If 83% are predicted not to repay student loans...

MSE_Eesha

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

Read Martin's "If 83% are predicted not to repay student loans, who pays it? It doesn’t work like you think…" Blog.

Please click 'post reply' to discuss below.

Paul_Herring

The alternative, of course, is to drop the stupid aim of getting 50% of students to do any sort of university course such as PhD's in Underwater Basket Weaving, MSc's in The Politics of Harry Potter via the Medium of Interpretative Dance and other such waste of money courses that add nothing for anyone.

Getting the number of students down would allow the state to fully fund the courses again, without stretching the limited funds so thinly that students are required to contribute so much to begin with.

Precious_B

Well I'm confused about a few things here.

You see I saw a tweet from @MartinSLewis made within the last hour
What was not stated was that it linked to a historical article written over 2 years ago it seems.
- so apologies now for bumping this 2+yr old thread.

Oh well, nevermind, what that tweet said was:
"Very common questions "If 83% of student dont repay student loans in full, who pays them." The answer is not what you think, I explain it here... "

Well I thought before I read the article that the shortfall would be funded by the taxpayer. Having now read the article, I'm still of the opinion that the shortfall is funded by the taxpayer. Doesn't everyone think that?

The article tries to confuzzle matters by saying:
"This is a ‘loan’ from the state, so it’s not a question of who pays the rest of the contribution, it’s more the fact that the state doesn’t get repaid."

Where does Martin think this government gets it's money from?
Yes it may borrow it in the first instance, but all borrowing (except student loans if you don't earn enough) has to be re-paid eventually, whether it is borrowed by the government or by any of us. - unless we go bankrupt, etc.
I'm not sure Martin believes either now or 2 years ago that this country is about to declare itself bankrupt, so where does the money come if not from the taxpayer?

Can someone explain what I am obviously not understanding here???

Paul_Herring

I'm not sure Martin believes either now or 2 years ago that this country is about to declare itself bankrupt, so where does the money come if not from the taxpayer?

Governmental borrowing. If you won't be repaying it through taxes, your kids and grandkids will be. Or they'll at least be servicing the interest on the borrowing. Or the amount borrowed will go up and up and up.

Rich_Tribe

Interesting reading here on costs:

Hmm .. I cannot post links so 

• go to ifs org uk website 
• then search for

Higher long-term interest rates and the cost of student loans

It looks like another place where the sharp increase in interest rates has upset the apple cart

My fear is that the interest rate charged on loans which was dropped to RPI + 0% will have to be put back up to + something%.

Can this be changed retrospectively for the current Plan 5 students?

It doesn't feel fair to change the terms of an existing loan but I am not familiar with all the previous Plans to know if there is already precedent.

silvercar

Rich_Tribe said:

Interesting reading here on costs:

Hmm .. I cannot post links so 

• go to ifs org uk website 
• then search for

Higher long-term interest rates and the cost of student loans

It looks like another place where the sharp increase in interest rates has upset the apple cart

My fear is that the interest rate charged on loans which was dropped to RPI + 0% will have to be put back up to + something%.

Can this be changed retrospectively for the current Plan 5 students?

It doesn't feel fair to change the terms of an existing loan but I am not familiar with all the previous Plans to know if there is already precedent.

They've changed the threshold in the past:

https://www.turn2us.org.uk/about-us/news-and-media/latest-news/controversy-on-changes-to-student-loan-repayment