How do we know student loans earning threshold will always be index-linked?

strawberry123

Despite reading several articles and listening to big-wigs with reassuring voices telling me that I "will be no worse off..etc. etc." because of the earnings threshold before loan deductions being raised to £21,000, the write-off of the loan after 30 years etc.....excuse me for being cynical but WHAT ASSURANCES DO I OR ANY OTHER POTENTIAL STUDENT HAVE THAT THESE GOALPOSTS WON'T BE MOVED?? :eek:

This government has moved more goalposts than a goalpost manfacturer (e.g. disability benefits qualification, NHS costs covered, discounted or free home insulation for those on working tax credits irrespective of whether they earned the bare minimum to qualify, need I go on?) - WHY WOULD ANYONE WITH HALF A BRAIN IN THEIR HEAD ASSUME THEY WONT MOVE THE GOALPOSTS WITH REGARD TO STUDENT LOANS? How do I or anyone else know that in, say, 10 years time they wont decide to reduce the earnings threshold before payment to err £10,000 and up the interest rate massively and decide my loan won't be written off for 50 years rather than 30?

DO WE HAVE A CONTRACT WITH SLC TO STATE THAT THESE KIND OF DETRIMENTAL CHANGES (TO STUDENTS!) WONT HAPPEN, AS IF WE WERE DEALING WITH A REGULAR BANK, OR BECAUSE WE ARE DEALING WITH H.M.GOV ARE WE OPEN TO DETRIMENTAL CHANGES AT THE WHIM OF WHOEVER IS IN POWER? I FOR ONE AM VERY WORRIED ABOUT THE TERMS OF MY LOAN BEING CHANGED IN YEARS TO COME, WHEN I WILL BE COMPLETELY OVER A BARREL AND QUITE POSSIBLY A LAUGHING STOCK OF OTHER "WISER" INDIVIDUALS WHO CHOSE NOT TO GO TO UNI.:eek:

Any thoughts on this, Martin? Thanks for your informative website and forums by the way.

Lokolo

The only change thats been made in the 13 years is that post 1998 loans will not go negative should inflation go negative. Apart from that nothing has been changed retrospectively so your worries are a little OTT.

strawberry123

Thanks Lokolo, but my worries are based on the way we have entered times of austerity which could be here for a long while yet. There have been so many changes which make ordinary working people worse off and having now had to accept a retirement age of 66 (will that stay there or creep up I wonder?) and various other changes which were pretty "unthinkable" even a few years ago I'm afraid I don't share your faith in thinking that just because it hasn't got worse over the last 13 years, it can't get worse in the future.

I and several of my fellow students would feel a lot less concerned if signing up with the Student Loans Co. meant we were given a binding contract of the terms and conditions, rather than simply being asked to "hope" the terms don't get worse in future based only on the fact that they haven't in the past!

Taiko

None of the things you mentioned involved signing a contract. In taking out a student loan, you are signing a contract, and those terms are therefore binding.

2sides2everystory

Lokolo wrote: »

... so your worries are a little OTT.

I think that's a rather brave assertion. Would you bet your life on it ? That is what 2012 students are being asked to do.

arsenalbarnie

Strike me down on here if I am wrong but I think in the terms and conditions of the loan it states that you agree to the terms of the loan at the current time and these can be subject to change. The way I interpret that would mean that gives them leeway to change it in the future. I am, like you,worried for the future. Before signing read the T&C s very carefully but like most people if you want to go to uni then like most you will probably have to borrow the money.

melancholly

2sides2everystory wrote: »

I think that's a rather brave assertion. Would you bet your life on it ? That is what 2012 students are being asked to do.

i might not bet 'my life', but i'd take the minuscule risk of T&C changes over deciding not to get a degree if that what was i needed for my chosen career.

strawberry123

melancholly wrote: »

i might not bet 'my life', but i'd take the minuscule risk of T&C changes over deciding not to get a degree if that what was i needed for my chosen career.

I wish I was as much of an optomist as "melancholly" in his/her belief that the risk of T&C changes over the next 30-odd years (the length of time I and my fellow students stand to be affected) is "MINISCULE"!! I'm quite certain that sort of response is exactly the one the government is hoping for!

I wonder if those poor thousands of individuals who have lost small fortunes in their pension pots even thought there was a "miniscule" risk that things would turn out the way the have and will do in the future, when they were being persuaded so effectively by all the financial gurus (including governments) what a good idea it was to invest their hard-earned money in pensions while keeping an eye on their jam-tomorrow-golden-years!

A quick scan through the UCAS website makes it obvious that the vast majority of degrees on offer are not "essential" to do the majority of careers - obviously some vocations such as medicine need several years of specialist training but I don't consider that true of most of what UCAS is offering. I think "going to uni" has just become a way of life for many young people and in many cases it is a waste of time (and vast amounts of money which may become even vaster on the whim of future governments!).

My fears have not been allayed..

2sides2everystory

arsenalbarnie wrote: »

... if you want to go to uni then like most you will probably have to borrow the money.

Do you not mean like most poor English suckers given the short-sightedness of successive governments in the last couple of decades and the current one in particular?

arsenalbarnie

2sides2everystory wrote: »

Do you not mean like most poor English suckers given the short-sightedness of successive governments in the last couple of decades and the current one in particular?

Interpret it how you like. Was only highlighting a particular term in the loan agreement I expect the T&Cs of the loans are the same for the whole of UK.

Oldernotwiser

strawberry123 wrote: »

A quick scan through the UCAS website makes it obvious that the vast majority of degrees on offer are not "essential" to do the majority of careers - obviously some vocations such as medicine need several years of specialist training but I don't consider that true of most of what UCAS is offering. I think "going to uni" has just become a way of life for many young people and in many cases it is a waste of time (and vast amounts of money which may become even vaster on the whim of future governments!).

Most degrees aren't used vocationally and there are many better reasons for going to university than to advance a future career.

If you can find a job with prospects and training at 18, by all means take this route as it can be at least as effective, particularly for someone like you who's not motivated to higher level study. However, these opportunities are few and far between and you may well find that it's a choice between going to university and a dead end job (or none).

I agree with Melancholly that the chances of retrospective changes are small, partly because this has never happened so far, but also because any future changes would affect the graduates who will by that time be in positions of influence. I doubt very much that a government is going to want to put itself in a position where it takes on such a group.