Student loan interest - an absolute disgrace (6 Viewers)

[robbiekeane]

Would these be the same student loans that were first implemented under New Labour by any chance?

I don't have a problem with student loans themselves as long as they are nominal interest rates and reasonable fees. As grendel mentioned it's more of a graduate tax but this is ridiculous and it's a big step in the wrong direction towards the US system which is crippling.

 

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[robbiekeane]

The student loan is a tax on future earnings - it’s not prohibitive to the poor

Yes "AND"
- That tax is 9% at anything over around 28k depending on plan. The average salary in the UK is 38k (mean) or 32k (median). So, if you aspire to earn an average UK salary you will be paying a significant amount of "tax" on that. The opportunity cost of this 9% is massive over a lifetime and can have a significant impact on future wealth. You're right it is not prohibitive in terms of immediate access to the poor but it certainly keeps a division between classes.
- it's a very slippery slope

 

[SBAndy]

£500/mo off my salary makes quite a big difference thanks.

Does the amount change dependent on the interest rate charged?

 

[shmmeee]

Does the amount change dependent on the interest rate charged?

The length of time I’m paying does. My post grad loan has barely gone down in five years of paying it. It’s fucking depressing.

 

[SBAndy]

What's the point in this change then? What's the point in student loans as the govt essentially writes them off after a few years

A) there hasn’t really been a change so to speak, it’s just happened due to inflation having spiked.
B) in the same way as they provided Bounce Back Loans, it gives them some ability of recouping a portion of the funding rather than it being 100% government-backed. I’m sure the expected impairment of such a scheme will be sat at >30%.

 

[SBAndy]

The length of time I’m paying does. My post grad loan has barely gone down in five years of paying it. It’s fucking depressing.

Yeah I get that, but in the grand scheme of things I wouldn’t expect it will make a huge difference. Out of curiosity, are you forecast to pay off the loan in full?

Edit: I should add, I also have a student loan that is being repaid and it’s a pain in the arse so I understand where you’re coming from.

 

[Sky Blue Pete]

The length of time I’m paying does. My post grad loan has barely gone down in five years of paying it. It’s fucking depressing.

That’s a lot!!! On what salary unless that’s too personal

 

[shmmeee]

That’s a lot!!! On what salary unless that’s too personal

No I don’t mind: £70k, with post grad and under grad loans. It’s not putting me in poverty but I’d be lying if I said it didn’t grate.

 

[shmmeee]

Yeah I get that, but in the grand scheme of things I wouldn’t expect it will make a huge difference. Out of curiosity, are you forecast to pay off the loan in full?

Edit: I should add, I also have a student loan that is being repaid and it’s a pain in the arse so I understand where you’re coming from.

Im not sure. Does it tell you on your account anywhere? I can’t see it. Been paying my undergrad loan for almost 20 years but on a much lower wage and it’s just over two thirds gone IIRC, post grad I’ve been paying for almost 5 years and it’s gone down 20%. So on those figures I’d expect to pay it off.

 

[fernandopartridge]

They weren't written off, the pre 2012 loan books were sold to dodgy debt collection companies with no provision for the existing terms to be maintained which resulted in aggressive pursuit of money owed. The companies involved were regularly in trouble with the ombudsman for dodgy practices.

Yes exactly, the government has sold the debt for pennies in the £ at that point, ergo writing most of it off

 

[SBAndy]

Im not sure. Does it tell you on your account anywhere? I can’t see it. Been paying my undergrad loan for almost 20 years but on a much lower wage and it’s just over two thirds gone IIRC, post grad I’ve been paying for almost 5 years and it’s gone down 20%. So on those figures I’d expect to pay it off.

Ok, in which case it sounds like you’re one of the people who will be affected by the changes. Fair enough, like I said I expect most won’t but not all and I get why you may be particularly peeved by the changes.

For the record, I don’t think it says anywhere, no.

 

[Sky Blue Pete]

No I don’t mind: £70k, with post grad and under grad loans. It’s not putting me in poverty but I’d be lying if I said it didn’t grate.

That’s a lot mate.

 

[Sky_Blue_Dreamer]

Yes exactly, the government has sold the debt for pennies in the £ at that point, ergo writing most of it off

But if that's the case, why didn't they write it off for the students rather than selling it to a debt collector, who by nature they know will pursue it vigourously? You're taking the hit anyway, so take the political goodwill from writing it off.

Basically, they've got very little from it, the ex-students are much worse off and angry at their treatment and prospective students are put off having seen what is happening to those who went before them.

 

[SBAndy]

But if that's the case, why didn't they write it off for the students rather than selling it to a debt collector, who by nature they know will pursue it vigourously? You're taking the hit anyway, so take the political goodwill from writing it off.

Basically, they've got very little from it, the ex-students are much worse off and angry at their treatment and prospective students are put off having seen what is happening to those who went before them.

My guess is that they didn’t want the infrastructural cost. Whether that’s right or wrong is a different matter.

