MSE News: Martin urges Government to treat students as 'citizens, not just consumers'

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Martin Lewis has today implored the Government to treat students "as voters and citizens, not just consumers"...

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'Martin Lewis urges Government to treat students as 'citizens, not just consumers' during Commons evidence session'

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agarnett

Thank you Martin.

I think you told them straight.

I'm a parent of students affected by the shenanigans and the bloody farce.

I know this thread has only been live a few hours, but I am slightly concerned that there has been no other comment yet - are most people fearful, in a world where Big Data rules, of being traced and punished in some way for speaking out like you did?

Or perhaps more likely, are they already completely disillusioned by the political system as you warned yesterday, and have decided they have better things to do with their lives than bang their heads against a wall?

Is there a feeling abroad amongst our citizens, that if a government can behave like this, then so can they? Is this one of the principal drivers of the moral decline and opportunistic chaos we see all around us?

For example, I was talking to some young people the other day in Europe who said they had a friend, a Brit, who studied in England but who lived in Europe and was doing quite nicely now in a career but had no intention of paying a penny back on a student loan.

I don't know if the Brit had a second passport (more and more "citizens" do) but it was clear that they were now integrated into another country not UK.

I said that they had been misinformed, and that the repayments could not be escaped, but the look I got suggested that I must be joking, and that there is still power enough in the hands of citizens who don't want to pay, to do exactly that by arranging their lives in such a way as to avoid it - and that it is relatively easy to do so.

As a payment avoidance strategy, that may work indeed work for now.

More and more students travel and seek relationships through travel. Many will inevitably move abroad, despite Brexit. We know this is true if only from the furore from students about the shortsightedness of so many of their elders in voting Leave, potentially denying their children and grandchildren the Freedom of Movement and EU Choice that they themselves enjoyed but were too short-sighted to use.

In the same way students have gone quiet on that, leaving the Leave camp to do all the protesting "Brexit means Brexit - Article 50 Now" and all that, students have simply disengaged already from these major political questions. As citizens, they are simply working around the political process which they already seem to have dumped.

But what happens when Big Data catches up? Will they be hunted like criminals? Who will do the hunting on behalf of whom?

Will UK take a lesson from the Philippines and issue orders to shoot them on sight?

Or will most students have the continuing foresight to just cough up like good little boys and girls to avoid any nastiness?

Ed-1

Why was Martin still banging on about student loan terms when it's got nothing to do with the substance of the Higher Education and Research Bill which he was meant to be presenting evidence on?

The HE&R Bill introduces a market-based entry system for new HE providers, provides the legislative backing for a teaching excellence framework to be introduced, allows the Government to provide Shariah-compliant (alternative) finance and allows the Government to set below-inflation linked fee caps.

There's been much confusion in the media about whether the laws are in place to allow universities to raise tuition fees. The ability to raise tuition fee caps by inflation was provided for by the Higher Education Act 2004 (introduced by Labour). However it doesn't allow the Government to raise fee caps by less than inflation for some providers. So the HE&R Bill proposals limit fee increases (fee increases by inflation for all providers are already allowed, it's just the Government chose not to raise the fee caps for the last 5 years).

The fact Martin was still banging on about student loans when the Bill he was presenting evidence on contained nothing to do with student loans made him look rather silly. He also mistakenly thought the alarm was a fire evacuation when it was the members alarm to call them to the lobbies to vote.

Martin has all the right intentions but he still doesn't get it.

Presenting a letter to a parent from the former minister (who has since recommended the Government not to change the threshold!) saying the threshold would go up as evidence to a committee considering a Bill that has nothing to do with is just plain silly.

Martin thinks maintaining the threshold at £21k is a retrospective change to student loan terms and conditions. It isn't a change. The terms state students agree to repay their loan in accordance the regulations as and when they change.

So what do the regulations say? They say the repayment threshold for a borrower with a post-2012 student loan is £21k.

Nothing has changed about that. The threshold will still be £21k. But the regulations can be changed which allows the Government to change the £21k amount if it wishes. Had the Lib Dems still been around, the threshold would undoubtedly have been changed. Ironically post-2012 students - by depleting the Lib Dems - have slapped themselves in the face as the Tories have chosen not to change the threshold. This is completely different to changing the terms. They've got a different policy to the Lib Dems. The Libs Dems' policy would have changed the threshold. The Tories policy is not to change the threshold.

