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

grizzly1911

howee wrote: »

Do they know it does not effect their credit score or chances of buying a house?

It may not affect their credit score as far as buying a property but it will affect their disposable income and quality of life whilst running it and day to day living, relative to previous arrangements and not going to uni at all.

I take the view that at current rates ~50% of people will be in the same boat (excusing the fortunate few who will have it covered for them). it will therefore become the norm.

CLAPTON

howee wrote: »

Folk never want to pay for anything even if its value for money I am not sure how much the public understand student 'tax's'

Do most of the public know that if a student comes out of work they don't have to pay while being out of work?

Do they know it comes out at source PAYE?

Do they know it does not effect their credit score or chances of buying a house?


EDIT come to think of it most students don't know all this either lol

the student debt or the monthly payments affects how much a lender will advance (have a look at Nationwide's mortgage calculator)

PaulF81

grizzly1911 wrote: »

It may not affect their credit score as far as buying a property but it will affect their disposable income and quality of life whilst running it and day to day living, relative to previous arrangements and not going to uni at all.

I take the view that at current rates ~50% of people will be in the same boat (excusing the fortunate few who will have it covered for them). it will therefore become the norm.

50% of the population wont be going to uni in the future (thank god).

Seeing as the bulls on here for years said "Its not about multiples, its about affordability criteria" I would love to see how a 100K education debt WONT get in the way of your ability to get a mortgage.

posh*spice

CLAPTON wrote: »

interesting to note that the coalition believe (passionatley) that
it's right and fair that a grauate earning over 42k pays marginal deductions of

40% (tax ) + 2% (NI) + 9% student loan i.e. 51%

whereas a person earning a million will almost certainly leave the country and take their skills elsewhere because their marginal rate of tax is

50% (tax) + 2% (NI) = 52%

what a difference 1% makes!

Graduate starting degree before autumn 2012 earning £15,795+ pays 20% (income tax) 13% (NI) 9% SL = 42% (ish)

42% marginal tax on £15,796 !!!!!!!!!!

Same 42% Marginal tax rate for Post 2012 pays same on £21K+


NUTS!

Don't really get why ML thinks this is acceptable?

IveSeenTheLight

ruggedtoast wrote: »

I agree but thats not a popular view around here ime. Especially when it comes to subsidising other people's (which I also dont mind within reason).

Hmmm...
If we take education which needs subsidising, one may debate that they do not have children therefore should not be subsidising education, however : -

• we all had the opportunity to go to school so we are repaying the education we had.
• Educating the country helps to increase the skills and intelligence of the country, arguable enabling better work prospects and the opportunity to contribute more to society.

I'm happy to subsidise education, however I am also a little bit dissapointed in what I am seeing from our education system.
I've seen instances where equipment have not been maintained / repaired because the school maintenance person has been laid off. This then detracts from the opportunity to have practical lessons and rely on theory only.

I'm therefore planning to put my children to private schooling as they provide more breadth of teaching opportunities to the youngsters including reduced class sizes.

I still won't mind contributing to society to fund other children through their education as I think in society we should be providing an education for all.

IveSeenTheLight

PaulF81 wrote: »

Seeing as the bulls on here for years said "Its not about multiples, its about affordability criteria" I would love to see how a 100K education debt WONT get in the way of your ability to get a mortgage.

I think you missunderstand the article.
It's referring to the "True Cost of the Loan Repayment"

It's akin to saying the true cost of a £100k mortgage is £300k

ruggedtoast wrote: »

According to this article in the Independent the true cost of a loan repayment will equal £100k for today's students.


http://www.independent.co.uk/news/education/education-news/revealed-how-the-cost-of-a-degree-is-now-100000-8395989.html

I know students who have taken student loans and what they spent their "debt" on.
I also know students who didn't take on loans and graduated with very little debt.

The article in my opinion is making the point about tuition fees, which to be fair should be considered as additional costs in training.
All of us in adult life need to pay for any "training" we sign up for.
How you manage those costs is up to the individual.

MrShazzyMan

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)

Fair point, but consider the current job market and the chance of getting a decent job that will just about hit above the £21,000 a year as you probably know that students who have started this year only pay back when they're earning over £21,000.

IveSeenTheLight

posh*spice wrote: »

Graduate starting degree before autumn 2012 earning £15,795+ pays 20% (income tax) 13% (NI) 9% SL = 42% (ish)

42% marginal tax on £15,796 !!!!!!!!!!

Same 42% Marginal tax rate for Post 2012 pays same on £21K+


NUTS!

Don't really get why ML thinks this is acceptable?

Erm, am I missing something?

I understand the income tax threshold will increase to £10,000, meaning no ones pays income tax on the first £10,000

National insurance is 12% above £7,592 per year

Student Loans are not payable below £21,000.

Someone earning £15,795 would only pay £1,159 Income Tax, £987.96 NI and £0 on SL.

They'd pay £2,136.96 out of their £15,795 earnings (13.59%)

I've not even started on what benefits they'd be entitled to.

paulmapp8306

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?

Its blatently obvious. Before loans, the poorer students couldnt go to university as they didnt have the money (as there is no way uni can be funded without fees - purly because of the numbers of frankly average students who want to go - fees have to be cahrged). Now they can, by borrowing the money from future earnings made possible by the education.



I still feel the system should be:

1. each year the government with consultation with industry decideds how many, of what type of degrees are needed to fill this countries needs.

2. That number of degrees are offered in the relative subjects free of charge - all charge. Places are gained by merit alone (therefore nullifying the rich being the only ones who can get educated).

3. Other courses will be offered to those who wish to gain a degrees, but are to be paid for at FULL cost (which will be much higher than the £8k per term currently in place). This can be funded by loans, paid back over a decent timeframe, at an interest rate equal to inflation, once a set minimum wage is earned (similar to now).

This way, the country is investing in what in needs - the most suitable and gifted students get to fill the roles that need filling - all other students can either get an apprenticeship, go to work, or get a degree for which they pay the full rate.

I see absolutely nothing wrong with that system - it fills all NEEDS (rather than wants) without class descrimination (which didnt happen pre fees) - yet reduces the overall government funding of higher education, currently given to students who frankly only go to Uni because their friends are, or theres no (apparent) jobs, or just because - without giving any thought to what they want to do with their lives or what the need in the eway of education to make those plans happen.

paulmapp8306

I will add - not bein Uni educated does not make yo dumb. In fact you can larn more from open sources tha n from Uni. all Uni gives you is a bit of paper saying you have achieved a certain level. Id does not mean people who dodnt go to Uni dont have the same - or a greater - level ok knowledge.

the sooner we get away from "scraps of paper" and into "proof on the ground" that you have the knowledge and capabilities to do a job the better.