MSE News: Summer Budget 2015: Student grant and loan system faces overhaul

edited 30 November -1 at 1:00AM in Student Money Saving
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Former_MSE_HelenFormer_MSE_Helen
2.4K Posts
edited 30 November -1 at 1:00AM in Student Money Saving
University maintenance grants are to be scrapped and replaced with an enlarged maintenance loan, Osborne has announced...
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Summer Budget 2015: Student grant and loan system faces overhaul

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  • nodiscountnodiscount Forumite
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    I have mixed feelings about this. I know kids living at home who use their grants for spending sprees and cars etc but then again, poor students who can't rely on bank of mum and dad may be put off from further study.
    I think they should have reduced the amount not scrapped it completely.
  • PlusPlus Forumite
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    The danger of piling more 'debt' into a pot with the student's name on it is it then becomes very tempting for future governments to play games with it.

    A grant does not need to be repaid, so that's water under the bridge once you graduate. A loan, on the other hand, is something the government can sell on or mess about with the terms - for example jacking up the rate or changing the conditions. Which leaves the potential 'borrower' at risk if a future government decides to throw its weight around.

    If they were a bank they wouldn't be able to do that, but the government can legislate however it likes to change the conditions and there's nothing loan-holders can do about it. Governments love messing with pensions, for example, so it wouldn't be surprising if at some point they mess with pre-existing student loans.
  • alibean121alibean121 Forumite
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    Meh, I mean most modern student loans are already at a level where they'll never be paid back so what difference does it really make...

    Not sure how they think it's going to save money though. If they're offering more money in total (loan or grant) it seems clear it will be more expensive again considering likelihood of full repayment.
  • Ed-1Ed-1 Forumite
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    alibean121 wrote: »
    Meh, I mean most modern student loans are already at a level where they'll never be paid back so what difference does it really make...

    Not sure how they think it's going to save money though. If they're offering more money in total (loan or grant) it seems clear it will be more expensive again considering likelihood of full repayment.

    That's the point - it takes the spending off today's balance sheets (so contributing to cutting the deficit). It's classic kicking the can into the long grass. It's no longer public spending today, but it will be public spending in 30 years time when the loans get written off.
  • [Deleted User][Deleted User] Forumite
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    I will be going to uni in september to study mental health nursing. My course is very full time with only 7 week off a year and placements which I won't get paid for at 37.5 hours a week. All this and I will get less than a student studying a purely academic degree who will only be in uni 3 days a week and gets 3 months off for the summer so has ample time to work part time. I really think the government needs to look at how nursing students are funded.
  • TaikoTaiko Forumite
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    They will, and you then won't get your fees paid for by the NHS.
  • agarnettagarnett
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    We have a cowardly government.

    The suggestion to any student, let alone the masses, that they will never pay off their university education loans has always been a ridiculous message to those who will expand their minds at university, and also to those who won't.

    The unwritten message is threefold:
    1. To those who are smart enough to be able to expand their minds whilst at university - your country doesn't believe in higher education. It doesn't believe in you either. However, it believes that if you want it, you pay through the nose for it.
    2. To those who are not smart enough but are 'goin uni' anyway - you might never pay back the grossly inflated sums they lend you and which get too easily hoovered up by the universities and their private sector partners, but just sign on the dotted line to become wage slaves anyway for 30 years ... suckers!
    3. To those who unfortunately drop out, well you are the factionless! You deserve whatever the private sector throws at you when they take over the loans.
    I just hope some of the smarter students whose livelihoods are being messed with now at university, progress so fast after they finish university that they start wielding the levers of power soon enough to mess big time with the miserable lives of the idiots wielding them now. Perhaps by making MP's gilt edged pensions disappear as fast as the student maintenance grants, but lending them their pension pots back against the security of their mansions as collateral on lifetime mortgages, instead of giving them to them ... all at RPI plus 3% of course.

    What a way to run a country ... it is so cheap and nasty. We're so much better than this, but the government can only think of votes so panders to the lowest common denominators.
  • nodiscountnodiscount Forumite
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    What happens to loans if someone emigrates? I assume that is never repaid?
    Or if someone works part time and would have earned over threshold if full time but is under because they work fewer hours?
  • missbiggles1missbiggles1
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    nodiscount wrote: »
    What happens to loans if someone emigrates? I assume that is never repaid?
    Or if someone works part time and would have earned over threshold if full time but is under because they work fewer hours?

    There are specific ways of repaying when living abroad, it certainly isn't written off.

    http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678653&_dad=portal&_schema=portal

    If students earn beneath the threshold, they don't make any repayments - the reason why they earn at that level is irrelevant.
  • Mrs_ArcanumMrs_Arcanum Forumite
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    I am confused by the claim in Martin's http://www.moneysavingexpert.com/news/loans/2015/07/summer-budget-2015-student-grant-and-loan-system-faces-overhaul that students from better off families will be hit hardest. Odd that their maintenance loans will be smaller, as the £3,000 + shortfall is expected to be provided by parents, but not compulsory.

    My son will end up with a similar size loan to his sister, with a very similar income. Which all things being equal will have less interest to pay as the loan will be smaller than someone from a less well off family.
    Truth always poses doubts & questions. Only lies are 100% believable, because they don't need to justify reality. - Carlos Ruiz Zafon, The Labyrinth of the Spirits
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