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Original poster

How can this be right? It isn’t . Martin Lewis on uni costs.

293 replies

Dowser · 28/01/2019 21:06

Watched Martin Lewis tonight as grandson is off to uni in two years.

So...it’s £9000 a year tuition
Then the highest living allowance is presently £8700 per annum

So...if your parents earn over £25k , your maintenance loan is reduced.
Some parents didn’t realise that they were expected to top up to the full amount
One poor lad was attempting to live on £4K . His parents hadn’t realised they were meant to top up

Then there was a young girl who had to leave uni because her mum got a new partner. The students loan went down from full to low and this guy who wasn’t her father, had only been with the mum was expected to pay for someone else’s child. I think there was a shortfall of £5k

Martin Lewis rang up the student loan company and was told it was correct.

He’s looking into it.
I was shocked at that.

OP posts:
Kazzyhoward · 30/01/2019 13:48

Repayments are exactly the same regardless of the size of the loan

Yes, but with interest added, you'll be paying the statutory repayments for longer if your loan is higher, hence paying more over the life of the loan due to the extortionate interest.

With a smaller loan, you'll pay it off sooner (assuming you're not a low earner), so will pay less interest.

Kazzyhoward · 30/01/2019 13:50

Most (about 80%) won't even pay off all the loan, let alone start paying off any of the added interest, before the loans are written off.

If that's true, then it's a very sad state of affairs as it means that 80% of uni students either earned less than the national average or only slightly more throughout the following 30 years. Just what was the point of Uni for them other than a jolly?

Duckswaddle · 30/01/2019 13:56

Similar when I went to uni in 2005, my parents had no money so I had 2 jobs on the go at the same time as studying. Not everyone has that kind of money to give their kids.

Interested in this thread?

Then you might like threads about this subject:

General money
ReflectentMonatomism · 30/01/2019 14:02

But what about when his earnings rise as he progresses through his career.

But what about when they go part time to have children, decide to have a career change to something that pays less well, opt to move to a lower-paying area because they met someone from there, have a child with special needs who needs funding, decide to throw in banking and become a vicar, decide to throw in being a solicitor to take up school teaching, decide to do a PhD at 45, etc, etc, etc (all of these scenarios from real life, some my own).

The parents I meet who want to pay the fees are convinced they can predict, with good certainty, the salary trajectory of their children over a 20-30 year horizon. I am less sanguine.

GreenTulips · 30/01/2019 14:02

Not sure how true this is but I’ve been told if an 18 year old marries then only their partners wage is taken into account and of both students neither has any money

Asta19 · 30/01/2019 14:04

Just what was the point of Uni for them other than a jolly

There are many careers for which you need a degree but where your earnings may never go much over 35/40K (unless you consistently go for promotion). Not everyone is driven by money. I work in the public sector and a lot of my colleagues prefer front line (the lowest paid) work. It gives them job satisfaction that they wouldn't get from being a manager (who actually doesn't earn much more anyway). The top band for that job is 36k, and you can't get the job without a degree.

ReflectentMonatomism · 30/01/2019 14:04

Just what was the point of Uni for them other than a jolly?

I think my education is of a value greater than my salary. It makes me happier. I’d sad that others don’t agree. My PhD has, overall, halved my income (I’m now a university lecturer). I don’t regret it for a second. You presumably think I was wasting my time and money.

SinceYouAskMe · 30/01/2019 14:50

In order to pay off your tuition fees (without interest in excess of inflation, or maintenance loan) you’d need to earn an average of 35,000 (or the inflation-adjusted equivalent) over all of your 30 years after graduation: putting you in the top 25% of earners. That’s quite a big ask even for your average graduate, and it’s a particularly big ask for women bearing caring responsibilities.

Weetabixandshreddies · 30/01/2019 15:04

These loans have historically been sold off to other companies. So who is responsible for paying off the lians (plus interest) at the end of the 30 years, if the student hasn't paid it off?

Presumably the company that then owns the debt will want someone to recompense them? Will that be the government paying off these huge sums of accrued interest?

titchy · 30/01/2019 15:11

If that's true, then it's a very sad state of affairs as it means that 80% of uni students either earned less than the national average or only slightly more throughout the following 30 years.

No it doens't. You're assuming that the original terms of the loan were based on someone had to earn at least average wage in order to pay their full loan back. That isn't the case at all.

titchy · 30/01/2019 15:14

So who is responsible for paying off the lians (plus interest) at the end of the 30 years, if the student hasn't paid it off?

No-one. When they are sold, they are sold at a cost that takes into account the fact that the majority won't be paid back. It's like buying a house for £1m. The market crashes and you have to sell to Fred for £500k. Fred then re-sells it on to Bob for £400k. Bob doesn't owe you anything just because he bought it for a lot less than you - the drop in value was reflected in the price he paid.

