Student Loans : That's Another Fine Mess you've Gotten us into

CLAPTON

chewmylegoff wrote: »

Probably get someone like capita to bid billions then the govt signs without reading the contract and suddenly finds that it is on the hook for all sorts of admin charges and clawbacks and ultimately a bail out. Net loss to the tax payer of £4.2 billion, I predict.

Having read 'outsourcing type' contracts I can tell you that one needs to be an expert

the public sector didn't /doesn't have those people.

most of the PFI contracts were probably managed by clever people but who had never negotiated just a contract before.

Also they were probably under a lot of pressure to sign as the alternative was no government capital.
So new hospital or no new hospital; what should they choose?

N1AK

grizzly1911 wrote: »

All graduates are unlikely to find well paid jobs and which suggests we are over supplying at a cost that cannot be afforded.

Or just been honest about it and called it a graduate tax that applied to all graduates across the board.

I don't accept the first premise. If the issue is that we don't have enough jobs for graduate level employees then that is the issue we should be resolving not simply trying to have fewer well educated employees in future.

If by across the board you meant to people who attained degrees in this country (including in the past) would be paying a grad tax then I'd consider it, although it'll never happen. If they did bring in a grad tax it would only be on new graduates, which is exactly the issue I have.

grizzly1911

N1AK wrote: »

I don't accept the first premise. If the issue is that we don't have enough jobs for graduate level employees then that is the issue we should be resolving not simply trying to have fewer well educated employees in future.

If by across the board you meant to people who attained degrees in this country (including in the past) would be paying a grad tax then I'd consider it, although it'll never happen. If they did bring in a grad tax it would only be on new graduates, which is exactly the issue I have.

It would be great if we could create enough careers that benefited form graduates but that isn't happening and is unlikely to happen in the short to mid term. Are all these graduates really necessary, is having that badge the best and only way forward.

I don't know how feasible a tax on past graduates would be but wouldn't rule out some form of tapered taxation for historic graduates.

Instead of taking 9% above a certain figure, which is a graduate tax in all but name, that many will not pay in anything like sizeable volumes, then wouldn't say 3% surcharge (example) across the board (all income over personal allowance) for all graduates, even unearned income, be viable? At the same time removing the debt hangover?

kabayiri

There will always be several different ways to solve a problem ; in this case the need for larger numbers of better educated people in our society.

One is based on borrowing into the future through loans, which we pretty much have.

Another option is to re-examine the entire higher education system and look at innovative ways of reducing cost. We have been innovative before, pioneering the OU for example.

I know plenty of people who are not ready to make career defining choices at the age of 18/19. Doing a make weight course isn't really helping anyone.

Perhaps we need more diversity in our education system, including high tech distance learning courses, and shorter bootcamp style intensive education courses?

If students are now education consumers they deserve a bit of choice.

olly300

chewmylegoff wrote: »

Instead of arsing about with the loans system the govt should simply just ration the funding so that if you don't get more than BBB at a level or whatever Mickey Mouse qualifications sixth formers take these days you don't get access to the government funding system for higher education. They should also restrict funding to degrees that are actually useful to the economy.

I houseshared with someone who studied Drama at university.

Some of her work has involved making popular British programs work in other countries by working for small UK production companies abroad.



There as I know someone who did a Maths degree. She has a wealthy husband and is now a stay at home mother.

If you are looking at it with your prejudices without knowing the impact each woman has on the economy you would presume the Drama degree is of no benefit to the UK economy but the Maths one is, when actually currently it's the Drama degree which is most beneficial economically.

On the Drama degree my mate spent 90% most her time working behind the scenes to gain the initial skills she has used in her career. We actually didn't see her for months at a time because she was involved in productions so was going early and coming in late.

olly300

CLAPTON wrote: »

Having read 'outsourcing type' contracts I can tell you that one needs to be an expert

the public sector didn't /doesn't have those people.


most of the PFI contracts were probably managed by clever people but who had never negotiated just a contract before.

The public sector has lawyers.

They also like private sector organisations have staff who have experience in dealing with different aspects who don't all say "it's not my job".

However from my experience instead of these contract negotiators asking what a particular term or phrase means they pretend they know it.

This means anyone dealing with the contract after them has to try and mop up the mess they have left to get something done let alone get it done on time. (One of the reasons some of the staff don't just say "it's not my job".)

N1AK

grizzly1911 wrote: »

Instead of taking 9% above a certain figure, which is a graduate tax in all but name, that many will not pay in anything like sizeable volumes, then wouldn't say 3% surcharge (example) across the board (all income over personal allowance) for all graduates, even unearned income, be viable? At the same time removing the debt hangover?

It would have to be higher than 3% if you actually wanted to increase the amount paid. I think I'd actually be paying less on that basis than I am currently...

The theory behind the 9% above a threshold system is that someone earning £13k would struggle if they had to pay £650 (5% of all pay) in loan repayments, however someone earning £50k can easily afford to pay back £2600pa (9% above £21k).

Perhaps they could slightly lower the threshold (but keep repayment the same) if they wanted to raise more money from students but I'm not sure that means they should

grizzly1911

N1AK wrote: »

It would have to be higher than 3% if you actually wanted to increase the amount paid. I think I'd actually be paying less on that basis than I am currently...

The theory behind the 9% above a threshold system is that someone earning £13k would struggle if they had to pay £650 (5% of all pay) in loan repayments, however someone earning £50k can easily afford to pay back £2600pa (9% above £21k).

Perhaps they could slightly lower the threshold (but keep repayment the same) if they wanted to raise more money from students but I'm not sure that means they should

If vast swathes (hyperbole) of graduates aren't going to reach the threshold, potentially, 9% of nothing isn't going to contribute anything. 3% (example) above personal allowance would at least make a contribution. May also dissuade those who are along for the ride rather than serious endeavour.

If you have to live in a high cost zone to achieve £50K may not make 9% any more affordable in reality.

lvader

So now the system is too generous? :-) compaired to when? I agree the goverment will end up with a large bill, so what changes? Not a lot!

MacMickster

Students were never intended to repay a penny of these loans.

Take a student who graduates having taken £50K of loans over a 3 year course. Interest on the loan accrues at RPI plus 3%, so likely to be at least 5.5%, or £2,750 per annum.

If the graduate was to walk straight into a job paying a £50K salary (unlikely), they would repay 9% of their earnings over £21K, so repayments of £2,610 in a year.

On a £50K salary from the outset, the graduate would not even repay the accruing interest, never mind making a dent on the capital. The whole student loan scheme is nothing to do with loans that are expected to be repaid, and absolutely everything to do with introducing an additional graduate tax.

Of course, perversely, this means that it is likely to be cheaper for UK firms to employ overseas graduates, who will not have to pay that graduate tax. You would have to pay the UK graduate £53K for them to come out with the same net salary as an overseas graduate earning only £50K. On the other hand, our best graduates can avoid this tax by taking their talents overseas.