David Cameron snubs my retrospective student loan hike open letter

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.




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Comments

  • I am not the slightest bit surprised. The Tories are determined to get this through and there's no significant opposition or news coverage so they will do so.

    I wrote to my local MP (Rt Hon Kenneth Clarke QC MP) while the consultation period was still open. He forwarded my letter to the minister responsible, and then nothing happened for weeks. Finally I got a reply saying that the consultation period had now closed, and therefore my letter could not be taken into account. :mad:

    Of course, the reply didn't even have the courtesy to address the points I had raised. :mad: :mad:

    What a complete farce. (That's being polite about it.)
  • was a bit david cameron fan whilst he was in the coalition government. but they way he's going about things now as a majority government.
    oh dear!

    you're loosing support thick and fast and if he's not careful Corbyn and his loony bunch will slip back in to no 10 to mess things up again!

    even his own mother and aunt have come out and say enough is enough!
  • d4zza
    d4zza Posts: 23 Forumite
    First Post First Anniversary Combo Breaker
    I don't know if I'm missing something here.


    The situation as it appears to me is that should a student (or former student more specifically) earns above the threshold then they pay back 9% of whatever they earn. As they earn more, they pay back more which surely means it clears quicker. If earnings don't go up but remain above the threshold then it appears to me that they continue paying the same amount.


    This change here looks to me that the only effect anywhere would be that a student would stop paying if their earnings didn't rise but the threshold did then go above said earnings, and surely this means it'd take longer to pay off??


    I can understand the moral issue of mis-trust, but other than that, I just don't see the problem and personally think there's bigger battles to be fought.


    Note - I am declaring I may not fully understand student loans and how they get paid back, so please go easy on me if it's not as it seems to me.
  • Ed-1
    Ed-1 Posts: 3,890 Forumite
    First Anniversary Name Dropper First Post
    d4zza wrote: »
    I don't know if I'm missing something here.


    The situation as it appears to me is that should a student (or former student more specifically) earns above the threshold then they pay back 9% of whatever they earn. As they earn more, they pay back more which surely means it clears quicker. If earnings don't go up but remain above the threshold then it appears to me that they continue paying the same amount.


    This change here looks to me that the only effect anywhere would be that a student would stop paying if their earnings didn't rise but the threshold did then go above said earnings, and surely this means it'd take longer to pay off??


    I can understand the moral issue of mis-trust, but other than that, I just don't see the problem and personally think there's bigger battles to be fought.


    Note - I am declaring I may not fully understand student loans and how they get paid back, so please go easy on me if it's not as it seems to me.

    There's 2 things that you misunderstand. The first is that only 9% of earnings above the threshold (not 9% of total earnings) are taken.

    The second is that remaining balances are written off after 30 years. So for many, they won't repay all of what they borrowed before it is cancelled. Paying more every year therefore means paying more in total.

    That said, the £21000 threshold is so high in relation to average earnings that it is completely reasonable to keep it at that level for the time being (as the repayment threshold can be changed in the same way as a tax threshold can be changed). It's not as if it's going to place any graduate in poverty is it.

    There is another student loan repayment threshold currently in operation which stands at £17,335 (for those who started courses pre-2012). This threshold was kept at £15,000 for 7 years from 2005 to 2012 and then when the one-off increase to £21,000 recommendation came in the Browne review, still wasn't increased to £21,000. It was only uprated with inflation each year starting 2012. So I think it's fair to wait for this threshold to reach £21,000 before increasing the £21,000 further (which is David Willetts' recommendation).
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