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

nbldmum

Time flies....now got two on the £9 k fees with the triple whammy prospect of 3 in 2016....and the election promises are making me look at this again. To those out there better informed than me....where or what are the data compiled so far on the actual numbers of students entering Uni in 2012, 2013 and 2014 and what proportion of these are taking out the £9k each year? Also any data on socio economic background of these ie poorer taking out all £9k each year and well off eg perhaps previous private schooling taking none?

tyllwyd

nbldmum wrote: »

... Also any data on socio economic background of these ie poorer taking out all £9k each year and well off eg perhaps previous private schooling taking none?

Students from low income families have a maintenance grant, so they should end up with a lower student loan - it's the students from middle income families which are likely to end up with the largest loans.

silvercar

It isn't just the £9k tuition fees, it is also the maintenance loan.

Martin Lewis has blogged about this: The biggest concern to students is not the loan repayments, but the amount of money they have to live off as students. The maintenance loan barely covers accommodation costs, never mind the cost of food, books & transport.

According to my son (at uni now), the better off students are those from the richest families and those from the poorest. The students from the poorest families get a grant as well as loan and are also eligible for bursaries from the universities. They may get no help from parents, but overall they are better off than the squeezed middle.

Also according to my son, there are some students who work during the holidays and term time because they have a deal struck by their parents that the parents pay the tuition fees and they don't take the maintenance loan.

Of the seriously well off kids, who don't take any loans, there are some girls on what he describes as "princess courses" who take the full loans, because they don't ever envisage working full time and/or earning enough to have to pay anything back. Apparently the demographic on some of these courses has changed and the courses only attract those that are more calculating with money, rather than those who would lose sleep over a 40k debt.

nbldmum

Would dearly love to see some official Government stats on it though ....as I suspect there are certain groups chained to this for a lifetime ....and the differential between the " have nots" and the "haves" is destined to grow even more......seriously worried about this generation as they become couples with mortgages and thoughts of children play against trying to pay the more than £30 a month amounts back.........perhaps the Labour £6 k amount is better as it may attract more to have a go at paying some up front instead of the £9k that is so out of reach to the non- private youngsters Even though £6k is still a lot to find on top of maintenance costs.

setmefree2

Martin Lewis: 'Staggered and angry' over David Willetts

"I am staggered and angry" says Martin Lewis about David Willetts over a call to freeze the tuition fees' repayment threshold for students in England.
Mr Lewis, better known as the Money Saving Expert, and also chaired the Independent Taskforce on Student Finance Information.

Release date: 03 Jul 2015

Watch the Interview:-

http://www.bbc.co.uk/programmes/p02w73p5

setmefree2

In a pamphlet published by the Policy Institute at King’s College London, Mr Willetts - who was minister when the current system was introduced - argues that, as a first step universities should be allowed to increase them in line with inflation for the lifetime of this Parliament.
In addition, he wants the level at which students have to repay loans for their fees to be frozen at the current level of £21,000 - again for the lifetime of this Parliament.

Mr Willetts also argues that there should be a five-yearly review of student finance at the start of each government - which could decide issues like reducing the threshold for repayment and/or increasing fees.

http://www.independent.co.uk/news/uk/home-news/student-tuition-fees-could-rise-again-warns-former-universities-minister-david-willetts-10326505.html

setmefree2

2nd July 2015

However, the universities minister, Jo Johnson, declined to rule-out a rise in tuition fees or changes to student loan repayment terms when answering questions in the House of Commons two days ago and only said the Government would ensure it has “a stable and sustainable funding regime for our universities and higher education institutions in general.”

http://www.independent.co.uk/student/news/universities-call-on-uk-government-to-push-tuition-fees-up--students-threaten-to-become-ungovernable-10360840.html

setmefree2

http://blog.moneysavingexpert.com/2015/01/09/a-deliberate-threat-to-the-government-u-turn-on-the-21000-student-loan-repayment-threshold-i-will-organise-mass-protest/?_ga=1.31845118.1700448820.1369160731

This seemingly small change actually has a huge impact on student finance. All the maths behind the explanations of what will happen to university students is based on the promised uprating.


There is also a principle here – while a Government is free to change how student finance is done for future university starters it should never retrospectively change things (if it only froze the £21k threshold for new starters, with a decent notice period, while I wouldn’t like it I wouldn’t be protesting). Retrospective changes haven’t happened before (well there are some arguments that the sale to Erudio has resulted in such changes, but nothing as fundamental as this). It shouldn’t happen now.

