MSE News: Confusion reigns as student fees fear takes hold

lynzpower

1.) How many prospective students on here think the new system is ok/fair?
2)The people here who state that it is fair/reasonable etc, are they ones that it will not affect at all as in they have already been through/or are currently going through the system or don't have any children that will be going through?
It appears(but could be wrong) that the ones it will affect don't like it, and the ones it will not affect think it is ok.

Not at all

I went through uni the year before fees came in for my undergrad
I am now doing a Msc that I am fully self funding.

I just feel it is the future of this country we really should be investing in. I never thought uni should be free and I thought 3k a year is about right. I thought it was right that they should be on low interest rates, as there is more chance they would be paid back.

Does this put people off going to uni, or even returning to uni? should it? Hell yeah!! 80k debt is just not worth it.

I am deeply worried that in a few years time we will have a massive shortage of the mid-range salary type people, Environmental Health, some aspects of Nursing, planning, statisticians, economics, geographers, psychologists social workers.

We will just have to import people from abroad to do the jobs for us Like we always seem to do. the need for these mid-range type professions will not go away.

Lokolo

lynzpower wrote: »

May be paying it for longer? (

You take out 48k for 3 years. You get a 2:1. You are pleased and so are your parents

But when you graduate, you are dirt poor, there is no money left to borrow and you are broke.

You move home to your parents house. not a huge selection of jobs round there but you get a admin job for 16k your happy with for now.

You stick at that job for 5 years. You dont really have a lot of money once you paid your board and bought your food and paid your taxes and ran your car and paying off your credit cards and overdrafts that supplemented your living costs.

That 48k you borrowed is now 60733.94

Anyway, you move up to another job with the same employer the 20k bracket and stay there for 10 years. Theres nothing else, but its secure.

You still havent paid it off as you dont have to plus you have a partner and a child now, and really need the cash. You still need to run your car, buy groceries and pay taxes all of which has risen hugely over the last 15 years.

You take a look at your statement on your 10 year anniversary in this job and realise the amount you owe is now £86187.88

You are dreading getting promoted, but you need the money somewhere. Prices are rising and you can barely make ends meet.

You get offered a fantastic job a bit further away, exactly what your degree is in!! Finally!!! Yours getting somewhere!! you could be earning £26000.00 in your dream role?

But that would mean payback time :eek:

Do you take the job? Or do you stay earning under 21k forever to avoid the £86187.88 pound debt now hanging over your head?

If you dont, What sort of salaries will employers have to pay to coax excellent graduates out of the under 21k group?

Or is this a 'two-brains' way to bring down all our salaries


All calculation is based on 5.3% for the full termm, which seems to be optmistic.)

Your example makes very little sense. You keep going back to the same old headline debt which is NOT what you should be looking at.

Why would the person not take the job at £26k just because they're over the theshold?! Just because you now owe £86k doesn't mean you're going to have to pay all of it back does it?

Why would anyone NOT want to be earning £26k instead of £20k? It doesn't make ANY financial sense. You don't lose out.

Your example unfortunately is full of floors. For example, you haven't considered that after 15 years, the threshold won't be anywhere near £21k anymore. You haven't taken into consideration wage inflation (yet you took into consideration interest on the loan!) either.

You also didn't mention the fact that after 15 years, you will only have a maximum of 15 years left of owing any sort of student finance.

I really do struggle to see what point you are getting at?

The_One_Who

devildog wrote: »

1.) How many prospective students on here think the new system is ok/fair?

My main problem is that this has been reported awfully (admittedly not helped by the rather vague information available). Especially on some sites *coughherecough*. With pretty much all the media up in arms about it and a lot of scaremongering going on, students will struggle to find a balanced viewpoint. The fact is that universities have no choice but to charge these fees, and that isn't going to change overnight.

And then come in the "it was free x years ago, it was free when the MPs went to university" brigade, spouting that like it makes a difference. It doesn't. The world is a very different place from all those years ago and we need to all acknowledge that. I think we'd all like things to be free, but some of us are more practical than that and realise that not everything can be free all of the time.

Students have absolutely no idea of how much anything like this costs and how much universities subsidise their 'student experience'. There is a great sense of entitlement in this country, which I just don't agree with.

lynzpower

My main problem is that this has been reported awfully (admittedly not helped by the rather vague information available). Especially on some sites *coughherecough*. With pretty much all the media up in arms about it and a lot of scaremongering going on, students will struggle to find a balanced viewpoint. The fact is that universities have no choice but to charge these fees, and that isn't going to change overnight.

I have the same feelings as you about the 'mps had it free' brigade but honestly I think there are plenty of students out there who do understand that a degree is going to cost a lot more and they dont think it is fair.

You would not have seen this for a grand or twos difference.

Protesting students are pig sick of the "you dont understand" message that is being patronizingly shoved at them/us.

Some students have had their courses cancelled midway through a year, losing all the rent they paid with the debt they took out to be told "find another course". Other young people ( regardless of their ability) are being told there is no money for college courses for you.

