MSE News: Confusion reigns as student fees fear takes hold

setmefree2

2sides2everystory wrote: »

Are we sure? £120,000 in 20 years time may be equivalent to around £45,000 in today's money, but how much is the first £30,000 paid back worth in today's money and then the first £30,000 etc. worth in today's money? Is a simple comparison like £120,000 in 30 years equates to £45,000 now a valid one?

Excellent point. The way that I see it is that by adding interest at RPI the government is taking care of purchasing parity, so the conversion to £s 30 years from whenever (?) in the Student Loan Calculator is meaningless and misleading. The only way it would be meaningful would be if each £ paid was converted to purchasing parity of a 2012 £ at the point it was paid.

setmefree2

Oldernotwiser wrote: »

A salary of £178K in today's terms would certainly be a ridiculous expectation.

It really isn't.....

Look around you. Look at all the wealth in this country. Do you really think people have all that on earnings of £25k pa or even £50k pa?

setmefree2

@gadgetmind

Given that SLs attract interest at RPI+3% from the getgo would high inflation expectations in the near-term alter your position on paying fees upfront?

thanks

Oldernotwiser

setmefree2 wrote: »

It really isn't.....

Look around you. Look at all the wealth in this country. Do you really think people have all that on earnings of £25k pa or even £50k pa?

Do you think that people with that sort of wealth have it just because they have a degree? Do you really think anything other than a tiny percentage of people earn anything like that amount?

If you're that sort of person, there's nothing wrong with having it as an aim, but as an expectation - never!

(That's in today's terms, of course. With future inflation, we could all be bringing in that amount!)

http://www.thisismoney.co.uk/money/article-1709242/UK-salaries-2010-0-150-highest-salaries.html

http://news.bbc.co.uk/2/hi/uk_news/8604215.stm

lynzpower

Oldernotwiser wrote: »

The question is, though, do all these people need to have a degree?

When non advanced FE was of a better standard, most of the jobs you mention were not graduate professions; that's the scandal.

Well quite.

It depends on the arguments really.

Some of these jobs were not graduate professions however, they were on training contracts with councils, who did pay FE courses on day release plus pay an on the job salary to the staff member.

Arguably the tax payer paid for all of their training: now the individual pays all of their training. Or maybe, in the future they wont.

Personally I would like to go back to those days where councils/ the government/ the NHS etc takes people direct from school/ A levels nad intensively trains them but lets be realistic they are long gone.

setmefree2

jrawle wrote: »

I know some people have prepared spreadsheets and done their own calculations, but I suggest everyone has a play with the site's own calculator at:
http://www.moneysavingexpert.com/students/student-finance-calculator

People should also try the BBC calculator too. I've found that you get a different outcome from MSE. The MSE calculator generally shows you pay back less.

For example using the MSE calculator a student borrowing £43,500 tuition and maintenance starting on £23500 pays back £34,750 under MSE standard assumptions. With the BBC calculator the figure for a teacher borrowing £43500 pays back £58,783.

Big difference.

http://www.bbc.co.uk/news/education-14785676#student_finance_form

jrawle

setmefree2 wrote: »

People should also try the BBC calculator too. I've found that you get a different outcome from MSE. The MSE calculator generally shows you pay back less.

For example using the MSE calculator a student borrowing £43,500 tuition and maintenance starting on £23500 pays back £34,750 under MSE standard assumptions. With the BBC calculator the figure for a teacher borrowing £43500 pays back £58,783.

But you can tweak the parameters of the MSE calculator to get a whole range of outcomes.

Taiko

From what I can gather, ML is doing a live Q&A on this from 4pm today via Twitter. Not confirmed.

setmefree2

jrawle wrote: »

But you can tweak the parameters of the MSE calculator to get a whole range of outcomes.

I like the fact the BBC calculator shows what individuals will be paying each year. So 2 graduate teachers (say) will be paying nearly £7,000 pa in student loans in year 30..... whilst I appreciate this doesn't take into account inflation - that is still a great deal of money. In their mid 30s, when money might be tight due to kids and mortgages, they will be paying £4,500k pa.

Likewise 2 health workers in their mid 30s will pay £10,500k pa (but they will clear their loans at 40 so will be cpmpletely free of SLs in their 40s.)

Oldernotwiser

setmefree2 wrote: »

I like the fact the BBC calculator shows what individuals will be paying each year. So 2 graduate teachers (say) will be paying nearly £7,000 pa in student loans in year 30..... whilst I appreciate this doesn't take into account inflation - that is still a great deal of money. In their mid 30s, when money might be tight due to kids and mortgages, they will be paying £4,500k pa.

Likewise 2 health workers in their mid 30s will pay £10,500k pa (but they will clear their loans at 40 so will be cpmpletely free of SLs in their 40s.)

For someone to be paying back £7,000 pa they would have to be earning nearly £100k and someone repaying £10,500 would be earning nearly £138,000 on today's figures.

Without taking inflation into account, I really can't see the point in coming up with these sorts of figures unless you want to frighten people away.