Even if the threshold had have gone up there's nothing to stop future Governments altering it. All they need to do is change the regulations (which students have agreed to when they took the loan). However a change in the regulations has to go through Parliament who can then challenge it. It is therefore much more difficult for a Government to actually change the loan repayment terms that are already in place. In this case, the Government aren't changing the regulations. While you can stop a change, you can't force a change and Martin needs to realise that he's got it all wrong by calling this a retrospective change as it isn't. All it is is the Tories not implementing the Lib Dems' policy! Had the Lib Dems' been voted in to Government they could have changed the threshold - they weren't so Martin really shouldn't be complaining as that's politics!

agarnett

Ed-1 ... erm ... you remind me of me sometimes. Is there a punchline to your post?

I can confirm there was a punchline to Martin's contribution - and I really do doubt that few, other than politicians who didn't like his contribution, would ever call it silly.

Martin called the current politics a bloody farce, and he was right (as seems to be ably confirmed by your latest set of multi-weave political assertions).

Sure, Martin gets passionate and takes the centre stage, but that's what we like about the man. As you say, he has all the right intentions. So what doesn't he "get"?

Are you really trying to make something of his subconscious identifying a members bell as a fire bell into a criticism of the man's intellect and credibility? If you are, I am sorry to have to tell you that from a psychological viewpoint, it says far more about yours than his!

Never mind the other tweaks in the HE&R bill - there is a far far more important problem to solve in that all the current post 2012 loans are missold. No wonder students no longer engage with any of it other than grin through their teeth and bear it whlst considering it no further than next years application getting accepted. I am a parent of kids who are being shafted. One is likely to have an outstanding loan approaching £90 or even 100K before graduation, and it's not for a house!

I'm nearer 60 than 20. I had a completely free top class UK university education in science. Didn't have to pay a penny and nor did my parents. Quite right too.

By age 22, I had a 100% mortgage no bother at all, and by age 27 and married, we had a 30% equity in our third property. I was actually a pretty ordinary performer too, but a BSc, and valued for it! Now if you don't get a first class Bachelors and/or a decent Masters, you probably start way way further down the line. Is that the Millennials fault? Of course not, it's our fault.

We've made a complete farce of it all.

I fancy I have seen you commenting a lot over recent years like your post above, haven't I?

What's your position in all of it - are you of a different generation? Have you got kids? Have you got a wonderful education behind you? How do you reconcile in a 21st century world that kids must have mandatory education to age 16, but thereafter they only get two more years free (and that child benefit may not be payable during most of those 2 years either if I remember correctly)? Did you have to pay for your higher education? If so why?

It is often said that the acceleration of the advances in science, technology engineering and maths is exponential to the degree that we've progressed further in the last 5 years than we have in the previous 5,000! How on earth can you advocate that education need only be mandatory to age 16 and funded by the State to age 18 only, when there is so much of interest to young people and so so much more to learn than when either you or I went to university?

Why on earth should we need to have a view on university tuition fee caps anyway? They are meaningless to us all other than by indirect effect that none of us can predict, just like the bloody student loans scheme itself which is something you now want us all to realise and accept as your T&Cs? Tuition fees are something the state should be funding entirely so caps and other fiddling around should never have concerned individual citizens. They have far more important things to focus on like getting a decent education than having to financially really struggle, and to throw all "normal" financial prudence to the wind to get it, even before they have learned how to be financially prudent!

Ed-1

agarnett wrote: »

So what doesn't he "get"?

agarnett wrote: »

Are you really trying to make something of his subconscious identifying a members bell as a fire bell into a criticism of the man's intellect and credibility? If you are, I am sorry to have to tell you that from a psychological viewpoint, it says far more about yours than his!

He either doesn't get or won't accept that this is an income-contingent loan scheme that is deliberately designed to be flexible and change with the politics. Post-2012 loans were not made using new legislation - they were made under a 1998 Act by amending existing legislation.

The lack of knowledge/understanding of what was and wasn't in the terms and conditions, his misunderstanding of the alarm and the fact he was giving evidence of student loans in a Bill containing everything but student loan policy just show that he is lacking knowledge of parliamentary processes - which is crucial to understanding these student loans. He is trying to make out that the Government has done something wrong when what they have done is entirely routine and within their rights.

