If 83% of students are not expected to fully repay, how does the government make up for the loss?

RocketMan1234

As above in the title.

Are the debts simply cancelled and the government would then classify it as a loss? But if they do that, wouldn't the government be in a significant deficit if 83% of people never pay it off?

They've essentially lent out cash that will never be paid back; I think it's widely accepted that most people will never pay it back. Yep, the student loan system is a mess.

It's a question that I've pondered about for a while...

Thanks.

Jonathan_Kelvin

It’s paid for out of general taxes or by government borrowing, the same as any other expenditure.

The government will hope that having a better educated population makes the country more prosperous overall, so that the net effect on finances will be positive.

Willing2Learn

RocketMan1234 wrote: »

… Are the debts simply cancelled and the government would then classify it as a loss? But if they do that, wouldn't the government be in a significant deficit if 83% of people never pay it off?

They've essentially lent out cash that will never be paid back; I think it's widely accepted that most people will never pay it back...

I went to university as an mature student. When I was interviewed for the course, I was upfront and told them I plan to be employed in low-paid work and have no intention of ever earning enough to reach the repayment threshold. They were quite shocked

[Deleted User]

RocketMan1234 wrote: »

Are the debts simply cancelled and the government would then classify it as a loss? But if they do that, wouldn't the government be in a significant deficit if 83% of people never pay it off?

No.

They've made a profit as at least some people are paying for their education, whereas previously they were paying for everyone of the taxation pot.

It's a way of reducing the burden on central resources.

chucknorris

Deleted_User wrote: »

No.

They've made a profit as at least some people are paying for their education, whereas previously they were paying for everyone of the taxation pot.

It's a way of reducing the burden on central resources.

When they were paying for everyone (home students) the numbers of students was far fewer, that IMO was a far better system than we have now. A significant percentage of students currently at university shouldn't really be reading for a degree, they are not up to the necessary standard.

femalemonarchfemalecanine

RocketMan1234 wrote: »

As above in the title.

Are the debts simply cancelled and the government would then classify it as a loss? But if they do that, wouldn't the government be in a significant deficit if 83% of people never pay it off?

They've essentially lent out cash that will never be paid back; I think it's widely accepted that most people will never pay it back. Yep, the student loan system is a mess.

It's a question that I've pondered about for a while...

Thanks.

being cynical, they don't care, because it will be a future governments issue to deal with.

p00hsticks

These days, you could argue that further and higher education is at least in part a way of keeping the unemployment figures low. That's one of the reasons that previous governments were so keen to encourage young people to stay in education - there just weren't enough decent jobs for them to go into.

Yes, the student loans cost, but they'll be at least partly offset by the income tax and NI paid by the college/university lecturers and support staff.

If you got rid off all the colleges and universities overnight then you'd lose the tax input and end up paying out in unemployment and other benefits.

It's all just a drop in the ocean anyhow - someone in another thread has just drawn our attention to this
http://www.nationaldebtclock.co.uk/

JayRitchie

It’s factored into the cost calculations. In effect a lot of people pay an extra 9% tax against which the government has been paying more for universities and student living allowances.

username901

p00hsticks wrote: »

These days, you could argue that further and higher education is at least in part a way of keeping the unemployment figures low. That's one of the reasons that previous governments were so keen to encourage young people to stay in education - there just weren't enough decent jobs for them to go into.

Yes, the student loans cost, but they'll be at least partly offset by the income tax and NI paid by the college/university lecturers and support staff.

If you got rid off all the colleges and universities overnight then you'd lose the tax input and end up paying out in unemployment and other benefits.

It's all just a drop in the ocean anyhow - someone in another thread has just drawn our attention to this
http://www.nationaldebtclock.co.uk/

Not really. The extra income tax and NI is minuscule compared to the amount doled out in student loans for disney studies, philosophy and media studies.

And if there were fewer students going in to universities, these IT, network and security lecturers earning £60k would earn £100k+ in the private sector, so more tax and NI, and amount saved on student loans would cover JSA

Carrieanne

p00hsticks wrote: »

These days, you could argue that further and higher education is at least in part a way of keeping the unemployment figures low. That's one of the reasons that previous governments were so keen to encourage young people to stay in education - there just weren't enough decent jobs for them to go into.

Yes, the student loans cost, but they'll be at least partly offset by the income tax and NI paid by the college/university lecturers and support staff.

If you got rid off all the colleges and universities overnight then you'd lose the tax input and end up paying out in unemployment and other benefits.

It's all just a drop in the ocean anyhow - someone in another thread has just drawn our attention to this
http://www.nationaldebtclock.co.uk/

That national debt clock includes the £435 billion the state created from nothing via the Bank of England as QE. Effectively Britain borrowed £435 billion from itself. Britain like every other country with its own printing press can create an infinite amount of currency (AKA money) because just as with every other currency it's backed by precisely zilch of tangible value. It's also why all 200+ other countries worldwide also carry a huge national debt. There are no creditor nations, not even dinky places such as Kuwait that is swimming in oil.

adindas

Willing2Learn wrote: »

I went to university as an mature student. When I was interviewed for the course, I was upfront and told them I plan to be employed in low-paid work and have no intention of ever earning enough to reach the repayment threshold. They were quite shocked

In fact, even it is not an intention it is a general truth on some subjects. If people study on the certain subjects where there are already too many graduates on the fields, less academic rigorous, easy to get, their chance to get the job that need their degrees will be very low.

Just go to the major supermarket chain you will find there are many university graduates working stacking items on the shelves. Do you think these people are naïve to choose that path voluntarily if they could find a job which need their degrees??