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'Student loans aren't a debt – change the name to avert a...' blog discussion
in Martin's blogs & appearances & MoneySavingExpert in the news
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Former_MSE_Helen Former MSE
This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.
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Read Martin's "Student loans aren't a debt – change the name to avert a national tragedy" Blog.
Please click 'post reply' to discuss below.
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The fact of the matter is that this loan IS a debt. Yes, it has some pretty unique repayment options (only repay if you earn enough, debt written off after 30 years) but the fact remains that is IS debt, nothing more.
The spin in this article is highly disappointing coming from Martin, of whom I expected better.
The student loan IS a debt. Spin does not make the debt go away.
The more sensible option is to scrap the whole thing, go back to grants, and realise that the investment is amply repaid over the graduate's lifetime in the form of higher taxation paid as a result of them earning a higher salary through their degree.
All the student loan does is land people with massive debt upon graduation, and cost far too much money to administer.
I agree regarding spin, but have to take issue with the above. Previous governments have tried to encourage as many people as possible to go to Uni to get degrees because they think that will lead to higher salaries and higher taxes paid. The thing is that there's only so many jobs for people with degrees, and now people with degrees are having trouble getting the jobs that 5-10 years ago would not have needed a degree at all.
Part of the intent of the new student loan is to make people think about whether they really need that degree, or if they'd be better off going out and getting a job. We want less people to have degrees, so that those that do have them are valued more.
tl;dr: if everyone has a degree, then it has no value.
Either we carried on with grants and have to increase general tax for everyone - including those who didn't go to university or who had parental support. Or we have this contribution system where those who benefit most, contribute the most.
Ultimately it boils down to the politicians dilemma. It is easy to make promises to the current electorate (cutting taxes, increasing higher education places) until you realise you have created a enormous bill to be picked up by a future generation.
What this country really needs is a set of principles in some sort of constitution that prevent politicians from making these kind of unfunded promises that get them elected but lead to recessions and cuts in future years or charges for services that were previously free.
I'm a Thatcherite, and a nit-picker, but I fully agree with Martin on this one.
(plus the education system is failing them?)
It appears to me that for the last 20 years the Government has had this stupid policy of allowing British jobs to go overseas to places such as India and China. In order to prevent embarrassing unemployment figures the Government just tells people to stay at school for as long as possible. So in response for the last 20 years the Government has been telling people to go to university. When I have been to job interviews and tell employers I have a degree they do not seem interested. The Government is using Universities to train people up for jobs that simply do not exist. It is a waste of UK taxpayers and students money.
I feel that I have wasted my time and my money doing a degree. Young people such as myself have been sold a pup. There are several stories in the media of those who have completed a university degree and are working in pubs, bars supermarkets etc because there are no jobs requiring the degree they have completed. This University thing that the Government is peddling is the biggest red herring ever. The best thing the Government could do is spend taxpayer funds on training people up for jobs that actually exist and also work on bringing the jobs back to Great Britain that have been outsourced overseas. The problem we have isn't a shortage of graduates but a shortage of jobs. When are the Government going to get their act together ?
Martin's blog states that you only start to repay the loan when you are earning over £21,000.00. Since when was £21K a big wage! I would have thought you shouldn't have to repay anything until you are earning at least £30,000.00. That would be far more sensible. I also think that it is a high rate of tax to be paying 20% + 9% = 29% income tax with NI on top.
It is irrelevant what this debt is called just focus on what I have outlined above to get things moving in the right direction. Question is when are the politicians going to wake up and get on with it ?
I can bear pain myself, he said softly, but I couldna bear yours. That would take more strength than I have -
Diana Gabaldon, Outlander
Perhaps it's in the interests of university governors, of which Martin Lewis is one, to encourage people to attend university, whatever the cost to the students may be.