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'A threat to the government on students' £21,000 loan repayment' blog discussion

edited 9 January 2015 at 11:59AM in Martin's Blogs & Appearances & MoneySavingExpert in the News
45 replies 12.8K views
124

Replies

  • ericcthekingericctheking Forumite
    328 Posts
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    Dewpoint wrote: »
    the student agreed to pay it back under the terms of the loan at the time.

    Which is what students are doing as there are thresholds! Which means no payments if under the threshold and the loan written off at a certain age.
    Students might not have taken out the loans without these conditions.

    Don't worry old man I am sure you will be happy when the younger generation take power and remember all your broken promises/ making young people pay for things that used to be free for your generation and the pulling up of the ladder and decide to mess with your pensions (retrospectively of course) and make you sell your property and downsize to pay for your care. :rotfl:
  • edited 14 January 2015 at 4:26PM
    dizziedizzie Forumite
    390 Posts
    edited 14 January 2015 at 4:26PM
    With any other financial product, you enter into a contract based on terms and conditions. The terms and conditions included the repayment structure and threshold at which payment would be made, as well as (from my understanding) an undertaking to raise the threshold in line with earnings from 2017.

    If the government decides that it is going to change the terms and conditions for a student loan contract AFTER a student has already entered that contract.....and after they have already started their course, surely this is a breach of contract! Or, does the government believe that they should be exempt from the fundamentals of contract law?

    Should this happen, I will readily not only protest, but lend my support to any legal challenge. Yes, I think the government made a b*lls of it....but any changes they make to the terms now should be made clear to prospective student loans applicants (and applied to them) only....not to the ones who took out the loans under previously agreed conditions.

    Sometimes I wonder why we pay these numpties so much, when they can't even do basic maths.....
  • dizziedizzie Forumite
    390 Posts
    Dewpoint wrote: »
    No - I think the threshold should be frozen at the level agreed when the student started university. Applying "inflation" is nonsense. Most students will enjoy a steadily growing income after graduation, and it's right they pay back an increasing amount to the British taxpayer who helped them enjoy the added benefits of a university education. It will also make some students think twice about embarking on Mickey-Mouse "degree" courses that only qualifies them for serving French fries at McDonalds after three years!

    To point out your misconceptions Dewpoint, this is what the Government agreed:

    Changes in loan amounts and repayment terms from 2012/13

     An increase in the earnings threshold to £21,000
     A real interest rate of will start to be charged when income is above the earnings threshold reaching a maximum of 3.0% above inflation when earnings reach a new
    higher earnings threshold of £41,000.
     The interest rate will be inflation plus 3.0% for students while they are studying and up to the repayment date (April following graduation)
    Both earnings thresholds will be increased annually in line with earnings
     The length of time before all debts are written off is extended from 25 to 30 years
     Extension of fee loans to part-time students

    Secondly, to allow the threshold to rise in line with earnings is NOT nonsense. In fact, to keep it constant would be nonsense!

    In 1999, average salary was £18396. In 2013, it was £26,000. In 1999, the average house price was £93,000 and in 2013 it was £247,000. A loaf of bread cost half as much in 1999 as it did in 2013. Do I need to continue?

    In fact, if they pegged the threshold at £21,000 for the whole duration of the 30 year loan, towards the end of the term (for those on just over £21,000)....in all likelihood, you'd be taking money from people on minimum wage (since that will continue to rise also over the next 30 years!)

    Now increasing the threshold in line with average earnings is NOT the same as a person progressing their career and earning over and above an inflationary rise each year due to promotion. Under the current system, graduates WILL pay progressively more if they progress in their career and earn more as a result. Don't confuse inflationary wage rises with career progression wage rises!
  • cestinacestina Forumite
    17 Posts
    Seventh Anniversary 10 Posts Combo Breaker
    I am completely with you on this. Any change which works retrospectively is outrageous and once the principle that such changes are acceptable is accepted in one area, it will happen in others such as social security benefits.

    It has to be resisted at the tops of our voices.....
  • I would definitely support a campaign to keep this in the public eye for as long as possible if the government is stupid enough, and it probably is, to go back on its commitments to students.
  • Yep, this would be construed as mis-selling of the highest order, predominantly to the vulnerable. Well done Martin for championing the cause of shafted students, or so some posh boys would like. If they seriously try this on, the protests will be HUGE

    Having such a high profile leader as Martin, of prime-time telly fame no less, who is obviously furious at the way he has himself been mislead, will prove to be the trump card.

    Poll tax memories indeed!
  • I agree with Martin, and would support any protest that he organised.

    I registered for MSE in 2008, and this is the first time that something has annoyed me sufficiently for me to comment - I think it's totally unacceptable. (Disclaimer: I'm not affected personally by this at all, I'm in my 30's and paid off my student loans years ago.)
  • Dewpoint wrote: »
    Most students will enjoy a steadily growing income after graduation
    Nope. Most graduates will struggle to find jobs for which a degree is actually a benefit.
    Dewpoint wrote: »
    and it's right they pay back an increasing amount to the British taxpayer who helped them enjoy the added benefits of a university education.
    Whilst the loan should be paid back (within the terms of any agreement), it would being exceptionally myopic to believe that society as a whole does not benefit from the increased education of individuals (where said eduction is in sensible areas), e.g. doctors, defence staff (about 10 years ago the MOD complained about the lack of physics graduates), civil engineers, etc. There is a cogent argument for the payment of university tuition fees to be shared between the individual and society (probably through the "higher rate" band of income tax), and that the current model is socially harmful, as it dissuades those who should be going from attending university due to cost.
  • Go for it Martin. I will protest with you. I have a son with a First, can't find a job, went to do his Masters, got a Distinction, can't find a job, so currently interning, to get some work experience. (He's working a full working week with a small payment that doesn't cover his travel costs) and now looking like he will do a Phd, at huge expense, (I can't get on my planet of thought), but because he is desperate to feel like he has a place in society. My youngest son is just taking a year out with stress from a top London University and not having value for money with his course or any form of liveable or affordable housing. We are supporting both of them financially and emotionally as well as caring for my elderly, recently widowed father and my vulnerable adult brother, who also get no help because we've worked and paid our taxes all of our lives. I despair of the messages we send to our youngsters - work hard, do your best, get into debt - GET NOTHING! Whilst your at it, we need to protest about internships and value for money at our universities - in every other walk of life this would not be allowed.


    We know and are prepared to pay back the loans, we just want a sense of fairness and it is the principle, something which most politicians see fit to throw to the wind as and when it suits them.
  • tyllwydtyllwyd Forumite
    5.5K Posts
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    The most worrying thing about this blog is that Martin has written it at all. OK, his threat to organise a protest might have some influence on the current government, but student loans are a debt that will probably be paid over 30 years. If in 10 or 15 years time the government decides to make a change, would a similar threat from Martin have any impact on them? Even next year, if we have a change of government, will the new government be worried about breaking promises made by the previous government?
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