Augar report: lower university fees, return of grants etc

[whistl]

Has anyone been hearing the news today about the newly published Augar report?

[OKBobble]

You caved!

[whistl]

It seems like quite big news to me...

[[https://www.theguardian.com/education/2019/may/30/least-well-off-students-should-get-3000-pound-grants-to-stay-in-education-says-theresa-may-backed-report] Guardian Report on Augar recommendations]

[whistl]

www.theguardian.com/education/2019/may/30/least-well-off-students-should-get-3000-pound-grants-to-stay-in-education-says-theresa-may-backed-report

[OKBobble]

There is a lot of facebook mumbling about it costing more due to lower threshold, longer 40 year teem, but none of the articles nor MSE have mentioned recommendation 6.6 which says "Introduce a new protection for borrowers to cap lifetime repayments at 1.2 times the initial loan amount in real
terms. This cap should be introduced for all current Plan 2 borrowers, as well for all future borrowers."
This is a very positive thing as it in effect caps the total you can pay back.

The grants, lower fees, calling it student contributions instead of debt is all just a way to alleviate the "fear of debt".

Overall especially bearing in mind the funding now available for adults to get gcse and A levels or level 2/3 qualifications is a good thing.

My worry is they won't get all the good parts through and just the headline grabbers!

[OKBobble]

Yes that is one of the articles I read qhicb doesn't mention the cap which I consider to be one of the main positives as it negates the effect of compound interest currently applied.

[OKBobble]

Which not qhicb!

[whistl]

MSE has this Okbobble:-
The total repayment is to be capped at 1.2 times the original loan (in real terms)
This is an innovative proposal. In effect it means for every £10,000 of loan, the most you will have to pay back is £12,000 in real terms. 'Real terms' means inflation is factored out, so while the cash amount you repay may be far higher than 20% more, you won't pay more than that in current prices.

One of the reasons for doing this is that a current quirk of the system means that while in general the more you earn, the more you repay, there is an exception for extremely high earners. They can end up repaying substantially less because they repay so quickly that less interest accrues. The cap on total repayments means it is less likely that high-earning graduates repay more than extremely high-earning graduates.

This isn't just about those at the top end though. Anyone who borrows less, on shorter and cheaper courses with lower maintenance, is protected too. Currently, mid-earners with lower borrowing can end up paying quite a bit more than they borrowed because they are clearing the loan slowly.

[NicoAndTheNiners]

Martin Lewis isn't impressed.

Seems to think most students will pay back more due to a lower repayment threshold and longer repayment period. So even taking into account lower fees and possible lower interest they will be ultimately worse off.

Seems like a way of increasing repayments/revenue but with the added spin of dressing it up as a fee cut.

[OKBobble]

Martin Lewis's little video talk doesn't mention the cap and I had hoped he would as I think it a really good move. I am glad the mse website does then.

[OKBobble]

Nico - the 1.2 x borrowing alleviates those so I was a bit surprised he didn't mention that.

[NicoAndTheNiners]

Oh ok, so the cap makes it a good thing?

Will they bring it in for courses starting in sept then!? 😁👍

[OKBobble]

Luckily the cap will apply to even the current loans as well as the post 2021 loans so will benefit those starting this year and 2020 which wi be under current system - that is assuming the recommendations are implemented!!

What's the guessing that happens??

[NicoAndTheNiners]

God if they can't even sort something as important as Brexit out I don't have much faith over this!

[celtiethree]

Martin Lewis has updated his response to cover the cap. The cap will mostly benefit high earners who currently are likely to pay more than extremely high earners who pay off their debts quickly. For lower to middle earners who wouldn’t have paid off their debt anyway the impact of the changes is negative as they start to repay earlier and pay for 40 years, so probably for all of their working lives they will pay an additional 9% of ‘tax’ on what they earn over the threshold.

Martin Lewis also states that the changes would not be retrospective but only apply to loans for the year 2021 onwards.

www.google.co.uk/amp/s/www.moneysavingexpert.com/news/2019/05/editorial-comment--the-augar-report-heralds-the-end-of-student--/amp/

[celtiethree]

Analysis by the times; teachers/nurses who would currently pay back nearly £15k would pay back just short of £27 under the new system. High earners drop from £55k to £37k

www.thetimes.co.uk/article/highest-earning-graduates-the-big-winners-of-proposed-fee-changes-dktpwqcxv?shareToken=a7d15e203ab763a4b65cebcd01b21b3b

[NicoAndTheNiners]

Hmmm, well if they're making the system worse it seems wrong they can change it for 2021 onwards. Students starting this year will be scuppered for at least one year, more if doing medicine, vet, architecture, etc.

So dd will have two years on the old system of high interest and then another 5 years on the new system of having to pay it back for longer! So stuffed from both sides!

[Hortz]

Martin Lewis gave evidence to the committee who have produced this report. They appear to have ignored most of his points. The high earners gain and the middle earners - teachers and nurses lose.
Glad to see they are going to make the parental contribution clearer.

[titchy]

Current plan b students benefit from the 30 year limit though, and it was recommended that the 1.2 cap is applied to current plan b - which means they potentially get a great deal.

Very worried about the removal of funding for foundation years though - utterly detrimental to widening participation. and I'm going to have to redraft our APP

[SummerSt0cks]

Fat lot of good making parental contributions clearer will be. Telling parents they’ve got to give £5k a year won’t make it happen. If the average wage is £29k £62 household income which is the threshold for the lowest maintenance loan isn’t huge. I have 3 kids v close in age would love to know where I’m supposed to find £15k a year from.

Don’t get why they can’t all borrow the full amount, it’s ludicrous.

[titchy]

Summer if you're household income is under £25k you're not expected to fund anything. You only contribute £5k if you're income is over £60k.

Same as it's been for 50 years!

[SummerSt0cks]

£60k combined house hold income isn't unusual or huge.A lot will be just over.£5k per year per child isn't that easy to just cough up. That's £15k over 3 years and if you have kids close in age it's eye watering.

Don't get why they can't borrow the full amount.

[titchy]

Because it costs way too much. I don't know why everyone always moans about parents contributing - it's not like they haven't known since their kids were born.

Yes I get it's hard going - I've got two at uni for the next two years (and am having to matched bet to fund it...), but we've always known.

[SummerSt0cks]

You knew when your child was born it was going to uni.

It’s neither here nor there, you have the money you have. If you can’t afford it you can’t affird it. You can’t just shake the money tree and get £45k drop into your lap. Many won’t have been earning that much whilst their dc were growing up so won’t have been able to save. Families don’t generally have £45k worth of spare cash lying about when raising kids.

[Lemonmeringue33]

Brexit will continue to suck the life out of any future government and the civil service and I seriously doubt whether there will be any bandwidth to implement this.

[SummerSt0cks]

And what happens to those students whose parents can’t or won’t pay it?They’re 18 it shouldn’t be anything to do with their parents.The students who are allowed to borrow it or who will now have a grant and rich students are going to have a much easier time of being a student. It’s not a level playing field for those student stuck in the middle. Fat lot of good it is helping one group if you disadvantage another.