MSE News: Confusion reigns as student fees fear takes hold

Oldernotwiser

alexlyne wrote: »

I didn't starting paying back my loan until 5 years after I graduated. At that point I owed around 8K. I am still less than halfway through paying it under the current system after nearly 4 years (with above median salary). If the kids are going to graduate with over 30K of debt, and paying a lower amount while interest rates will be higher, then unless your career plan is 'earn 50K', then even people with above average salaries will not pay it all back in 30 years, so it seems pointless to try to pay it back early (unless you're guaranteed that super-high income of course). Whichever way you look at it, students are still so much worse off come next year.
For me, it was repay a loan, or get a house to provide security for myself and my family. Other peoples priorities are different and I respect that. Let's hope that there are plenty of jobs in 2015 though

I agree with what you've written, except for the sentence I've highlighted. As the repayment threshold is going up by £6,000, I really can't see how students will be worst off next year.

jrawle

devildog wrote: »

I believe that many prospective students DO understand the implications of these increased fees, they do understand that you don't start to pay it back until earning over 21K and that it is wiped after 30 years and that if for whatever reason they aren't employed they will not make repayments(unlike a typical loan).

But if you talk to people - and not just prospective students, but their parents, even the most educated ones - they don't understand this, thanks to the way it's been reported in the media. They still talk about can they afford it up-front, being unable to afford repayments, not being able to get a mortgage afterwards.

devildog wrote: »

They are also intelligent enough to know that this is a huge debt that will hang over them for most(if not all) of their working lives.

All of their working lives? If you could let us know which jobs allow retirement by the age of 52, I'm sure many of us would be interested in that one!

gadgetmind

jrawle wrote: »

All of their working lives? If you could let us know which jobs allow retirement by the age of 52, I'm sure many of us would be interested in that one!

Even though not all degrees are 3 years (e.g. 5 for medicine) it would be quite a push to manage to retire before the loan is paid off, but not impossible.

lynzpower

Only half of those who answered (51%) knew the debt is cancelled after 30 years, with 24% believing that once it is taken, it's never wiped.
42% wrongly believe everyone will have to repay at least what they owe, when in fact the amount repaid depends primarily on earnings. Those who never earn over the £21,000 threshold never repay anything.

21,000 is a low salary in some parts of the country ( ie here) it will barely cover your rent.

If you earn less than 21k for a few years, the interest is still accruing.

When you earn 21k you will need to pay it back, with the interest. Hey, you may get to make low payments! Briliant, after all the debt is stil l acruing interest every penny that you do not pay back.

Sucessive governments of course may change this threshold and make it lower nothing is set in stone.

I also am very concerned about the issues around overpayment. Considering all the statements he has made about "the nations credit card" and "paying back the debts you owe" it would be outrageous to not allow unlimited overpayments with no admin fees, charges or other profit-making wheezes.

devildog

jrawle-it has got nothing to do with how it's being reported in the media absolutely anyone (educated or not) can easily look up the info. I believe the main issue is the fact that people do not see the justification in raising the tuition fees to the level that they have and what makes it worse is that those prospective students in places such as Wales and Scotland get away with no such huge increases. Many students know that technically they should be able to get a mortgage but realistically will they be able to afford one!

You also make the assumption that a student will enter Uni at 18 and we all know that some will enter later. I think you are nit picking with points because it does not deter from the fact that for the majority of their working life (like setting up home, raising a family etc) they will have to repay this money and then, let's say it gets wiped, what then, well I guess they had better start saving pretty quickly for their children's education at Uni and maybe manage to put a bit away in a pension before they retire.

And for the record I am one of the un-educated ones, left school at 16 with next to no qualifications and as a 'dunce' I 'get it'.

jrawle

devildog wrote: »

jrawle-it has got nothing to do with how it's being reported in the media absolutely anyone (educated or not) can easily look up the info.

