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  • FIRST POST
    • MSE Guy
    • By MSE Guy 13th May 09, 5:27 PM
    • 1,628Posts
    • 1,255Thanks
    MSE Guy
    Government fails to honour student loan promise
    • #1
    • 13th May 09, 5:27 PM
    Government fails to honour student loan promise 13th May 09 at 5:27 PM
    This thread is to discuss the following news story:

Page 1
    • Scrilla
    • By Scrilla 13th May 09, 8:16 PM
    • 239 Posts
    • 144 Thanks
    Scrilla
    • #2
    • 13th May 09, 8:16 PM
    • #2
    • 13th May 09, 8:16 PM
    The repayment threshold will also remain at 15,000 for the next 12 months. Had the Government used a negative RPI rate to calculate this, the threshold would have reduced and borrowers would have started repaying earlier and ended up paying more. Setting interest at 0% has prevented this from happening.
    by SLC
    What about the positive RPI that was being used for previous years? Surely, if the justification for not setting a negative interest is that it would lower the repayment income threshold, then a positive RPI over the years would have meant the repayment threshold year on year would have increased?

    As to borrowers repaying earlier, costing more, yes it would, taking into account negative inflation. But by using inflation in this respect to justify not repaying earlier, it conveniently overlooks the fact that setting an interest rate above the actual RPI means borrowers are paying more regardless.

    The decision (on 1998-onward loans) has been taken because loans are already well subsidised, and it would be difficult to justify to taxpayers a situation whereby students take out loans in 2009/10 and their balances are immediately reduced.
    by SLC spokeswoman
    The last time I looked, the borrowers making repayments are taxpayers too!

    Although I disagree with the SLC's justification I personally can't argue with a 0% interest rate. I did and still maintain that the CPI would be a better measure of inflation (currently at 2.9%) to use for things like student loans as it is an index more representative of the spending habits of a student or someone just out of university. So using CPI would have benefitted students in the past, but will go against them in the current climate.
  • Sol00
    • #3
    • 14th May 09, 12:37 AM
    • #3
    • 14th May 09, 12:37 AM
    [QUOTE=Scrilla;21529517]The last time I looked, the borrowers making repayments are taxpayers too!QUOTE]

    Good point.
  • PeterDuckett
    • #4
    • 14th May 09, 8:33 AM
    • #4
    • 14th May 09, 8:33 AM
    Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?
  • ILW
    • #5
    • 14th May 09, 8:46 AM
    • #5
    • 14th May 09, 8:46 AM
    Right if this is true which it is, I have been mis sold my loan on the premise i have been lied to. Could the students lurch a test case based on the same premise of PPI reclaiming?
    Originally posted by PeterDuckett
    Only if they sober up for long enough.
  • digitaldai
    • #6
    • 14th May 09, 8:56 AM
    • #6
    • 14th May 09, 8:56 AM
    There is a petition at number 10 online, but I can not link it as i am not allowed!
    • busiscoming2
    • By busiscoming2 14th May 09, 10:48 AM
    • 4,336 Posts
    • 11,522 Thanks
    busiscoming2
    • #7
    • 14th May 09, 10:48 AM
    • #7
    • 14th May 09, 10:48 AM
    digitaldai The only petiton I could find is to prevent uni's charging higher tuition fees.
  • BruceyBonus
    • #8
    • 14th May 09, 12:57 PM
    • #8
    • 14th May 09, 12:57 PM
    If you go to the number 10 petition website, I found it by searching for student loan. It's called: 'Petition to: Decrease Student Loans in-line with RPI Inflation as promised.'
    Already 115 signatories.
    Originally posted by cmck100
    This is the direct link to the petition: http://petitions.number10.gov.uk/decreaseloans/
    • Robinmsa
    • By Robinmsa 14th May 09, 2:15 PM
    • 149 Posts
    • 26 Thanks
    Robinmsa
    • #9
    • 14th May 09, 2:15 PM
    • #9
    • 14th May 09, 2:15 PM
    This is an interesting one.

    Fortunately for myself, my loan is pre 1998. But I do feel strongly about how this has been dealt with, the post 1998 loans just been zero% they should infact be -0.4%. As I believe is in your contract.

    I have also signed the petition 127 signitures at the moment...

    Robin
    Smile Your Saving
    • Rafter
    • By Rafter 14th May 09, 2:37 PM
    • 3,837 Posts
    • 1,366 Thanks
    Rafter
    As RPI inflation is down purely as a result of mortgage interest rates dropping and CPI is still significantly above the Bank of England target, this seems totally reasonable.

    What would be fair though is if the -0.4% lost this year is knocked of in future years when the RPI inflation rate goes positive again.