Other countries operate an income-contingent loan scheme in the same flexible way - where changes to repayment policy apply equally to all borrowers as with a tax.

e.g. New Zealand froze their threshold and increased their repayment rate from 10% to 12% for all borrowers:

https://andrewmcgettigan.org/2012/06/27/news-from-new-zealand-changing-repayment-terms

agarnett wrote: »

Never mind the other tweaks in the HE&R bill - there is a far far more important problem to solve in that all the current post 2012 loans are missold. No wonder students no longer engage with any of it other than grin through their teeth and bear it whlst considering it no further than next years application getting accepted. I am a parent of kids who are being shafted. One is likely to have an outstanding loan approaching £90 or even 100K before graduation, and it's not for a house!

If post-2012 income-contingent loans were 'mis-sold' then so were all post-1998 loans. In particular, post-2005 loans and post-2008 loans. In 1998, borrowers were promised that interest rates would be inflation-linked to RPI and the Government intended to raise the threshold of £10,000 by average earnings. Instead they froze it for 5 years until 2005 and then increased it to £15,000 in 2005, saying they would increase it from 2010. 2010 comes (and 2011) and the threshold still stands at £15,000 (and stays that way until 2012). In 2007 they promised that repayment holidays of 5 years would be available. That was put into the terms and conditions and then taken out 2 years later for all students (of which I was one that would have benefited from not having to repay for 5 years). In 2009 they wriggled out of setting interest rates linked to RPI when it went negative (setting it at 0%, saying the terms permitted them not to set a rate).

Spot a pattern? The repayment terms change as we go along for all borrowers. The Government in 2010 actually changed this by only applying new terms to new borrowers. They were perfectly within their rights to change them for all post-1998 borrowers but chose not to. This post-2012 change of policy intention (it's not a change of terms) is nothing new when you look back, and it no doubt won't be the last.

That is why students don't sign up to a set of terms - they sign a loan agreement that says they'll repay in accordance with the regulations as and when they change. Income-contingent loans therefore become a variable tax.

agarnett wrote: »

What's your position in all of it - are you of a different generation?

I am a graduate with a post-2012 loan. The reason I am so for the threshold freeze is that I also have a pre-2012 loan and student loans have become so complex that the threshold freeze actually benefits me. This is because the Government - by not applying the new terms to existing borrowers in 2012 - left existing borrowers repaying at a lower threshold and therefore repaying more each year (and this by the way was not what was recommended in the Browne Review which recommended that the threshold should be increased from £15,000 to £21,000 as it hadn't been increased since 2005 - it didn't recommend setting a new one).

Therefore for 2 reasons I support the threshold freeze on a personal level. Firstly, as I understand what I have agreed to (as I read the loan agreement) I accepted that changes to my repayment terms were inevitable at some point as they are variable - that's why even though I was a bit miffed in 2010 when the Government got rid of my ability to take a 5 year repayment holiday, I accepted it was part and parcel of what I have taken out even though it means I will have to make repayments in years I otherwise wouldn't have.

Secondly, because only repayments above £21,000 are used to pay off my higher-interest loan that is written off later than my first loan (this was a policy decision), even though I have to make repayments at a lower threshold due to my pre-2012 loan, by freezing the £21,000 threshold it means more of what I repay goes towards paying the loan I want repaying as it will be written off latest and it has higher interest applied.

The interest rate is something the Government should be looking at reviewing. It was based on the Government's cost of borrowing being RPI + 2.2%, hence the maximum rate being set at RPI + 3%. However the Government's cost of borrowing in 2015 was lowered to RPI + 0.7% with no corresponding lowering of the interest rate. The Government considered lowering the maximum interest rate when they decided against increasing the threshold, however concluded that it would benefit the wrong group of borrowers (the threshold freeze hits lower and middle earners whereas in the main an interest rate reduction benefits higher earners who repay the interest). However for someone like me who has only borrowed under the post-2012 terms for a one year course and also holds a pre-2012 loan, I don't have to be a higher earner to benefit from a reduction in interest rate as my loan balance is lower and therefore I can pay it off (which I want to before my pre-2012 loan is written off, to clear all loan balances) without being a high earner.

Earnings didn't rise very much between 2010 when the £21,000 threshold was set and 2016 when it comes into force. Therefore freezing it (rather than lowering it, which the Government could've done) was the fairest solution for all borrowers. For those who only hold a post-2012 loan and pay back at £21,000, I can understand that you would feel a bit miffed at them not raising it as promised (I did when they didn't raise the £15,000 threshold either to £21,000 as recommended or until 2012 by inflation when it was promised that it would rise in 2010!) but the reality is I understand (and all students and graduates need to understand) that the threshold is miles higher in comparison to earnings than intended and that this is a variable loan income-contingent loan scheme that works as a tax.

