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    • setmefree2
    • By setmefree2 14th Dec 11, 4:59 PM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    Example.

    My son will be doing MEng in Chemical Engineering - 4 years plus 1 year industrial placement.

    Entered the following

    Fees = £9000
    Maint Loan = £3,900
    Years = 4
    Sandwich = Y
    Start Salary = £25k

    With the defaults (RPI=3% and salary growth = RPI+2% (5%)) I get the following

    Salary at 30 years = £108k
    Total to repay = £43,760

    But if I change to the following

    RPI = 6% and Salary Growth = RPI-1% (5%) I get the following

    Salary at 30 years = £108k
    Total to repay = £2,160

    The toatl to repay should be identical because the start salary and growth are unchanged, but it isn't so something isn't working correctly.

    Cheers,

    Nigel
    Originally posted by nheather
    http://www.moneysavingexpert.com/students/student-finance-calculator

    I think the calculator is best used by stripping out all the inflation by setting all RPI options to zero and (restrict average UK earnings to RPI) then just play with the salary increases and starting salaries.

    So as per your example borrowing £51,600 as above, with a starting salary of £25,000 and a salary inflation rate of 2% (in 30 years your son will be earning the equivalent of £45,290 in today's pounds), will make the cost of the degree £34,730 in today's pounds. So he will pay back less than he borrowed.

    Similarly, with salary growth of 3% (your son will be earning £60,690 in 30 years in today's pounds) the cost of the degree will be £50,620 in today's pounds.

    At salary growth of 4% (your son earning £72,090 in 30 years in todays pounds) the cost of the degree will be £69,920 in today's pounds.
    Last edited by setmefree2; 15-12-2011 at 7:20 AM.

  • cornishhalfpint
    calculator - variable course length
    hi,

    It would be really useful to have an option for a one year course as well - I am starting a PGCE in septmeber, and am trying to work out whether to take the maintenance loan as well as the tuition fee loan, and as the course is only 1 year olng, it doesn't help much with this calculation.

    I'm a mature student, and will be getting the full maintenance grant, as well as a bursary from the TDA (as it's for secondary maths, which is a shortage subject) and won't need the money, but as we were planning on getting a loan to buy a new car anyway, we were trying to see if this is the cheapest way fo getting a loan.
  • OrdinaryMum
    WARNING!

    There appears to be a significant error in the way the calculator works out total to repay. I have worked out the value manually and for a £25k start salary and a 5% growth, the total to repay is £100.6k not £43.7k as reported by the calculator.

    Okay, Dan has replied to my query. Apparently, it is because the calculator assumes that the £21k threshold will be increased by RPI+1% each year. So if RPI remains the at 5.6% over the next year then the 2013 threshold will be £22,400.
    Originally posted by nheather
    I also made up my own spreadsheet and came up with a similar wildly different result than the calculator.

    This is worrying as I am trying to get a reasonable guide as to whether it is better to take out the full loan and repay in the fulness of time - or whether to try and pay up front or repay a.s.a.p. to avoid the high interest of this loan.

    I tried adding in linking the lower repayment salary threshold to RPI. It makes a big difference. But I can't find anywhere that says that the lower threshold will be index linked - let alone RPI + 1%.

    So what about the upper threshold? That also makes a difference to % interest portion above RPI for a given year.

    We have been sent a declaration to sign but it is all about how we commit to repay and submit to the courts, etc.

    What about letting us know clearly these important details that might make 10s of thousands of pounds difference to the total amount repaid during the 30 years.

    This is leading a generation of students into a 30 yr long tunnel with no way out without letting them know what is at the other end.

    If anyone knows where to find any clear guidance about these issues (i.e. the linking of the lower / upper salary thresholds to RPI) I would be very grateful to know - because at the moment, the picture seems incomplete to me - and we don't have very long to decide whether to commit to this or not.

    Probably for many there is no choice but to go down the tunnel. In our case we are considering borrowing against our mortgage which is currently at 1.25% - (i.e. a lot lower than RPI +3%)!