    R.
    Smile , it makes people wonder what you have been up to.
    • toontastic
    • By toontastic 14th May 09, 2:40 PM
    • 340 Posts
    • 161 Thanks
    toontastic
    This is the direct link to the petition: http://petitions.number10.gov.uk/decreaseloans/
    Originally posted by BruceyBonus
    No offence but I've yet to see a government petition on anything important ever make a difference.
  • markb1981
    I can't say I am suprised by this but that doesnt make it right.

    so sign the petition and kick up a fuss.

    the squeeky wheel gets the oil!

    if you dont ask for it you wont get it etc etc
    • toontastic
    • By toontastic 15th May 09, 8:42 AM
    • 340 Posts
    • 161 Thanks
    toontastic
    I can't say I am suprised by this but that doesnt make it right.

    so sign the petition and kick up a fuss.

    the squeeky wheel gets the oil!

    if you dont ask for it you wont get it etc etc
    Originally posted by markb1981

    Ah I know, although I know noubt will change, I still signed
  • anotherpaul
    It's a very poorly written petition - the "more details" say:
    "The current student loan interest rate is 1.5%, but it is meant to be linked to RPI inflation which is negative, it has gone down slowly from 4.50%, but stopped there, this petition is to show that students are not happy that it is not decreasing even though inflation is, it is meant to go up at the same rate that prices do, prices are decreasing, the loans should decrease."

    This seems to have been written by someone who doesn't know how the interest rate is supposed to work.

    It's tempting to start a better one.
  • Sol00
    I was thinking that myself, if only to highlight the current issue - that they shouldn't stop the interest rate being linked to the RPI as it suits them.
    • Scrilla
    • By Scrilla 17th May 09, 4:22 PM
    • 239 Posts
    • 144 Thanks
    Scrilla
    As RPI inflation is down purely as a result of mortgage interest rates dropping and CPI is still significantly above the Bank of England target, this seems totally reasonable.
    Originally posted by Rafter
    What about when RPI was 4.8% and the CPI was 3.1% (with the BoE target at 2.9%)? Applying the same logic you have used, surely the interest rate for student loans should have been less than the 4.8% it was back then as this would only make it "reasonable".

    Targets are exactly that - a target. It does not represent the current climate. It is completely unreasonable for you to make a comparison and draw a conclusion based on how it relates to a target.
    • Neilhmtn
    • By Neilhmtn 17th May 09, 4:33 PM
    • 32 Posts
    • 20 Thanks
    Neilhmtn
    It's a very poorly written petition - the "more details" say:
    "The current student loan interest rate is 1.5%, but it is meant to be linked to RPI inflation which is negative, it has gone down slowly from 4.50%, but stopped there, this petition is to show that students are not happy that it is not decreasing even though inflation is, it is meant to go up at the same rate that prices do, prices are decreasing, the loans should decrease."

    This seems to have been written by someone who doesn't know how the interest rate is supposed to work.

    It's tempting to start a better one.
    Originally posted by anotherpaul
    Not only that, but someone with a poor grasp of English grammar and punctuation.

    Normally, I don't care about people's spelling or grammar ability as long as I can understand what they're trying to say, but this was presumably started by someone who went to university. Christ all-bloody-mighty. Can't they at least make an effort to pretend that having a university education actually means anything these days?

    I would have signed - although I have a pre-1998 loan, I don't like the precedent that this move sets - but I'm not even going to touch that petition with a sh**ty-stick.
    • PinkPig
    • By PinkPig 18th May 09, 6:06 PM
    • 250 Posts
    • 147 Thanks
    PinkPig
    I've just seen this and it makes me very angry. I took out my loan on the basis that I would always pay back the same, in real terms, as I borrowed. That's not what's happened here. The government claims that "not increasing" the 15,000 repayment threshold makes this better but frankly that's ridiculous - trying to make a bad decision sound better by saying "we could have done something else" doesn't cut it.

    I will be writing to my MP and I very strongly encourage everyone else to do the same thing.
    • CLAPTON
    • By CLAPTON 18th May 09, 6:14 PM
    • 41,650 Posts
    • 30,691 Thanks
    CLAPTON
    I've just seen this and it makes me very angry. I took out my loan on the basis that I would always pay back the same, in real terms, as I borrowed. That's not what's happened here. The government claims that "not increasing" the 15,000 repayment threshold makes this better but frankly that's ridiculous - trying to make a bad decision sound better by saying "we could have done something else" doesn't cut it.

    I will be writing to my MP and I very strongly encourage everyone else to do the same thing.
    Originally posted by PinkPig

    as you took out your loan on the basis that you would always 'pay back the same' , presumably you will be repaying the tax payers as the March 2008 RPI was 3.8% but you are now only paying 1.5%.
    or maybe not..
    • Scrilla
    • By Scrilla 20th May 09, 8:12 PM
    • 239 Posts
    • 144 Thanks
    Scrilla
    http://petitions.number10.gov.uk/Loansofstudents/

    This seems to be a better petition for those who want to sign.
    (I've not signed either pertition, just posting the information)
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