Why haven't student loans become a huge mis-selling scandal like ppi?

Oliver1191

Hello!
I'm in my late 30s.
When i was doing my A-levels as a teenager (age 16 and 17), i feel as though i was misled.

To begin with my teachers, who to my knowledge had no financial training, constantly took it upon themselves to convince my class that we should take out a student loan. They said we'd probably never have to pay it back. They said it was the best way to get a degree (financially). They said that everyone does it. They said that there was no or very little interest to pay (some said it was interest free). They said we could just quickly pay it back after the degree.

They said a lot.

By the time i turned 18 and became an adult, i was subsequently convinced that i had to take out a student loan and that it was in my best interests to do so.

I had no idea there were other options available (and that these could very well have been in my best interest).

When i talk to other friends and colleagues, i hear similar stories. 

Why hasn't this become a huge mis-selling scandal and people re-imbursed?

Or is it something that could flare up at any moment?

[Deleted User]

What exactly is your complaint?
You took bad financial advice from someone who is not a financial advisor and didn't do your own research?

Those within the education system seem to love promoting the education system. 
Universities are close as dammit to any other business, their product is education and they have collectively convinced the public that purchasing their services will enrich their customers lives (much like debeers did with diamonds).

nick74

Teachers are not connected to the Student Loans Company and are not actually 'selling' anything, therefore they can't really be accused of mis-selling. 

ZeroSum

Did you have the cash to pay all your fees up front? If not, then why do you think its been mis-sold? 

Oliver1191

In the first instance, teachers are not ordinarily trained to give financial advice to children. At no point did i ask for financial advice - it was the teachers who chose to give it and designated time to repetitively promote and normalise going into debt. Schools have motive to promote this as going to university would look good for their student destination data. Should schools be held accountable for mis-selling or misleading their students with regard to student loans?

In the second instance were adequate safeguards in place to ensure that all young adults were able to make an informed financial decision free from duress? Should the Govenment and student loans company be held accountable for ensuring children and young adults are clear as to the implications of debt before taking it on?

steampowered

Your loan doesn't need to be paid if you aren't earning, and will never be paid in full if you don't earn enough. 

Your teachers were correct to say that they are low interest. Given your age, you will presumably be on a "Plan 1" student loan, paying almost no interest - 1.1% currently. The rate is higher for those who started university after 2012.

What "other options" are you referring to? Are you suggesting that you wouldn't have gone to university at all, or that you would have paid your fees up front rather than taking a student loan?

Oliver1191

nick74 said:

Teachers are not connected to the Student Loans Company and are not actually 'selling' anything, therefore they can't really be accused of mis-selling. 

But schools are judged on their destination data giving schools a huge incentive to take it upon themselves to intervene.

bigadaj

OP what were the other better options that you could have used but didn't?

Oliver1191

ZeroSum said:

Did you have the cash to pay all your fees up front? If not, then why do you think its been mis-sold? 

Because you don't need the cash up-front. For instance, you can 'pay as you go' and work part time.

Moreover, i don't think schools should 'preach' taking on debt to children.

steampowered

Oliver1191 said:
Because you don't need the cash up-front. For instance, you can 'pay as you go' and work part time.

Moreover, i don't think schools should 'preach' taking on debt to children.

"Paying as you go" is far far far worse. That is money that you will always need to have paid even if you end up earning below the student loan repayment threshold (so would never have had to have paid a student loan back). It would be really really daft for anyone to pay  fees up front if they have a student loan available.

 Student loans work more like a tax. It comes off your income above a certain threshold. Very much like income tax. 

Worrying about children taken on a student loan, is a bit like worrying they might have to pay higher rate income tax. 

colsten

You still haven't articulated what the issue is, OP. And you haven't answered the question whether you had the cash to pay all your fees up front. 

Also, is the Savings and Investment board the right place to discuss student loans?