    Anyone who has had a mortgage knows that it costs money to borrow money. I am just over 50 and haven't yet paid of the mortgage. It concerns me that under this scheme I would only just be paying off my student loan at this stage in my life - when I'm almost thinking about retiring - well not quite but ...

    Concerned parent
  • Dunroamin

    Anyone who has had a mortgage knows that it costs money to borrow money. I am just over 50 and haven't yet paid of the mortgage. It concerns me that under this scheme I would only just be paying off my student loan at this stage in my life - when I'm almost thinking about retiring - well not quite but ...
    Originally posted by OrdinaryMum
    Unless you're looking towards a very good pension, you're unlikely to be making repayments in retirement.
    • setmefree2
    • By setmefree2 9th Mar 12, 6:35 AM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    I tried adding in linking the lower repayment salary threshold to RPI. It makes a big difference. But I can't find anywhere that says that the lower threshold will be index linked - let alone RPI + 1%.
    Originally posted by OrdinaryMum
    I'm not sure what you mean by lower threshold. Do you mean the threshold at which Graduates have to start paying back their loan? If you do then I can quote you this from the BBC

    The threshold at which graduates have to start paying their loans back will rise from £15,000 to £21,000. This will rise annually with inflation.
    LINK



    If anyone knows where to find any clear guidance about these issues (i.e. the linking of the lower / upper salary thresholds to RPI) I would be very grateful to know - because at the moment, the picture seems incomplete to me - and we don't have very long to decide whether to commit to this or not.
    Originally posted by OrdinaryMum
    Lots of good articles here
    http://www.moneysavingexpert.com/students/


    Probably for many there is no choice but to go down the tunnel. In our case we are considering borrowing against our mortgage which is currently at 1.25% - (i.e. a lot lower than RPI +3%)!
    Originally posted by OrdinaryMum
    Don't! Read http://www.moneysavingexpert.com/students/should-i-get-student-loan


    I am just over 50 and haven't yet paid of the mortgage.
    Originally posted by OrdinaryMum
    Double don't!
    Last edited by setmefree2; 09-03-2012 at 6:37 AM.

  • OrdinaryMum
    Thank you for replying!

    I'm not sure what you mean by lower threshold. Do you mean the threshold at which Graduates have to start paying back their loan? If you do then I can quote you this from the BBC
    Originally posted by setmefree2
    Yes, I do mean the (earnings) threshold at which Graduates have to start paying back their loan?

    I had read the statement that this threshold (sometimes referred to as lower earnings repayment threshold) will be linked to inflation - specifically to earnings inflation.

    I have read this as you quoted on moneysavingsexpert, BBC and BIS. All of these informative sites state that the threshold will be linked to inflation. These sites also assume this "fact" in the online repayment calculators that are designed to help us decide whether we should repay sooner or not.

    However, I have not been able to confirm this on the Student Finance, Student Loans Company or direct.gov sites, or in the terms and conditions of the student loan.

    This factor would have a significant effect on the total repaid.

    The upper threshold (£41,000) also has an effect. If linked to inflation this would reduce the earnings related portion of the interest accrued in a given year. A higher upper threshold results in a lower portion, so if it is inflation linked then the upper threshold will be higher and the interest lower.

    Although I would like to think that moneysavingsexpert, BBC and BIS have the facts full and correct, I would also like to find evidence of this from the those who will actually be controlling the loan i.e. SFE, SLC, direct.gov.

    Often advice is given - "in most cases", "expect for a few" - we need the information in order to be able to work out whether we are one of those few who might end up paying a lot more - which incidentally seems to be middle earners.

