£100,000 of student loan debt. Young crippled by debt burden

ruggedtoast

Lokolo wrote: »

In a very high level I see a few benefits and couple of downsides to university tution fees and loans.

Advantages

- It claws back some of the costs to the government for university education (in the past, those that went to university would most likely get higher pay and therefore pay more tax, making it viable. With the numbers now going to university, not sure this can happen).

- It enables poorer students, who may not be able to afford university any other way, to go.

- It forces students to learn about money, something which is severely lacking in this country

Disadvantages

- Those who screw about after university, don't get a job where a degree is required, have cost the tax payer money (although I suppose the same could be sent pre tution fees and loans)

- The interest now charged is not very nice

And the repayment terms I think are fair.

Charging tuition fees enables poor students to go to university.

You heard it here first...

Lokolo

ruggedtoast wrote: »

Charging tuition fees enables poor students to go to university.

You heard it here first...

I did say tuition fees and loans... I thought it would be obvious which one I am referring to, but I guess the less intelligent may need me to make it obvious. Would you like me to?

Idiophreak

CLAPTON wrote: »

It used to be the case that 40,492 divided by 30 (years) was about 1,350.
I'm not sure why repaying such a sum per year is considered crazy. (and yes I know interest will be added which will add a little to the total)

Actually, it will add a lot to the total. That's kinda the point.

When I was paying back my loan (9k, around the smallest you could be given at the time), although you "started paying" your loan at £15k, you only "started paying *capital*" at something like £23k...

I imagine, with a £40k debt, people are going to have to be earning well upwards of £30k to cover their interest payments each month, before they even start on the capital. Wait for the interest rate to rise a couple of percent, then think about your "interest will add a little to the total"....

The interest paid can be reduced, of course, by paying more each month....But the government keep on increasing the amount you can earn before paying - meaning the amount you pay each month keeps reducing, meaning the amount of interest you pay keeps increasing - and the SLC are notorious for making it hard work to manage your loan in any kind of sensible manner - don't think that's an accident.

Lokolo

Idiophreak wrote: »

Actually, it will add a lot to the total. That's kinda the point.

When I was paying back my loan (9k, around the smallest you could be given at the time), although you "started paying" your loan at £15k, you only "started paying *capital*" at something like £23k...

I imagine, with a £40k debt, people are going to have to be earning well upwards of £30k to cover their interest payments each month, before they even start on the capital. Wait for the interest rate to rise a couple of percent, then think about your "interest will add a little to the total"....

The interest paid can be reduced, of course, by paying more each month....But the government keep on increasing the amount you can earn before paying - meaning the amount you pay each month keeps reducing, meaning the amount of interest you pay keeps increasing - and the SLC are notorious for making it hard work to manage your loan in any kind of sensible manner - don't think that's an accident.

Yes but your pay should "increase" over time with inflation, so the amount you pay back, although will vary, shouldn't keep reducing year on year in the longterm, even though the threshold increases.

ruggedtoast

Lokolo wrote: »

I did say tuition fees and loans... I thought it would be obvious which one I am referring to, but I guess the less intelligent may need me to make it obvious. Would you like me to?

They are providing loans because they are charging tuition fees.

Why do you think this is suddenly enabling poorer people to educate themselves?

You appear to be hopelessly confused by tuition fees, which didn't used to be charged, and living expenses, which used to be a combination of a loan and a grant.

Nothing about the new regime is encouraging anyone from a mid to low income background to go anywhere other than the benefits office.

Idiophreak

Lokolo wrote: »

Yes but your pay should "increase" over time with inflation, so the amount you pay back, although will vary, shouldn't keep reducing year on year in the longterm, even though the threshold increases.

I don't believe the threshold increase ever effects existing loans - only new ones. My point was just that the government makes it sound like they're doing people a favour..."good news: now you don't start paying until you earn even more..." - but it's not really doing anyone a favour, it's just increasing the amount of interest they're going to pay.

Lokolo

Idiophreak wrote: »

I don't believe the threshold increase ever effects existing loans - only new ones. My point was just that the government makes it sound like they're doing people a favour..."good news: now you don't start paying until you earn even more..." - but it's not really doing anyone a favour, it's just increasing the amount of interest they're going to pay.

It is being retrospectively changed for old style. The £15k threshold is rising to the £21k threshold then rising each year at "a rate of inflation".

Lokolo

ruggedtoast wrote: »

They are providing loans because they are charging tuition fees.

Why do you think this is suddenly enabling poorer people to educate themselves?

They charge tuition fees because the government cannot afford to numbers going to university at their current levels.

The loans then enable everyone access to university and not limiting those who can afford to high fees.

You appear to be hopelessly confused by tuition fees, which didn't used to be charged, and living expenses, which used to be a combination of a loan and a grant.

Nothing about the new regime is encouraging anyone from a mid to low income background to go anywhere other than the benefits office.

I am not at all confused, you just think I am talking about tuition fees only.

I am not talking about only the fees, I am talking about tution fee loans as well. I have explained in my previous posts about why tuition fees are coming and why loans are also there.

Idiophreak

Lokolo wrote: »

It is being retrospectively changed for old style. The £15k threshold is rising to the £21k threshold then rising each year at "a rate of inflation".

Really? Oh my...

Idiophreak

Lokolo wrote: »

They charge tuition fees because the government cannot afford to numbers going to university at their current levels.

I don't think that's really the case. When you look at the cost of universities relative to other government outgoings...pensions, housing benefit, NHS, judicial system...it's really a tiny cost for the government, so it's not the case that they couldn't afford it (well, that they could afford it any less than all the other things they can't afford, anyway ) - they just decided it was a way to raise revenue.

University used to be a public service. Now you pay for it...Sooner or later, the government will work out that they could just as easily charge every time you call the police, every time you claim a benefit...they've worked ambulance fees and ever-increasing prescription costs into the NHS already.

Personally, I'd prefer they were upfront about their spending issues and just increased PAYE a couple of percent, stopped with all this stealth and left our services as just that - services.