The terms that you get at the time of the loan should never be negatively changed (or even positively changed without giving you the option to opt out). This would be a negative change, so it is wrong.

arsenalbarnie

setmefree2 wrote: »

http://blog.moneysavingexpert.com/2015/01/09/a-deliberate-threat-to-the-government-u-turn-on-the-21000-student-loan-repayment-threshold-i-will-organise-mass-protest/?_ga=1.31845118.1700448820.1369160731

Seems to me the Government can do as they like. When you take out a student loan part of the terms and conditions of it are just that they can change the terms though they don't tend to retrospectively. They like to keep quiet about all the thousands of EU citizens that go to uni here, take out the loans then potter off back home after, never paying a penny back. The whole student loan system stinks, it is a ticking timebomb, thought up on the back of a fag packet like many other of their policies.:mad:

Ed-1

Martin's argument that a threshold freeze would be a retrospective change to terms and conditions is a fallacy. The terms and conditions of student loans are set out in the Education (Student Loans) (Repayment) Regulations 2009 as amended in 2010-2014. The 2012 amendment to these regulations (i.e. the terms and conditions) set out that the threshold for new student loans taken out for students starting courses from 2012 is £21000 (indefinitely). What was announced (verbally) in 2010 by the former business secretary Vince Cable was an intention to uprate this with average earnings from 2017. So freezing the threshold would maintain the status quo and not alter anything - it is not a retrospective change to terms and conditions (even though these are allowed in any case simply by amending the regulations) although it is a u-turn on the intention made by a Lib Dem minister in the previous government.

Moreover, Martin says in his blog (which I think is completely over the top) that no retrospective changes have ever been made to student loans. This is also a fallacy. Similar announcements/promises/intentions were made by John Denham, the former Labour business secretary, to give students starting courses from 2008 (so entering repayment in 2012) a five year repayment holiday on student loan repayments which Martin himself wrote a blog about:

http://blog.moneysavingexpert.com/2007/07/10/student-loan-five-year-payment-holiday-take-it-take-it-take-it/

Low and behold, this intention was never put into the regulations either (after John Denham was replaced by Peter Mandelsen, the latter ditched the plan) although it was put into the guide to terms and conditions booklet issued for these students when they started - see page 14 of the 2008/09 SLC guide to student loan terms and conditions - so on Martin's argument this was a retrospective change to the terms and conditions too. Why wasn't he out protesting then?

The point is the regulations are designed to be flexible which is why the terms and conditions of student loans state that "borrowers agree to repay their loan in line with the regulations that apply at the time the repayments are due and as they are amended". Student loans are much like a tax - if you try to fix tax rates for 30 years you end up with an unsustainable system. Look at New Zealand's equivalent to our student loans system - the HELP (Higher Education Loan Programme) system. The repayment threshold there was recently frozen even though it had been uprated for years. It may be Martin's view that retrospective changes shouldn't be allowed but it isn't the reality. The government has complete free will to retrospectively change the terms of loans taken out right back to 1998 if it wanted to as this is completely permitted in the terms.

In my view freezing the £21000 repayment threshold would be the best policy option in the circumstances. When that value was chosen, it was assumed to be equal to 75% of average earnings in 2016 but it has turned out to be more like 80% of average earnings in 2016 as earnings growth was so weak over 2010-2015. So delaying the uprating until the threshold is once again equal to 75% of average earnings (which is what was intended at the time the system was designed) seems eminently fair to me.

Martin says to freeze the threshold for new students only but when the threshold wasn't meant to be that generous to students from 2012, why only apply a freeze to students starting 2016 onwards and not 2012 onwards? It was no more meant to be more than 75% of average earnings for students starting from 2016 then it was for students starting from 2012. There are also practical problems with making endless ad hoc changes to the system. You can't have loads of student loan repayment systems running simultaneously as the tax system would be crippled - employers wouldn't know where to start as there would be thresholds (all really close together) all over the place - highly undesirable.

Freezing the £21000 threshold while continuing to uprate the original £15000 threshold by inflation would also allow the £15000 threshold to catch up with the £21000 threshold, which could allow the thresholds to be merged, simplifying the system even further.