    If anyone can point me to evidence of the linking of the lower (and upper) earnings thresholds to inflation on any of the loan or government sites, I would be very grateful.
    • setmefree2
    • By setmefree2 10th Mar 12, 8:25 AM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    Although I would like to think that moneysavingsexpert, BBC and BIS have the facts full and correct, I would also like to find evidence of this from the those who will actually be controlling the loan i.e. SFE, SLC, direct.gov.
    Originally posted by OrdinaryMum

    If anyone can point me to evidence of the linking of the lower (and upper) earnings thresholds to inflation on any of the loan or government sites, I would be very grateful.
    Originally posted by OrdinaryMum
    Sorry I don't think you will find anything. The government can vary the terms and conditions of student loans whenever they want, so I suppose government bodies are quite careful in what they say as this may be construed as a binding contract.

    If a future government decides to freeze, lower (or even raise) the thresholds it can do so. If a future government requires students to pay back more than 9% above the threshold it can do so. Ditto with interest rates. In this regard the SLs are like a tax.


    Student Loans A Guide to Terms and Conditions 2012/2013
    Your Responsibilities
    When you take out a loan, you will sign a declaration which will be a contract. This states that you have read and understood the Terms and Conditions. You must agree to repay your loan in line with the regulations that apply at the time the repayments are due and as they are amended. The regulations can be replaced with later regulation.
    How much you will repay
    You will not have to make any repayments at all while your income is under the applicable threshold. Any change to these thresholds, along with examples of repayments, will be published at studentloanrepayment.co.uk.
    http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@educ/documents/digitalasset/dg_200469.pdf

    Stinks doesn't it?

    Don't forget, however, student loans can (at the moment) be repaid without penalty at any point. So if a future graduate doesn't like any change in T & Cs, the loan can be repaid. Unless the government change this of course.
    Last edited by setmefree2; 10-03-2012 at 9:14 AM.

    • setmefree2
    • By setmefree2 10th Mar 12, 9:09 AM
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    setmefree2
    Looking at the T & C guide this bit made me laugh/cry

    SLC cannot:
    •Provide up-to-date loan balances; or
    •Make sure your repayments will stop at the right time
    Page 22

    http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/@educ/documents/digitalasset/dg_200469.pdf

    • The One Who
    • By The One Who 10th Mar 12, 9:36 AM
    • 2,368 Posts
    • 2,924 Thanks
    The One Who
    Is that not because it is done through HMRC's PAYE system, rather than the SLC themselves? You pay your taxes and then they give the money to the SLC.

    I think it is a tad scaremongering (and a little paranoid) to not take a loan because of the possibility that the government will change the terms of the loan. To my knowledge they haven't done that yet, even though there are currently a few different systems in place, all with different terms.
    • Lokolo
    • By Lokolo 10th Mar 12, 10:27 AM
    • 20,219 Posts
    • 15,399 Thanks
    Lokolo
    Is that not because it is done through HMRC's PAYE system, rather than the SLC themselves? You pay your taxes and then they give the money to the SLC.

    I think it is a tad scaremongering (and a little paranoid) to not take a loan because of the possibility that the government will change the terms of the loan. To my knowledge they haven't done that yet, even though there are currently a few different systems in place, all with different terms.
    Originally posted by The One Who
    The only change I know of is that with Post 1998 loans they are increasing the threshold with inflation.
    • nheather
    • By nheather 11th Apr 12, 9:55 AM
    • 19 Posts
    • 11 Thanks
    nheather
    Threshold Doesn't Increase ??????
    Still deciding how best to finance my son's university when he starts in October 2012.

    I have just been on the phone to StudentFinanceEngland to clarify two points.

    I spoke to Gordan Clarkson

    (i) Will there be early repayment fees? Emphatic NO, though he was unable to point to any place on the website or documentation that states this. But I'm fairly confident on this one as I have seen several non-SFE organisations stating this.

    (ii) The MSE calculator assumes that the threshold will rise each year in line with UK Average Earnings (or RPI+1%), is this correct? Emphatic NO. Once a student takes out a loan he remains on that threshold (currently £21k) for the full term. The threshold may well increase but that will only apply for new students. So each student has the Threshold value at the start of the loan and keeps it throughout the whole term.


    If this is true, then the MSE calculator has a serious flaw because it assumes that the Threshold will increase each year. If it does not, then the MSE calculator is significantly underestimating the total repayment amount.