My view therefore is you either campaign for all borrowers to have a fixed set of terms by regulating the loans (which in my view is disproportionate when the terms are non-commercial and are really a variable tax - you can't really fix a tax for the future as the tax system and employers would fall over with different taxes for different students), or you accept that these aren't commercial loans that aren't regulated as they are a variable tax. What you don't do is what Martin has done and single out a particular policy for post-2012 borrowers (ignorant of its beneficial impact on borrowers like me) and make it out as an unprecendented change (which is isn't, again oblivious to the twists and turns of pre-2012 borrowers’ loans), compare these loans to commercial loans (which is like comparing a variable tax to a mortgage, ie, apples and pears), call it a retrospective change to terms (when it isn't, it's just a change of policy), get people's hopes up by doing so and getting them to write to their MPs and then go giving evidence that it's all wrong to a committee considering a Bill that it has nothing to do with. It just makes you come across as lacking knowledge and it changes nothing when then decision has already been taken.

The reason I disagree that my loan terms (and all borrowers' loan terms) should be fixed at the time you take it out is that it rules out beneficial changes as well. Taxes go up and down with the politics so I accept that my future income-contingent loan obligations may go up and down as well.

agarnett

Thanks Ed-1

You have set out your reasoning very eloquently indeed, which I wish I could do sometimes!

However, I must still take issue with your criticism of Martin's stance which I think is a far more general and principled one than you give him credit for.

Each of us starts with our own experience and knowledge of course and our arguments are bound to start from there.

I am sure even my children don't agree with all my arguments and my chosen stance, and maybe even only a few of them!

But I think you should leave off ridiculing Martin about the member's bell - it's silly to extrapolate that to a lack of understanding of parliamentary processes. I am sure most other than those that actually have sat for years on parliamentary select committees, especially invited witnesses, are to a large extent like fish out of water in those meetings, even those who have been there multiple times, which is why many of them end up providing very useful evidence, stripped of any credibility for any false argument they might have hoped to get away with

We can learn on Wikipedia that Martin read government and law at LSE, and was for a time general secretary of LSE Students Union which is quite an interesting position given LSE's location smack between the Law Courts area of London and the offices of government and Parliament.

And given too, what he's done since then, I think it might be just a tad silly to suggest he is short on knowledge, experience and practice on how politics and government and parliament works

A knee-jerk reaction to the sound of a loud bell tells you little other than that the bell wasn't sounded by the person that reacted, or next level up, that the person simply wasn't expecting it at that particular moment whilst focussing on something else. That's an area where cognitive pschologists could make a lecture out of what might happen next

I don't suppose anyone takes it upon themselves to remind witnesses that if they hear a loud bell in that building that they may ignore it, because it is not for their ears! It is again part of the institution that enjoys the bearing of witnesses souls, and committee chairmen enjoy the discomfort and embarrassment it might cause to their witnesses when it happens. They love soothing them afterwards - tactics of surprise are all part of the accepted inquisition and torture process which gets results

In Martin's case he seemed perfectly comfortable in what he arrived to achieve. Labouring your analysis of the the bell effect on him can only conclude that he has a fully functioning subconscious fight or flee response!

I think the most important thing most of us see in Martin is the passionate fighting spirit.

He was surely attacking our governmental and parliamentary political culture of the past few decades and warning that it must rapidly be rectified to regain the trust of citizens, especially the young.

Your view is of course wholly reasonable given your own experience with two separate but now inter-related loans - you have almost been groomed by the system to accept some kind of best efforts tweaking and to accept that successive governments do not have a crystal ball. And I also understand why as someone of your supposed age now you have kindly given some information, would be most interested in maintaining fairness and optimising your own repayments.

My own experience is a much more contrasted by a time difference of course, and by inevitable feelings of parenthood which you may or may not have experienced yet - fairness for the Brit children I spawned, and others have spawned. My children's experience of the post 2012 scheme so far, contrasted with my own education indicates a stark unfairness between the opportunities I was given and those they have been given. I didn't realise it so much until I was much older, but I was one of a kind of elite despite being of very humble council estate background in the 60s and a 70s top university education that was completely free and included a local authority grant so I could afford to buy bread and salad for sandwiches and a pint of Fullers ESB once or twice a month! Actually usually two pints once a month

I too have kind of resigned myself to the loan system my children are stuck with as opposed to the free university education I received. They were very young to be asked to do so, but they signed on the dotted lines and its a done deal (a missold one like to varying extents the other loan schemes were too, as you point out).

