Student loan repayments 'may not meet government costs'

grizzly1911

"Official estimates of the cost of unpaid student loans suggest they could eventually cancel out most of the money raised by tripling tuition fees.

The government now believes that 45% of university graduates will not earn enough to repay their loans.

That is close to the 48.6% threshold at which experts calculate more money will be lost by the government than is gained from having increased fees."

http://www.bbc.co.uk/news/education-26688018

What a surprise.....

Running_Horse

That is crazy if true. The number of junior jobs now demanding a degree is staggering. There should be fewer universities, more apprenticeships, and just accept the thickos and unemployed should be doing the jobs we currently sub out to immigrants.

CLAPTON

as mentioned several times previously

to index link the pre 2012 repayment threshold of 15,000
and to create a new threshold of 21,000 for the post 2012 loans was complete incompetence

wymondham

So if 45% of those attending will not earn enough to pay back the loan this must mean they have gone to University to fill time and not to get the holy grail grades to get that top job???


It's not surprising is it really...

Lokolo

wymondham wrote: »

So if 45% of those attending will not earn enough to pay back the loan this must mean they have gone to University to fill time and not to get the holy grail grades to get that top job???


It's not surprising is it really...

But not everyone goes to university to get the top paying job. Some people go because its part of the career they want, such as teaching.

michaels

Surely the education is not costing any more so it is just about whether it is paid for out of 'loan repayemtns' = graduate tax or general taxation as was previously the case, there is no extra govt expenditure it is just a matter of which group of taxpayers pays. the fact that a lot of the burden remains with general taxpayers means it is less regressive than the alternative where low income graduates pay more.

CLAPTON

michaels wrote: »

Surely the education is not costing any more so it is just about whether it is paid for out of 'loan repayemtns' = graduate tax or general taxation as was previously the case, there is no extra govt expenditure it is just a matter of which group of taxpayers pays. the fact that a lot of the burden remains with general taxpayers means it is less regressive than the alternative where low income graduates pay more.

very true
the essential costs are largely unchanged whether the taxpayers funds them or the beneficiaries fund then (except for the admin costs)

but it would be interesting to know why the arithmetic was so wrong about something that doesn't seem very difficult to determine.
doesn't inspire any confidence in costing for HS2 or our future energy infrastructure

GeorgeHowell

The whole thing was never costed out in any meaningful way. It started with the ideological, anti-elitist desire by New Labour to put 40%+ through higher education. The coalition has half-heartedly tried to cap the liability to the public purse, in the face huge opposition.

grizzly1911

Lokolo wrote: »

But not everyone goes to university to get the top paying job. Some people go because its part of the career they want, such as teaching.

Teaching is a reasonably paid career, with potential for advancement and reasonable levels of pay improvement.

Many successful individuals haven't been through university.

Having a degree doesn't mean you will be any more effective, in a complex work environment, than you would have been without it, for many everyday roles.

Arguably many of those that have still couldn't and can't see the wood for the trees and have created the problems we have now.

grizzly1911

michaels wrote: »

Surely the education is not costing any more so it is just about whether it is paid for out of 'loan repayemtns' = graduate tax or general taxation as was previously the case, there is no extra govt expenditure it is just a matter of which group of taxpayers pays. the fact that a lot of the burden remains with general taxpayers means it is less regressive than the alternative where low income graduates pay more.

The cost has increased because the volume has gone up.

Government should be honest and acknowledge we cannot afford the volume of education that has been created through want rather than need. Will the jobs market significantly change over the years to need so many graduates? Graduates may be wanted but there will be insufficient income uplift as a nation or individually to justify them. Many roles and professions could be met by on the job sandwich qualification.

If they insist on driving the volume then it needs to be paid for.

They should have been honest and introduced a graduate tax. Payable by all graduates on their taxable income with a increment at the differential income tax points and any additional post grad uni qualification.

Nothing has been done to reduce the cost of degrees such as condensing elapsed time. Arguably it has increased do to the administrative burden.

The current scheme and volume is nominally indebting students to keep many "university" cities and towns afloat.

A valuable export commodity if it can be paid for.

michaels

Although it seem slike a real dogs dinner what we have now is a graduate tax but capped so that the total amount payable is not hugely more than the actual cost of the education received (which seems fair to me, otherwsie those with the best prospects would be better off opting out and borrowing the money commercially/BOMAD) and thos egraduates who never earn a lot end up with the debt written off - so fair and progressive, it just appears to be a dogs dinner....

Of course the proportion of th epopulation who should be going through higher education, that is another question, any suggestions on what the best way to ration this to the level that makes economic sense? IN the US where it is strictly privately funded there is much more innovation in terms of course length, part time courses etc. I don't see why we can't have 12/18 month nursing fouundation or accounting technician courses that would give entry to certain jobs without requiring a full 3/4 year degree.