    It does sound nonsense to me but the representative at SFE was adamant, no matter how often I questioned its sense.

    Can someone from MSE comment please?

    Cheers,

    Nigel
    Last edited by nheather; 11-04-2012 at 10:02 AM.
    • setmefree2
    • By setmefree2 12th Apr 12, 7:24 AM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    I have just been on the phone to StudentFinanceEngland to clarify two points.

    I spoke to Gordan Clarkson
    Originally posted by nheather
    (ii) The MSE calculator assumes that the threshold will rise each year in line with UK Average Earnings (or RPI+1%), is this correct? Emphatic NO. Once a student takes out a loan he remains on that threshold (currently £21k) for the full term. The threshold may well increase but that will only apply for new students. So each student has the Threshold value at the start of the loan and keeps it throughout the whole term.
    Originally posted by nheather

    All the calculators I have seen are based on the assumption that the thresholds will rise with average earnings. I've no idea - but I'm guessing - that this is what happens with the current thresholds?

    If the thresholds don't rise with average earnings that would change the numbers. However, at the lower end (at least) I think it will just mean that more of the debt is written off - the student will still pay back the same amount.

    I will try and find some time to play with some figures later.....got work to do ....

    Laters
    Last edited by setmefree2; 12-04-2012 at 7:54 AM.

    • nheather
    • By nheather 12th Apr 12, 8:17 AM
    • 19 Posts
    • 11 Thanks
    nheather
    I've no idea - but I'm guessing - that this is what happens with the current thresholds?
    Well upto recently, no.

    The current system was introduced over 10 years ago with a threshold of £15k. It has remained at £15k ever since.

    I beleive that last year a decision was made to start increasing the £15k threshold but I don't know whether this has happened yet.

    As I understand it, the MSE calculator is hard-coded with an increase of RPI+1% per annum, which is currently 4.7% (hands up everyone who has received a 4.7% pay rise this year?).

    Personally, I think the MSE assumption is wildly optimistic with the rate of increase plus we have have this report from Gordon Clarkson at SFE that the threshold won't increase at all.

    As an example. The MSE calculator assumes that Threshold will increase by RPI+1% each year. Let's set RPI at 3% (lower than it has been for a while, at typically as low as it has been for some years).

    Using the MSE assumption

    Year 1, Threshold = £21.0k
    Year 30, Threshold = £68.1k

    (a) I can't imagine it rising that fast. We have NEVER seen the government raise thresholds, allowances at this rate before.

    (b) Gordan Clarkson of SFE was admamant that for my son starting university in Oct 2012, the threshold will still be £21k in year 30. That is a massive impact if true.

    However, at the lower end (at least) I think it will just mean that more of the debt is written off - the student will still pay back the same amount.
    No not at all. I think it is pretty much agreed that few students will be able to repay the loan before it is written off and that therefore, the amount paid back is determined by salary and lower threshold alone.

    If salary is £45k

    at threshold = £21k, repayment = £2,160

    at threshold = £22k, repayment = £2,070

    So clearly, the total repaid will be higher if the threshold doesn't increase.

    Cheers,

    Nigel
    Last edited by nheather; 12-04-2012 at 8:37 AM.
    • setmefree2
    • By setmefree2 12th Apr 12, 7:54 PM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    Hi Nigel,

    Sorry I must have misread your post this morning.

    I have created my own spreadsheets and in these I have uprated the thresholds with average earnings ( I have assumed this is 4% pa).

    If I use the same spreadsheets and keep the thresholds constant at £21k and £42k I find that a graduate on a lower salary pays more (than with an uprated threshold) but pays their loan back quicker. In my scenario the graduate pays back their loan in 26 years instead of having it written off at 30 years. They pay £12k more. (Their loan is fully paid off with the fixed threshold and nothing is written off.)

    My middle and higher salary scenarios actually pay back slightly less with the fixed thresholds (from £1k to £2.5k in my scenarios) because they are paying their loans back quicker. The middle earner pays back about 4 years earlier and the higher earner a year earlier.