However, my main beef, and I think Martin's main beef (someone will correct me if I am wrong) is that the mis-selling of the current loan scheme is absolutely blatant and has destroyed far more trust in the system than any previous variations in previous schemes.

Martin is surely the one and only Money Saving Expert and Consumer Champion in one, and is undoubtedly the most knowledgeable and passionate on what actually constitutes fairness in consumer contracts - and that's not just what the law says currently, but what it should say.

As far as I can see, he is simply campaigning to rectify wrongs in the way he best knows how, and he hasn't skewed things off the rails to that end at all. However, if that means derailing or hijacking lesser aspects of parliamentary process, I say fair play to him. A few eggs cracked to make an omelette as they say. He most definitely is still (amazingly - bearing in mind that he doesn't have to work but just wants to) working for the public good and not for himself other than for his own satisfaction, same as parliament should be working for us, and not foring us to pander to it and it's workings! Martin is not afraid of parliamentary process, but he is not disrespectful of it or reckless or unthinking by bending it a bit, either.

His informal representation of our interests as citizens is I think very acceptable and telling.

There are far less able characters in this world claiming to represent the public good and even some elected to do it, and they need reminding from time to time that it is sometimes a bloody farce that needs sorting.

I am sure that the force of some of Martin's sentiments helped shape the excellent and extremely candid speech and vision presented by Theresa May this morning. It very pleasantly surprised me in the thought that had clearly been put into it. I am a little disappointed that Jeremy Corbyn seems not to have appreciated the good bits in it yet!

But there's a long way to go to create the great meritocracy the PM craves and envisions, and I am not sure the word meritocracy sufficiently carries with it an inclusive vision for the less able brains to be able to share in the wealth measure of meritorious success that still seems to dog her and Tory thinking. Perhaps that why Jeremy Corbyn isn't letting himself be easily swayed yet.

How do the weak, the disabled, the depressed and the unfortunate work hard to achieve the merited wealth and balanced entitlement to leisure and play (let's not forget that) that everyone is supposed to be aiming at?

One unfortunate phrase early in her speech was the suggestion that people should work hard and not complain.

Not complain? Really? I would love to ask her what she had in mind there.

There's whining, there's compo seeking, and there's complaining against wrong, and there is campaigning for changes to right ... that's all part of the process which formed parliament as we know it, and most certainly is not disallowed by it, or by the ringing of some bell!

Ed-1

agarnett wrote: »

Thanks Ed-1

I agree with a lot of what you say and understand it from your point of view.

From my point of view as someone who experienced these retrospective changes, and one of mine - the repayment holidays withdrawal - actually was a retrospective change to the written terms, however the threshold uprating in my case (when Labour didn't increase the threshold as they promised in 1999 or 2010, despite increasing it from £10k to £15k in 2005) and in the current case is a very easy thing for Government to change their mind on as they only need to write the current threshold level into the terms and not the future levels. As the written terms can be changed at any time, that allows them to change the threshold to whatever they want and increase it at the time, regardless of what was promised or intended at the start. For example, a future Government could come in in 2020 and say they will raise the threshold from £21,000 to £25,000 for all borrowers. No-one knows the future with student loans!

Don't get me wrong - I'd vote for Martin if he stood to be my MP as he was by far the most passionate about the issue of student loans of any MP I've ever seen. Putting knowledge of the correct parliamentary processes with it by becoming an MP (and who knows, a future universities minister?) with the clearly evident passion what make for a pretty awesome minister!

However I think Jo Johnson is a very good minister for universities (much better than any Labour minister) and believe maintaining the threshold for post-2012 borrowers at £21,000 for the time being was the correct decision in light of what these loans are and the new data on earnings etc. The pre-2012 threshold should have been increased to £21,000 in 2012 as was recommended in the Browne review which the reforms were based on. One of the current problems for those borrowers like me with both types of loan is that the pre-2012 has ended up too low compared with the £21,000 level as inflation has been very low recently and the Government decided to increase it every year by inflation starting 2012, rather than increasing it to £21,000.

On the post-2012 student loans, I would actually have rather started on this type of loan regardless of the threshold freeze as the amount of support accessible while at university is by far higher than I could access as a pre-2012 student.