NewModelArmyMayhem18 · 30/01/2019 15:20

The difference with grants was that the grant allocated was based on sliding scale to reflect number of 'dependents' and other sibs in university at the same time. Most of the time I got minimum grant but one year DSibling was doing a degree at the same time and then I was getting almost a full grant (anyway considerably richer than at any other point in my undergraduate years).

I know a family with one child. Parents on low(ish) incomes but no mortgage (never had one as they bought their house outright) and savings that far exceed most but the wealthy. Their DD is eligible for bursaries and gets the full loan.

The system isn't entirely fair.

Suppose you had a family with a combined salary of £50K but three younger siblings at home (and maybe years left to pay on mortgage). How would be in the same category as a family with one child and no mortgage/rent to pay?

peppamum · 30/01/2019 15:24

www.bristol.ac.uk/policybristol/news/2013/30.html

This is an interesting calculation on repayment rates based on different salaries. It's shocking to think that someone who borrows £50k will pay back over £150k over 30 years (and still not technically have cleared the debt)

Weetabixandshreddies · 30/01/2019 15:38

peppamum

Those figures are shocking. Our poor children.

NewModelArmyMayhem18

But in your example the 3 people knew at the outset how much they were buying and selling those houses for.

In the case of the loans the company has bought the debt and sees the potential profit over time. They have no way of knowing if the debts will be paid off in full or if one student will never pay a penny back.

I suppose that they have calculated that they will still make a huge profit even if most of the lians are not repaid in full.

Dox · 30/01/2019 15:42

Parents who are confident of their 18 year old's long-term future earnings on the basis of the degree course they have been accepted on are off their heads.

^^ This.
DS2 did a Maths degree and came out with a first from a top uni. You might have thought he would end up with a highly paid job in finance but no, he went into teaching. Two years in and his earnings are still below the starting threshold.

CemetaryGates · 30/01/2019 15:58

"Tuition fees are abhorrent and education should be accessible to all."

The problem with that, @Redlocks28 , arose in part when people who had retired started deciding to do a degree. The free tuition was considered investment in youth that would be repaid in higher taxes from better jobs -but then retired people started doing degrees, because "why not? It's free and I've always fancied it!"

There is a saying, something about something free is perceived as worthless. I think a lot of people went to uni without really thinking about it, chose a random subject and spent a few years barely attending and faffing around.

Education should certainly be accessible to all, but it shouldn't necessarily be free to all after a person has reached adulthood.

ReflectentMonatomism · 30/01/2019 16:10

he problem with that, @Redlocks28 , arose in part when people who had retired started deciding to do a degree. The free tuition was considered investment in youth

A few years ago I was told by someone in a position to know that around two thirds of some OU humanities degrees were being taken by people who already had another degree. The same was true for some of the pure science degrees. I’m slowly doing an OU humanities degree, and I have a STEM PhD: it would be clearly ludicrous for the state to underwrite that.

justasking111 · 30/01/2019 16:17

If you look at the link I put up the other day about privatising the loans. Who is to say that the private companies do not move the goal posts one day 9% interest sounds good to them perhaps at the moment but what if the base rate climbs again?

daffobin · 30/01/2019 16:23

The problem really is funding degrees at ex polys. There is no way on earth that say Nottingham Trent should charge the same fees as UCL or Imperial for the same degree subject. I personally believe that university education at the very top universities, Oxbridge and the likes plus a few other courses such as medicine should be free. It'd increase competition and standards. The only problem then is that there would be complaints of the privately educated gaining it for free, therefore make top degrees free for a generous amount of people, but not the very wealthy.

Furrycushion · 30/01/2019 16:30

What rubbish! Teaching is frequently better at the "old polys" possibly because the elite universities are more interested in renting on their laurels & writing research papers.

Furrycushion · 30/01/2019 16:31

resting

NicoAndTheNiners · 30/01/2019 16:47

Goal posts can definitely change with regards to the loan. My ancient loan when I took it out was inflation only and rate was calculated on either rpi or cpi.....whichever is the lowest, I can't remember.

Then they were allowed to change it to the highest rate and it jumped from something like 0.5% to 4.5%.

titchy · 30/01/2019 16:51

They have no way of knowing if the debts will be paid off in full or if one student will never pay a penny back.

Of course they do! Do you think companies that buy billions and billions of pounds of assets don't have quants working for them?!

RomanyRoots · 30/01/2019 16:56

It's just another way of infantilising our young people.
At 18 they should be considered adults and not be held to a system that means Mummy and daddy have to invest.
No wonder Uni staff complain about parents at open days, and babying their dc, it's the stupid system.
FFs let them grow up and make their own way.

LoniceraJaponica · 30/01/2019 17:53

"No wonder Uni staff complain about parents at open days"

Do they?

DD wouldn't have been able to get to most open days without me - no thanks to Northern Rail. I ended up having to drive Hmm

I let DD take the lead, and talk to lecturers etc, but she still wanted someone to discuss stuff with (and a chauffeur)

Maybe I should have not allowed to go to open days then? And I assume the only teenagers you know are outgoing and confident Hmm