    What have other posters found?
    Last edited by setmefree2; 13-04-2012 at 7:23 AM.

    • nheather
    • By nheather 15th Apr 12, 9:05 AM
    • 19 Posts
    • 11 Thanks
    nheather
    Hi setmefree2,

    I find your findings hard to beleive. Every scenario and every calculator I have run points to it not being possible to pay off the loan within 30 years.

    This is based on the fact that at an interest rate of between RPI and RPI+3% then the interest is greater than the repayment. Look at the calculators - they clearly show that at the end of 30 years, even for a good career, the amount written off is bigger than the original loan - says it all.

    That being the case, if the low threshold (£21k at the moment) does not increase then the student will pay back more over his career. The only way it could be possibly less, is if the extra he is paying is so much that it overcomes the interest.

    As for the threshold increasing with inflation. Personally I think it is intended to and that SFE have been poorly advised. The major problem I have is with the lack of T&Cs. Dan from MSE has responded and said that he got the information from the Department of Business. I've seen articles (linked above by the BBC). But if I look at the SFE or Department of Business websites there is nothing. I have yet to find anything formal or contractrual saying that it will increase - in fact I have had the SFE emphatically say the opposite.

    Another point is that all I've seen is that the Threshold will increase with inflation. Is that CPI, RPI, or Average Weekly Earnings. I beleive the MSE calculator assumes RPI+1% which is extremely optimistic in my view. I suspect Average Weekly Earnings will be used - this is often less than CPI and RPI, and at the moment is possibly close to Zero or even negative. Hands up who can say that their pay increases by RPI+1% each year - not many, I bet.

    It's all very sloppy. If the banks put out a service like this then the FSA and Government would be all over them, hauling them over the coals (PPI for example). But it's one rule for the banks and another for the Government who are permitted to offer financial services in a very sloppy way.

    And another thing that makes my blood boil. People are very quick to point out to me that if you earn less than £41k then the interest rate isn't RPI+3% it is between RPI and RPI+3% on a sliding scale. If you earn less than £15k then it is RPI --- true EXCEPT

    whilst at university and almost a year following graduation, students are hit for the full RPI+3% even though the vast majority have earning much less than £15k - criminal.

    There are so many students and parents that I talk to who beleive that when they leave a three year course they will have a debt of £27k. They don't beleive me when I say it will be more like £31k (at current RPI = 3.7%). Add in a £5.5k maintenance loans and and their debt will have increased by £6k over the 3 years whilst they were studying.

    Had the rate just been just RPI (in line with earnings below £15k) then the interest accrued during the study would have been half at £3k.

    Cheers,

    Nigel
    Last edited by nheather; 15-04-2012 at 9:09 AM.
    • setmefree2
    • By setmefree2 16th Apr 12, 7:40 AM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    Hi setmefree2,

    I find your findings hard to beleive. Every scenario and every calculator I have run points to it not being possible to pay off the loan within 30 years.
    Originally posted by nheather
    I'm not sure why you say this since the MSE calculator, for example, shows many scenarios where the debt is cleared within 30 years?

    As for the threshold increasing with inflation. Personally I think it is intended to and that SFE have been poorly advised. The major problem I have is with the lack of T&Cs. Dan from MSE has responded and said that he got the information from the Department of Business. I've seen articles (linked above by the BBC). But if I look at the SFE or Department of Business websites there is nothing. I have yet to find anything formal or contractrual saying that it will increase - in fact I have had the SFE emphatically say the opposite.

    Another point is that all I've seen is that the Threshold will increase with inflation. Is that CPI, RPI, or Average Weekly Earnings. I beleive the MSE calculator assumes RPI+1% which is extremely optimistic in my view. I suspect Average Weekly Earnings will be used - this is often less than CPI and RPI, and at the moment is possibly close to Zero or even negative.
    Originally posted by nheather
    Disgraceful. I totally agree.

