MSE News: 'We need war against student fee confusion'

wozearly

anselld wrote: »

I don't think it is difficult at all. The vast majority of students go to uni with the intent of getting a decent job after and therefore paying off the loan eventually.

It is absolutely clear they are much worse off in the long run.

That would be true, if the majority ended up paying the loan off. Statistically speaking they won't. That means the headline figure of the loan becomes much less relevant than it used to be, and salary much more important.

That makes direct comparisons more tricky - its not straightforward to reliably predict your salary over a 30 year time span before you've actually started work.

Its probably a moot point, because if we're talking in general then I agree with you. The new system is designed to make graduates pay more overall (albeit with weighting so that higher earners pay a lot more and lower earners get a slightly better deal).

Is it a worse deal / potentially worse deal for most graduates than the previous system. Yes.

Is it bad deal? I don't think so - certainly not if your degree is a key factor in getting that above-average salary job. Its just less of a good deal than it was before (which has been the theme of every student loan change in the past 15 years).

Lokolo

setmefree2 wrote: »

£810 for 30 years is not nothing. One day you will learn this (but only when you leave the comfort of your Mum's house and start fending for yourself )...... It is £24,300 (and that's only if you never, ever get a pay rise......)

I didn't say it's nothing, I said its minimal and will not have a great impact on anyones finances.

I suspect over a similar period, more would be spent on chocolate and ex partners and not be more satisfying than university experience.

Lokolo

wozearly wrote: »

Is it a worse deal / potentially worse deal for most graduates than the previous system. Yes.

Is it bad deal? I don't think so - certainly not if your degree is a key factor in getting that above-average salary job. Its just less of a good deal than it was before (which has been the theme of every student loan change in the past 15 years).

Those are my exact feelings also.

wozearly

setmefree2 wrote: »

£810 for 30 years is not nothing. One day you will learn this (but only when you leave the comfort of your Mum's house and start fending for yourself )...... It is £24,300 (and that's only if you never, ever get a pay rise......)

£810 per year for 30 years is substantial - but Lokolo has a good point if you look at the flip side of this.

For the sake of simplicity lets assume that all taxes on salary are 20% for the 30 year period.

That means on the new system the £30,000 earner brings in £24,000 per year after tax, and £23,190 after student loans. After 30 years that's £695,700.


Lets say they didn't do a degree, and so only managed to get to a job paying £25,000. That's £20,000 after tax, no student loan deduction. After 30 years that's £600,000.

£95,700 greater earnings in favour of the graduate more than offsets the £23,400 not gained during that time.

Even after graduate tax repayments, the graduate is better off if their degree means they can command more in salary than they repay compared to their peers who did not take degrees.

Prospects' analysis of the Labour Force Survey run by the government seems to suggest graduates earn on average about 26% more than higher education (non-degree) holders and 36% more than people having A-Levels only across 21-34 year olds.

The average annual salary for a graduate in that age range was about £26,400. Their student loan repayments would be less than 2% of their total salary.

flimsier

wozearly wrote: »

On that note, where do you recommend that your students get information on student finance? Or is it a case of "look at everything, but beware of bias"?

I don't really "teach" students on student finance as I teach in an 11-16 institution, though there are a large number of students who come back to us for advice once they've left. I did have about 50 Year 10 students attend the rock concern ML spoke at.

The approach in Citizenship or History is the trust sources when they are triangulated, but also be aware of the provenance of the message. So reading about cannabis from a group that campaigns for it to be legalised means that you should think about why they are saying that.

The year 10 students I spoke to spoke at length about being aware that ML's message was coming from the government, who have a vested interest in making it appear that the new arrangements for student fees are at least "as good" as they were before (and they don't really grasp "before" anyway as it didn't affect them). They conclude that ML is the government's way of making the new system seem "OK". The balance of his message at the rock concert was, according to them "it's a bit better in some areas and a bit worse in others so we shouldn't worry about it" - and they heard that from the horses mouth.

setmefree2

wozearly wrote: »

£810 per year for 30 years is substantial - but Lokolo has a good point if you look at the flip side of this.

The £810 was just some random figure Lokolo plucked out of nowhere and is pretty meaningless, except that Lokolo thinks that £810 * 30 is a mere bagatelle....

wozearly

flimsier wrote: »

The year 10 students I spoke to spoke at length about being aware that ML's message was coming from the government, who have a vested interest in making it appear that the new arrangements for student fees are at least "as good" as they were before (and they don't really grasp "before" anyway as it didn't affect them). They conclude that ML is the government's way of making the new system seem "OK". The balance of his message at the rock concert was, according to them "it's a bit better in some areas and a bit worse in others so we shouldn't worry about it" - and they heard that from the horses mouth.

Ouch...

Well, if there is a government agenda to make Martin Lewis the acceptable celebrity-endorsed face of explaining the student loan system, or if the task force is being 'encouraged' by the government in some way to be on-message about the loans, then your students were highly perceptive to conclude that.

I think its more likely that there would be university influence from the task force, although its hard to see how they would realistically steer Martin in something he was actually doing live, by himself, short of writing or vetting what he was going to say.

Anyway, I digress...

I wonder if the cynical reaction (to something that I presume Martin did with honest intentions and their best interests at heart) is linked to the bad press surrounding the new approach. It wouldn't surprise me if the general feeling that its a bad thing for students has sunk in - what with graduates probably paying more, the political sniping between parties, the public condemnation of the Lib Dems for "betraying students" over the issue...

I wonder if anyone who'd addressed that concert saying that the new system has good points as well as bad and isn't really something to worry about would have been tainted by association, seen as part of the government's propaganda drive and considered untrustworthy?

SpottedLeopard_2

What I find staggering is propsed penalisation of those who wish to repay their debt early being dressed up as a 'progressive mechanism', when it is actually anything but.... (see below website without spaces)

discuss. bis. gov. uk /hereform /early-repayment/

Lokolo

setmefree2 wrote: »

The £810 was just some random figure Lokolo plucked out of nowhere and is pretty meaningless, except that Lokolo thinks that £810 * 30 is a mere bagatelle....

It's not random, someone said from £20k to £30k are worse off and paying a 60% effective tax rate which was completely incorrect. Which is why I then gave an example of £30k and what their actual effective tax rate was.

The £810 is what a person on £30k would pay back in student loan payments a year.

And if you think £810 * 30 is such a huge amount - why the hell did you get a mortgage? What interest have you paid over the past 20 years on that? Why did you do it? Because it was worth it. And as explained above, it is worth it and not a waste of money, and its not a lot of money.

wozearly

setmefree2 wrote: »

The £810 was just some random figure Lokolo plucked out of nowhere and is pretty meaningless, except that Lokolo thinks that £810 * 30 is a mere bagatelle....

£810 is the annual repayment that a graduate earning £30,000 per year would make, which is why I used £30,000 in my example.