child off to uni sept 2022 - high interest means will not pay his loan off in 30 years - But...

Simon282

I know martin says that many kids will not pay off their loans - but I did a speadsheet and over 30 years my child will pay back about £130k.  The interest means the total is always out of reach - so this is really just a tax for 30 years.  
However, paying this extra tax in mid life (when he/she may have kids) is not great (money is tight in mid years.  So, it seems that you either accept the scheme or reject it (if you have the means to do so).  
I am thinking I will pay off his loans as he will pay back 130k over 30 years if I don't .  So should we not bother to apply at all  - or should we apply and then pay the fees loan and maintenance loans off immediately?  What is the best way of doing this?

Caz3121

It's worth watching the video here https://www.moneysavingexpert.com/students/student-loans-decoded/#youtube-player-mO_rAsMuAlM

Albermarle

Or read this
Student loans: the truth about uni fees, loans & grants - MSE (moneysavingexpert.com)

Couple of points worth noting .
It is possible to take some of the loan on offer but not all of it . For example use the loan to pay the tuition fees but self fund living expenses.
In most cases parents have to subsidise some of the the living costs anyway, as the loan/grant is not enough. 

pjcox2005

Good links posted above particularly this table:

STARTING SALARY  (AUG 2022)	SALARY AFTER 30 YEARS/WHEN DEBT CLEARS	TOTAL AMOUNT REPAID	WILL I FULLY REPAY IT?
£15,000	£64,829	Nothing (i)	No
£20,000	£86,440	£350	No
£22,500	£97,250	£7,380	No
£25,000	£108,050	£19,840	No
£30,000	£129,660	£49,730	No
£40,000	£172,880	£109,770	No
£50,000	£205,810	£163,630	No
£55,000	£177,390	£137,380	Yes – 25 years
£60,000	£167,160	£121,310	Yes – 21 years
(i) Assumes student loan repayment threshold goes up in line with our assumption of average salary increase.

It's obviously sizeable but if you are earning that much money (i.e. starting with £55k and increasing up to £177k per year at the end) then they should be fine, particularly as they may have a partners income to take into account. Given that I'd personally still take loan, not pay it back early and see how earnings pan out given lower early year earnings and potential career breaks for kids etc.

Different argument as whether it's most appropriate for the nation to pay additional taxes to support students or students should pay additional future tax to support there own higher learnings. I expect reasonable arguments for both.

Exodi

pjcox2005 said:

Different argument as whether it's most appropriate for the nation to pay additional taxes to support students or students should pay additional future tax to support there own higher learnings. I expect reasonable arguments for both.

I think the public would be less frustrated about subsidising students, if the number of people going to university wasn't spiralling out of control - in 1980 about 15% continued education past 18, by 1990 it was about 25% - now it is over 50% and continuing to climb.

Not only does it devalue of degrees (or inflate credential requirements) but I feel it's more common than not that someone ends i[ working in a field completely unrelated to their field of study.

I'm undoubtedly going to p*** some people off saying this, but I personally think it's irresponsible to offer degrees with limited career opportunities - e.g. Media Studies, Sociology, etc. in droves.

Albermarle

 but I personally think it's irresponsible to offer degrees with limited career opportunities - e.g. Media Studies, Sociology, etc. in droves.

You missed off film studies,  and tourism studies

but I feel it's more common than not that someone ends i[ working in a field completely unrelated to their field of study.

Not sure this is always such a bad thing, and inevitable to some extent . You do learn other things at Uni and not just the subject matter . Not just drinking too much but for example how to assimilate lots of info and then organise it into a literate essay . Still even if you do not end up working in the field , you probably learn more general skills doing an academically difficult course than a Micky Mouse one.