    It's all very sloppy. If the banks put out a service like this then the FSA and Government would be all over them, hauling them over the coals (PPI for example). But it's one rule for the banks and another for the Government who are permitted to offer financial services in a very sloppy way.
    Originally posted by nheather
    Totally agree. I have no idea why MSE/ML isn't more critical but they/ he seems intent on ignoring all flaws in the system?

    And another thing that makes my blood boil. People are very quick to point out to me that if you earn less than £41k then the interest rate isn't RPI+3% it is between RPI and RPI+3% on a sliding scale. If you earn less than £15k then it is RPI --- true EXCEPT

    whilst at university and almost a year following graduation, students are hit for the full RPI+3% even though the vast majority have earning much less than £15k - criminal.
    Originally posted by nheather
    Totally agree.

    There are so many students and parents that I talk to who beleive that when they leave a three year course they will have a debt of £27k. They don't beleive me when I say it will be more like £31k (at current RPI = 3.7%). Add in a £5.5k maintenance loans and and their debt will have increased by £6k over the 3 years whilst they were studying.

    Had the rate just been just RPI (in line with earnings below £15k) then the interest accrued during the study would have been half at £3k.
    Originally posted by nheather
    All true. But this seems to be popular with voters so what can you do?



    So what do you intend to do? Are you going to pay upfront?

    • nheather
    • By nheather 16th Apr 12, 9:41 AM
    • 19 Posts
    • 11 Thanks
    nheather
    So what do you intend to do? Are you going to pay upfront?
    I don't know and time is running out to make a decision.

    If all goes well then my son is going to do a 4 year course with an additional 1 year industrial placement.

    This means his total loan (excluding any fee increases with inflation) could be

    £36.0k (fees)
    £14.0 (maintenance loan during normal years)
    £2k (fees during industrial placment)
    £1.7 (maintenance loan during industrial placement)

    About £54k

    Depending on which assumptions hold true total repayment could be anywhere between £67k and £150k.

    Now my wife and I are fortunate enough to be able to fund his education out of our earnings so that is one option we are considering. But our frustration is that the 'loan' does not give a clear indication of what we are likely to pay back, so unlike a normal loan we are finding it very difficult to make a reasoned decision.

    I'm not sure why you say this since the MSE calculator, for example, shows many scenarios where the debt is cleared within 30 years?
    Really, can you give me one - a sensible one.

    If I just bung in 3 years at £9k, starting salary of £25k, rest as defualt that doesn't pay off in 30 years - loan = £27k, repayment = £43.7. Even setting RPI to 0%, and it doesn't pay off within 30 years.

    I have to set the starting salary to £37k before the loan pays off just before the 30 years is up - loan = £27k, repayment = £111k.

    The only way of paying off the loan within 30 years in the calculator is to have very high starting salary and/or increments. The penalty then, seems that you will pay back an awful lot more.

    Cheers,

    Nigel
    • setmefree2
    • By setmefree2 17th Apr 12, 7:18 AM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    This means his total loan (excluding any fee increases with inflation) could be

    £36.0k (fees)
    £14.0 (maintenance loan during normal years)
    £2k (fees during industrial placment)
    £1.7 (maintenance loan during industrial placement)

    About £54k

    Depending on which assumptions hold true total repayment could be anywhere between £67k and £150k.
    Originally posted by nheather
    Does this take into account inflation? Is the £54k now and the £150k in 35 years time?

    Also, if you invested your £54k at just 3% interest you/your son would have approximately £150k in 34 years time. At 4% you/he would have £210k. At 5% £295k.

    Compound Interest calculator here
    http://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php#results

    http://www.fool.co.uk/Your-Money/guides/the-miracle-of-compound-returns.aspx

    (The above doesn't take into account inflation, of course, and if inflation is rising quickly the purchasing power of your money may well be fallng.)

