Are degrees in the UK value for money?

GreatApe

economic wrote: »

For anyone to buy these loans for 100p on the £1 the interest rate would have to be quite meaningful given the expected default rate on these loans. (I take it whoever buys it are not covered for losses by the UK taxpayer?).

Index linked long dated gilts are negative 1.7% yield last I checked

I think its what 3% above inflation? If 2/3rds are expected to be written off, then how will they make any money on these loans in real terms?

I would link it to just CPI not +3% above. Maybe CPI + 1%
<1/100ths would default and on default most the loan amount would be recovered

In fact not only will it be a real loss, but it would be a nominal loss:
Say £100 total loans bought.
£100 * 1.03^30 * 0.33 << £100

More like £100 * 1.03^20 *0.995 = £180

Plus this is conservative as most of the third of loans would be repaid before 30 years and hence less interest received by the owners of the loans.

Close to zero loans would default
The loans would be paid down quickly probably in less than 20 years for most the kids.
25% of earnings above £5k (or even 25% of earnings above £0) would see a kid earning £25k pay down £5k a year their interest is £1.8k so they pay down in their first year £3.2k of their £60k loan. Earnings typically increase with age and interest charged will fall each year as less of a loan remaining so it is likely to be cleared quickly and certainly much more quickly than a student loans which pay back just 9% above £21k. The housing loans can have higher repayments percentage at lower starting threshold as they offset rental costs or mortgage costs

I would also allow early repayment of loans.
I suspect some students would pay back quickly
Some may even opt to pay down their student housing loan with a normal mortgage
Say the loan was CPI + 1% and a young adult bought a house 5 years ago outright with their partner. At the time they purchased a 3 bedroom in Birmingham for £120k (£60k loan x 2 persons) its now £150k and they have also paid down their loan down to £100k in that time frame from their earnings. Their interest is currently 3% CPI + 1% = 4% interest. They could well decide they would rather just remortgage their property pull £100k out and repay the student housing loan. Government gets its £100k back and the young adults now have a 66.7% LTV mortgage with a high street bank charging them just 2% fixed for 5 years. 100% repayment of the student housing loan just 5 years after they took it. Compared to close to 100% needed to be written off if they had gone down the media studies route

Andy_L

Cakeguts wrote: »

So why not have standards of nursing where the people with responsibility need degrees and the rest don't? It would mean that all nurses had real degrees from real universities and all other jobs were learned on the job.

that is the current system of nurses & HCAs

GunJack

GreatApe wrote: »

~£100k is the lost earnings from age 16-21 if you decide to study rather than work

I keep popping into this thread to see if you two/three have been transported back to the real world.....


..just that line in itself just proves you haven't, at all, and probably never will....

economic

GunJack wrote: »

I keep popping into this thread to see if you two/three have been transported back to the real world.....


..just that line in itself just proves you haven't, at all, and probably never will....

If you don't understand that then you need to go back to key stage 2 mathematics.

starting salary = £20k
21-16 = 5
20k * 5 = £100k

Do you understand the maths behind the above?

economic

GwylimT wrote: »

All of python is very basic, I would expect anyone capable of reading
to be able to use all aspects of python. I found it odd that you compared a very simple easy to use equipment to studying, studying requires actual challenge surely?

I take it you can not answer my python question given your lack of reply? Or do you need more time? Or perhaps your English isn't up to scratch? Which is it?

SingleSue

The maths is sound, the reality behind it is not.

Not many 16 year olds will be earning 20k a year and the same goes for 17,18,19,20 and 21 year olds with only GCSEs. The best they could hope for is minimum wage or very low paying apprenticeships for most if not all of those 5 years.

economic

I voted for brexit. I am hoping for a HARD brexit as i think this will be very good thing for the UK long term.

If we do get a hard brexit, then we would not provide student loans to EU students to study in the uk. I think already about 15% of all university students are from the EU (excl UK). This number will be sure to drop following a hard brexit due to no more funding. Would this help cut out the useless degree courses in the uk? How many EU students attend the good course/unis vs the bad ones?

How much of the research funding the EU provides us goes to each of the universities? Once this shuts off, how will the poor universities survive without the research money?

economic

SingleSue wrote: »

The maths is sound, the reality behind it is not.

Not many 16 year olds will be earning 20k a year and the same goes for 17,18,19,20 and 21 year olds with only GCSEs. The best they could hope for is minimum wage or very low paying apprenticeships for most if not all of those 5 years.

The average starting salary for grads is 19-22k. Instead of paying these sslaries at 22 years old, they pay them at 16 year olds. theywill have no choice as no one will be a graduate anymore, everyone will be looking for work at age 16 in the same numbers as those looking for work at age 22 after doing a useless degree. So the reality behind it is the reality. Companies are not going to reduce salaries on offer just because people have no degree anymore.

But not only that, that's 19-22k STARTING salary. In a few years time with valuable skills learnt on the job, the company will be willing to pay more so the salary would actually be going up over the 5 year period. So the average salary for workers aged between 16-22 would be more then 20k, more like 25k.

Salaries shot up quite a bit during the initial years of ones experience. This is because their added value goes from 0 at age 16 to a hell of a lot more by age 19 say. Once value added tapers off, salaries generally taper off too.

Plus none of the above include bonuses, commission etc etc.

Man, kids these days are really being scammed by this corrupt education system.

GreatApe

GunJack wrote: »

I keep popping into this thread to see if you two/three have been transported back to the real world.....

..just that line in itself just proves you haven't, at all, and probably never will....

£100k earnings over 5 years is only £20k a year

ONS shows Median full time earnings for 18-21 year olds for April 2016 is £16,380 however that is nearly 2 year old data up it 5% and you get towards £17,200

Also in theory the kids who are going to university should on average be smarter than the kids who are not going and also less destructive and less problematic so their earnings should be higher than the median 18-21 yr olds. If we attach just a 15% premium for that you get £19,800

So if a kid who was going to go to university with OK grades decides not to go they would in theory earn more than the median full time for 18-21 year olds of £17,200 using just a 15% premium the lost earnings between 18-21 add up to £59,300

So £59,300 lost earnings plus £60,000 student loans = £119,300

If you left school age 16 that is an additional two years of work at a combined £21,000

£120-140k

If your course is a 4 year course add another £40k in loans and lost earnings

SingleSue

Cambridge receives a quarter of their research budget through EU funding, Oxford a 5th of their budget, LSE 36%.

The other Cambridge (the not so good one), between 2006 and 2015 received almost 75% of their research funding via the EU.