Many many students are also betrayed Liberal democrats. And they are obviously not going to be too happy.

The_One_Who

lynzpower wrote: »

I have the same feelings as you about the 'mps had it free' brigade but honestly I think there are plenty of students out there who do understand that a degree is going to cost a lot more and they dont think it is fair.

You would not have seen this for a grand or twos difference.

Protesting students are pig sick of the "you dont understand" message that is being patronizingly shoved at them/us.

Some students have had their courses cancelled midway through a year, losing all the rent they paid with the debt they took out to be told "find another course". Other young people ( regardless of their ability) are being told there is no money for college courses for you.

Many many students are also betrayed Liberal democrats. And they are obviously not going to be too happy.

Is it fair that the entrants for one year will pay less than the next? Not really, no. But I learned at a very young age that life isn't fair and that situations change. It's like the financial cut-offs, there will always be someone who loses out with change.

The cancellation of courses is, I feel, a separate (but not entirely unrelated) issue to that of the fees. And if universities have to close due to lack of funding then it won't get any better. Part of my problem with this is that universities are being perceived as being "greedy", but considering their teaching grants have all but been eradicated this is how the government expect them to make up the difference. They have no choice.

As for the voting for the Liberal Democrats, well, more fool them in my opinion! But personal politics aren't the issue here.

Onyourcase

I'm from back in the day when grants + summer jobs got you through university without debt.
Great that today's kids leave school with amazing grades preparing them for the world of work.
Let's go back to when less people went to university and the system was sustainable.

SkyeKnight

Lokolo wrote: »

The loan is hardly expensive. On 30k a year you wil be paying back 810 a year. It will have very little effect on your budgets.

To payback just 65-70 a month to go to university for 3 years is hardly the most exensve decision to make. I do not understand why people still look at the headline debt and get scared, the 99% wont fully pay it back so why dont people just look at it as a tax?

The fact is the older loans are worse in terms of repayment which is the biggest factor of the loans, the headline debt is largely insignificant.

I've read that around 40-50% of people will end up paying back all their loan - way more than the 1% you suggest. Less than a quarter of people will be better off under the new loans system.

And also I disagree with saying the loan is hardly expensive - it may look small when you look at a monthly payment but it adds up over the years to tens of thousands of pounds. That is money that won't be paid off your mortgage or paid into your pension and will leave you considerably worse off.

Finally, the £21k a year threshold is a salary in the year 2016 not for this year. By then it will be worth considerably less - and certainly less than the £15k a year threshold was when it was set several years ago, though it does at least go up by inflation from 2016 onwards. It probably won't be much more than minimum wage.

Not to say that the new loan payments/tax are awful. It's definitely got many plus points over a bank loan, but overall it's worse for students than the old system.

poppy10_2

Lokolo wrote: »

You keep going back to the same old headline debt which is NOT what you should be looking at.

Why not?

It's sad to see people like Martin Lewis promoting the new fee system as being somehow better just because the monthly payments will be lower. It's raising a generation of people to not worry about the staggering amount of debt they owe, or the crippling interest they are accruing (RPI + 3% = 8.6% on current rates) and instead just concentrate on the short-term picture.

To paraphrase Martin's credit card article:

MSE_Martin wrote:

The aim of borrowers is (or at least should be) diametrically opposed to that of [loan] companies. We need to repay debt as quickly and cheaply as possible; they want to keep us perpetually repaying our debt and earning them interest. [Low] repayments are designed to do just that. Borrow £3,000 at age 21 and you'd be 50 before it was clear... their evil genius can lock you in perpetual debt.

I'm not suggesting the student loan system is comparable to credit cards, but the surely the same general principles towards debt still apply?

Taiko

SkyeKnight wrote: »

I've read that around 40-50% of people will end up paying back all their loan - way more than the 1% you suggest. Less than a quarter of people will be better off under the new loans system.

And also I disagree with saying the loan is hardly expensive - it may look small when you look at a monthly payment but it adds up over the years to tens of thousands of pounds. That is money that won't be paid off your mortgage or paid into your pension and will leave you considerably worse off.

Finally, the £21k a year threshold is a salary in the year 2016 not for this year. By then it will be worth considerably less - and certainly less than the £15k a year threshold was when it was set several years ago, though it does at least go up by inflation from 2016 onwards. It probably won't be much more than minimum wage.

Not to say that the new loan payments/tax are awful. It's definitely got many plus points over a bank loan, but overall it's worse for students than the old system.

So where are you getting your figures from?

dkmax_2

jrawle wrote: »

As other people have commented, if someone is incapable of understanding the new student finance scheme, are they really bright enough to go to university?

No, although some might argue that 'arts' students can be forgiven such lack of capacity.

University education has to be paid for by someone - if we want an expanded system with a 40+% intake, it makes most sense to charge those that receive it. Should we go back to the era of 20% participation then an argument for payment from general taxation might be sustainable as the hairdressing degrees and their ilk would soon be weeded out and some value for money obtained.

I paid for two degrees from my own funds while working, one FT, one PT and I don't see why I should have to contribute to someone else's now too.