    Now my wife and I are fortunate enough to be able to fund his education out of our earnings so that is one option we are considering. But our frustration is that the 'loan' does not give a clear indication of what we are likely to pay back, so unlike a normal loan we are finding it very difficult to make a reasoned decision.
    Originally posted by nheather
    So totally frustrating. We all need a crystal ball . Also, to muddy the waters further, there is the opportunity cost attached to using the £54k for university education. Would the £54k do better elsewhere? Also, as ML points out in scenario 3 - if you are going to give your son £54k would it be better to use the £54k as a deposit on a property? Maybe it would be possible to fund both?

    Also, are you sure your son is going to be a high earner? What if your son's plans change? What if your son wants to do a Masters or a PHD? How will you/he fund that? Will you/he have to borrow commercially? Will you/he wish you'd taken the cheaper more flexible government loans when you/he had the chance?

    Do you and your wife have your own retirement covered? Do you have enough emergency savings? Are you mortgage free?

    Really, can you give me one - a sensible one.
    Originally posted by nheather
    The thing I've found is "a good wage" means different things to different people. A good wage in the north is not necessarily so in London for example. Maybe you can make a couple of spreadsheets of your own, to cover your own circumstances. There is a template here that might make this quicker.

    http://www.bbc.co.uk/news/education-12767850

    About half way down the page on the right.
    Last edited by setmefree2; 17-04-2012 at 8:09 AM.

    • nheather
    • By nheather 17th Apr 12, 3:38 PM
    • 19 Posts
    • 11 Thanks
    nheather
    Exactly, you have described all the sort of thoughts going through my head that is making it so difficult to come to a well-reasoned decision.

    On top of that my son has Asperger's Syndrome. He is academically bright in maths and science but lacks social, communication, creative and soft skills.

    I guess you have to have a positive outlook and assume that he will do well, but I also find myself thinking "actually he could really struggle at university without our support, he could struggle to find work up against others with more confidence and character, and if he gets work he may not be able to maintain it or climb the ladder".

    Terrible thoughts, but if I am objective and think of him not being my son then I do have very genuine concerns.

    Of course I hope that he blossoms and and goes on to have a very happy life and successful career.

    Two opposite sides of the coin, one where I would consider financing his education and one where I would say go for the loan.

    Unfortunately, the current loan system rewards failure, laziness and apathy - do badly, for whatever reason, and you don't have to pay back much (or anything).

    Does this take into account inflation? Is the £54k now and the £150k in 35 years time?
    No inflation. Just the difference between the threshold increasing at RPI+1% (repay £67k) and the threshold not increasing at all (repay £150k).

    The thing I've found is "a good wage" means different things to different people.
    Don't think so. I'm talking about starting salarlies of £40k+ and rising rapidly to be able to clear the debt. I don't think anyone would deny that this is a good salary whether they are in the North or South.

    You still have answered my question. You said that there are plenty of examples where the loan is paid off within 30 years and I asked you to give just one. I just asked you to make it sensible - for example a start salary of £50k with an increase of 10% per annum will obviously pay it off but I don't consider that sensible or realistic.

    Cheers,

    Nigel
    • setmefree2
    • By setmefree2 17th Apr 12, 3:56 PM
    • 8,862 Posts
    • 19,042 Thanks
    setmefree2
    You still have answered my question. You said that there are plenty of examples where the loan is paid off within 30 years and I asked you to give just one. I just asked you to make it sensible - for example a start salary of £50k with an increase of 10% per annum will obviously pay it off but I don't consider that sensible or realistic.
    Originally posted by nheather
    With the MSE calculator one scenario is the following:- borrow £9k tuition fees and the minimum maintenance grant of £3.5k pa (which is all a lot of students can get). Starting salary £25k, RPI 3%, salary growth RPI + between 4% and 5%, average UK earnings growth RPI+ 1% - then the loan will be paid off before 30 years (about 27).

    Same scenario on "your" great big fat starting salary of £40k, RPI 3%, salary growth RPI+4%, average UK earnings RPI+1% - then the loan will be paid off in 19 years.
    Last edited by setmefree2; 17-04-2012 at 6:29 PM.

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