I really don’t see that it’s a barrier to entry though. If anything, it’s something that younger people need far more education around. The issue as I see it comes back to the Americanisation of culture, with TV shows, for example, referencing that parents have to save to put their kids through university. I know a Financial Advisor who has clients saving to put their kids through uni and I really don’t see the point.

 

[shmmeee]

That’s a lot mate.

What pisses me off and maybe I’m being unreasonable is I feel like I’m being punished for choosing a decent degree. If I’d got an arts degree and earned bugger all my education would cost me less despite being valued the same at point of “sale”.

 

[Sky_Blue_Dreamer]

What pisses me off and maybe I’m being unreasonable is I feel like I’m being punished for choosing a decent degree. If I’d got an arts degree and earned bugger all my education would cost me less despite being valued the same at point of “sale”.

I agree. Considering they're supposedly trying to push STEM, they really are making it an unattractive long term proposition.

The entire system needs a rethink, whereby less emphasis is put on things like uni in subjects where it's unnecessary and greater kudos is given to technical and vocational achievements. Same end goal, different route.

 

[shmmeee]

I agree. Considering they're supposedly trying to push STEM, they really are making it an unattractive long term proposition.

The entire system needs a rethink, whereby less emphasis is put on things like uni in subjects where it's unnecessary and greater kudos is given to technical and vocational achievements. Same end goal, different route.

I mean I’d pay more in tax anyway. I’d rather they bumped higher rate up a bit.

 

[duffer]

Would these be the same student loans that were first implemented under New Labour by any chance?

Would these be the same student loans that were first implemented under New Labour by any chance?

Firstly, not quite, as above these ones were designed by a Tory government.

Secondly, who's in charge now, with the power to do something about it?

I thought your pathetic excuse for keeping Boris in office was that there's too much to do to get rid of him. Are you saying your Tory Government can't do anything about this?

In fact is there anything other than a bit of military support for Ukraine and sending the 'wrong kind' of refugees to Rwanda that they can do?

Typical Tory. Deflect, deflect, deflect...

 

[Deleted member 5849]

What pisses me off and maybe I’m being unreasonable is I feel like I’m being punished for choosing a decent degree. If I’d got an arts degree and earned bugger all my education would cost me less despite being valued the same at point of “sale”.

What pisses me off is inverted degree snobbery

 

[chiefdave]

What pisses me off and maybe I’m being unreasonable is I feel like I’m being punished for choosing a decent degree. If I’d got an arts degree and earned bugger all my education would cost me less despite being valued the same at point of “sale”.

Further education in a nutshell. Its about making money not about preparing a suitable workforce that matches the nations requirements.

 

[Sky Blue Pete]

What pisses me off and maybe I’m being unreasonable is I feel like I’m being punished for choosing a decent degree. If I’d got an arts degree and earned bugger all my education would cost me less despite being valued the same at point of “sale”.

Does it really?? It’s a genuine investment in your life isn’t it?

 

[fernandopartridge]

Further education in a nutshell. Its about making money not about preparing a suitable workforce that matches the nations requirements.

Agree that formal education should not be for profit, disagree that education is for preparing people for work, this sort of line is what lead us to tuition fees in the first place

 

[shmmeee]

What pisses me off is inverted degree snobbery

Well this is an argument against marketisation of degrees full stop. Learning shouldn’t be tied to income potential really. But if I’m being asked to pay back more if I earn more then you’re being subsidised for taking less marketable degrees, which isn’t fair and is a perverse incentive economically.

 

[chiefdave]

Agree that formal education should not be for profit, disagree that education is for preparing people for work, this sort of line is what lead us to tuition fees in the first place

there's defiantly benefit to academia but I'm not sure there's a lot of benefit to having hundreds or even thousands of people studying things like media studies or music management when there simply aren't the jobs available. The knock on impact is that those type of industries now have a huge percentage of staff who are unpaid interns.

 

[shmmeee]

Does it really?? It’s a genuine investment in your life isn’t it?

It is. But I can’t now take a philosophy degree or whatever and have it paid for by the tax payer. Everyone should pay the same (ideally £0), I shouldn’t have to pay more because my passion/talent is worth something in the economy IMO. While also paying more taxes for more people to sit around and read poetry or whatever for three years then go into an entirely different career. My sister did Dance and works in HR, why should the government subsidise that but not my love of computing?

These are the problems a commercial higher education setup creates.

 

[SkyBlue_Bear83]

Does this only affect plan 2 student loans?

My understanding it's only relevant if you will earn enough in the 30 years to pay it off before it is written off.

I've seen some high earners(70k+ annually) talking about taking a loan/adding it onto the mortgage at a lower interest to pay it off early.

 

[Deleted member 5849]

Well this is an argument against marketisation of degrees full stop. Learning shouldn’t be tied to income potential really. But if I’m being asked to pay back more if I earn more then you’re being subsidised for taking less marketable degrees, which isn’t fair and is a perverse incentive economically.

The incentive is making more money.

 

[rob9872]

Firstly, not quite, as above these ones were designed by a Tory government.

Secondly, who's in charge now, with the power to do something about it?

I thought your pathetic excuse for keeping Boris in office was that there's too much to do to get rid of him. Are you saying your Tory Government can't do anything about this?

