending hikes, say in a minimum of 5 years, I guess many more parents and potential students could try to put something aside and plan. This way, we haven't had the opportunity to plan.

yes - i completely agree that the timescale is appalling for all concerned! i think it's actually scandalous that students have had to already apply for some courses without the details of student loan early repayments being confirmed. (my point was that the current mess is the responsibility of government decisions, rather than being due to unis themselves behaving badly. they are clearly not perfect - far from it - but they are reacting to changing goal posts and making plans on half baked ideas)

nbldmum

Looks like a leading University is holding talks with banks about private lending to provide loans cheaper than the Government scheme - according to an article in The Sunday Times today ("Families remortgage to avoid student debt"). Raises fears also that if many opt out of the Gov scheme then it endangers long term viability - even likens it to "sub prime."
Vice chancellor of Surrey Uni interviewed, indicated to have been in talks with banks such as Santander.

Not just parents and students having grave doubts about all of this. It looks like the Unis are convinced that this is not a good deal for individuals, particularly if you are a medium earner who in their late 30s starts to face repayments that "start to become quite an expensive thing".

setmefree2

nbldmum wrote: »

Raises fears also that if many opt out of the Gov scheme then it endangers long term viability - even likens it to "sub prime."

Thanks for telling us about the article. I will have to see if I can get a copy.

If the government's aim is to sell the student loan book and people do pay upfront in large numbers, then I could see why a buyer might think that what is left in the book might constitute "subprime".

EDIT

If large numbers were to opt out, this could endanger the state scheme's long-term viability and potentially leave it as "subprime" — dominated by those unable to repay. Ministers forecast at least 30% of loans will be written off.

Sunday Times 30th Oct 2011

I read somewhere that about 20% to 25% of students currently take no loans. Edit I see in the article the Surrey Uni VC said it was a third at Surrey who pay upfront and his guesstmate was 17% nationally.

It's obvious from the article that Surrey Uni have been very seriously considering going private.

Thanks again for the heads up on that article nbldmum.

SamE07

Just wondering... does the policy which only requires students to repay their student loans when they're earning over £21k per year rise with inflation like the repayments do...?

Perhaps I've missed something out when I've looked, but in 30 years, we have no real idea what £21k will be worth, so it could be the equivalent of £10k in the future. So... my point is, if repayments increase over time, it requires the minimum salary to increase otherwise real payments would rise significantly. :eek:

Not sure if I'm explaining myself well or not, but it's something that is bugging me and I want to know before I fall into another 'Working Class Trap' of this Tory led government.:mad:

melancholly

SamE07 wrote: »

Just wondering... does the policy which only requires students to repay their student loans when they're earning over £21k per year rise with inflation like the repayments do...?

Perhaps I've missed something out when I've looked, but in 30 years, we have no real idea what £21k will be worth, so it could be the equivalent of £10k in the future. So... my point is, if repayments increase over time, it requires the minimum salary to increase otherwise real payments would rise significantly. :eek:

Not sure if I'm explaining myself well or not, but it's something that is bugging me and I want to know before I fall into another 'Working Class Trap' of this Tory led government.:mad:

http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes
under point 4 - the threshold is designed to rise over time. (which it didn't under the previous system where the same £15K threshold has been in place for quite a few years). student finance websites are down right now so this is the only link i can find, although it's not as specific as is ideal. there are many things i don't like about the new system, but they have at least done something to avoid this as, you're right, it would be a way of increasing payments in real terms.