I agree that anyone can look it up. So why don't they? The facts of the article speak for themselves:

Only half of those who answered (51%) knew the debt is cancelled after 30 years, with 24% believing that once it is taken, it's never wiped.
42% wrongly believe everyone will have to repay at least what they owe, when in fact the amount repaid depends primarily on earnings. Those who never earn over the £21,000 threshold never repay anything.

So up to half of students don't understand the new system. If they don't bother to look up how it works, but still worry about "debt" or go out and protest, I'd say they are being influenced by misinformation from somewhere.

devildog wrote: »

You also make the assumption that a student will enter Uni at 18 and we all know that some will enter later. I think you are nit picking with points because it does not deter from the fact that for the majority of their working life (like setting up home, raising a family etc) they will have to repay this money and then, let's say it gets wiped, what then, well I guess they had better start saving pretty quickly for their children's education at Uni and maybe manage to put a bit away in a pension before they retire.

Obviously the bit about retiring at 52 was meant tongue-in-cheek. But why are you assuming that the small monthly payment towards university fees will mean people have no money to save or put towards a pension? Some people spend more money on a mobile phone contract than they'll pay under this scheme. The government are proposing to increase many public sector workers' monthly pension contributions by more than most people would pay towards university fees. In the grand scheme of things, graduate contributions should have little impact on people's ability to put money aside for the future.

And as long as this scheme is still in place, there will be no need for them to save for their own children's education, as their children will just contrubute through the fair and simple scheme after graduation!

Oldernotwiser

jrawle wrote: »

I agree that anyone can look it up. So why don't they? The facts of the article speak for themselves:

So up to half of students don't understand the new system. If they don't bother to look up how it works, but still worry about "debt" or go out and protest, I'd say they are being influenced by misinformation from somewhere.



Obviously the bit about retiring at 52 was meant tongue-in-cheek. But why are you assuming that the small monthly payment towards university fees will mean people have no money to save or put towards a pension? Some people spend more money on a mobile phone contract than they'll pay under this scheme. The government are proposing to increase many public sector workers' monthly pension contributions by more than most people would pay towards university fees. In the grand scheme of things, graduate contributions should have little impact on people's ability to put money aside for the future.

And as long as this scheme is still in place, there will be no need for them to save for their own children's education, as their children will just contrubute through the fair and simple scheme after graduation!

I totally agree. The answers from adults on this thread and others on this board show how little many adults understand about the system, despite them pontificating about it.

anselld

jrawle wrote: »

None of that is relevant when considering whether the new system has been communicated well, which was the point of the article. anselld either hadn't read the article, doesn't understand the system, or both.

As Martin often points out, many people would be very ill-advised to overpay as they are likely to pay more overall than than if they didn't.

I have read it and I understand it perfectly well as, I expect do most prospective Students (despite some of the stats). I just don't like the spin that if we could just get the message across better it isn't so bad a system.

It is a much more expensive system for the vast majority and no amount of communication will change that. Fair enough, I understand people can still afford to go if they want to but many will still look at the cost (however it is dressed up) and decide they don't want to.

gadgetmind

jrawle wrote: »

But why are you assuming that the small monthly payment towards university fees will mean people have no money to save or put towards a pension?

Why are you assuming that 9% of all earnings above a figure that's less than the UK average is small? Some people work hard for degrees that will put them on high starting salaries and a high escalator afterwards. Advising such people to take the expensive loan and sod the consequences wouldn't be helpful.

gadgetmind

anselld wrote: »

no amount of communication will change that.

Yes, that bugs me too.

Students: "This stinks!"
HMG: "That's because you don't understand it. Here, let us explain ..."
Students: "Yes, got it first time, and this is really stinking the country up with a stinky stink."
HMG: "That's because you don't understand it. Here, let us explain ..."
Students: "Hello? Is there a human we can speak to about this?"
HMG: "That's because you don't understand it. Here, let us explain ..."