In fact is there anything other than a bit of military support for Ukraine and sending the 'wrong kind' of refugees to Rwanda that they can do?

Typical Tory. Deflect, deflect, deflect...

It was a direct response to education being privileged and elitist, but you knew that, as usual taking it out of context and pretending to be thick.

 

[duffer]

It was a direct response to education being privileged and elitist, but you knew that, as usual taking it out of context and pretending to be thick.

If it was a direct response to something, then why didn't you put that in your pithy one liner implying that it was all New Labour's fault (and seeming implying that it's nothing to do with this Government)?

Bit lazy mate, perhaps you're taking your work ethic from party-animal Boris?

Anyway, back to the specifics. The Government's own analysis of the changes is here:

Higher education reform: equality impact assessment - GOV.UK (www.gov.uk)

The Guardian's analysis of that document is here:

England student loan changes will hit poor hardest, official analysis finds | Students | The Guardian

And the New Statesman summarised it all in a graph here:



So, basically, if you're poor and/or in a disadvantaged group you're going to end up paying more.

You're a Tory Rob, and a supporter of Boris and his cronies through thick and thin.

I'm a bit thick, as you say, so please explain to me how this change is in any way fair? Feel free to link to your own evidence.

 

[Grendel]

If it was a direct response to something, then why didn't you put that in your pithy one liner implying that it was all New Labour's fault (and seeming implying that it's nothing to do with this Government)?

Bit lazy mate, perhaps you're taking your work ethic from party-animal Boris?

Anyway, back to the specifics. The Government's own analysis of the changes is here:

Higher education reform: equality impact assessment - GOV.UK (www.gov.uk)

The Guardian's analysis of that document is here:

England student loan changes will hit poor hardest, official analysis finds | Students | The Guardian

And the New Statesman summarised it all in a graph here:

View attachment 24387

So, basically, if you're poor and/or in a disadvantaged group you're going to end up paying more.

You're a Tory Rob, and a supporter of Boris and his cronies through thick and thin.

I'm a bit thick, as you say, so please explain to me how this change is in any way fair? Feel free to link to your own evidence.

I’ll try again.

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

 

[rob9872]

Again misrepresentative. I didn't say the govt weren't involved, nor that they couldn't change it. I replied to a post that said education wasn't for everyone as if cost was a barrier. I merely pointed out that it began under New Labour so hardly elitist.

I also fail to understand how it costs anyone more since you only pay back when you're earning more and therefore have dragged yourself out if poverty through education. Surely that's a good thing?

Fwiw I never did agree with opening up degrees to so many via polytechnics being rebranded to so many places, diminishing the genuine achievements. When only a small percentage went, it meant more. So many pointless degrees in anything and everything, that you're then competing against high numbers to get the same postgrad jobs and without any real experience. Imo better off working from A levels unless you're chosen profession has entry barriers without a degree.

 

[duffer]

Again misrepresentative. I didn't say the govt weren't involved, nor that they couldn't change it. I replied to a post that said education wasn't for everyone as if cost was a barrier. I merely pointed out that it began under New Labour so hardly elitist.

I also fail to understand how it costs anyone more since you only pay back when you're earning more and therefore have dragged yourself out if poverty through education. Surely that's a good thing?

Fwiw I never did agree with opening up degrees to so many via polytechnics being rebranded to so many places, diminishing the genuine achievements. When only a small percentage went, it meant more. So many pointless degrees in anything and everything, that you're then competing against high numbers to get the same postgrad jobs and without any real experience. Imo better off working from A levels unless you're chosen profession has entry barriers without a degree.

So many assumptions here it's hard to know where to begin. I can't really misrepresent a one line comment. But hey ho, at least we've got to the point where we can agree that the current government is responsible for its own policies.

So let's keep it simple.

This government's proposal means that if you're poor and/or in a disadvantaged group you're going to end up paying more for your degree than if you're rich. Is that fair or not?

 

[rob9872]

So many assumptions here it's hard to know where to begin. I can't really misrepresent a one line comment. But hey ho, at least we've got to the point where we can agree that the current government is responsible for its own policies.

So let's keep it simple.

This government's proposal means that if you're poor and/or in a disadvantaged group you're going to end up paying more for your degree than if you're rich. Is that fair or not?

No.
Everyone pays the same rate and the same amount back. If they earn less they pay over longer so accrue more interest but that's true however rich you are as it's earnings related. Not sure why that's so difficult for anyone.

 

[Grendel]

No.
Everyone pays the same rate and the same amount back. If they earn less they pay over longer so accrue more interest but that's true however rich you are as it's earnings related. Not sure why that's so difficult for anyone.

he’s an idiot why bother

 

[Sky_Blue_Dreamer]

Agree that formal education should not be for profit, disagree that education is for preparing people for work, this sort of line is what lead us to tuition fees in the first place

I agree to an extent, but more needs to be done in the education sector (and in employment) to make sure that those jobs that are important but don't attract people to them do. I know the market is supposed to do that but it doesn't appear to be working particularly well.