Just wow at the student loan changes… eeek

[juliajo]

Students beginning university study this year upon completion of their studies will have to pay back 9% on earnings above £25,000 (aka, almost all full time wages now pay rises have been granted - national living wage is not far off that even if you decide to work in a supermarket after going to uni). It will now need to be paid over 40 years too so most of your working life, right through the expensive mortgage years and childcare years etc

I think this is catastrophic tbh and removes some of the incentive in education. I really hope schools spend time making sure cohorts fully understand the financial implications of university study, and think really carefully about what subject they choose. It’s a huge decision to make at 16/17 (when applying)

So about £38 a month if you earn 30k?

Seems manageable to me.

Nearly everyone I know is still paying off SL during our ‘expensive years’ of mortgage and childcare, and I graduated in 2007.

Aren't most people paying back student loans during the childcare years ?

It's fine. Stop catastrophising.

Also many parts of the UK still have professional roles under 25k so many graduates won't even reach the threshold for years. Check out the SW for instance

Marketing Exec (Cornwall) role requires degree and 5 years experience: £23k

Junior Data Analyst (Somerset): £22557 to be exact.

Scientist at the Met Office: £24k

Same here

My 15 year old daughter has already told me she’s not going to uni because she doesn’t want to be saddled with debt for the rest of her life. She’s one of the top performers in her class. It breaks my heart but what can I do? I can’t possibly pay.

I feel for her I really do, it’s her generation who have it worst

What does she want to study? Degree apprenticeships could be an answer

I think the point is that putting the effort in to get a good education and take on a higher level role should pay off. It will now make it even more likely that the financial benefit of going to university will be lost for even more people.

This mostly will impact those who are relying on education to try and better their lives who aren't fortunate to have family wealth to fall back on. It will reduce social mobility even more because there will be even less routes out of poverty.

It’s ok

Not as bad as it seems. This article is a bit out of date but still applies

https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/

Absolutely this. It's already shit. In fact, I pay more than this now on plan 1 repayments as the repayment threshold is currently lower.

The 40years thing is 5yrs longer than now, but that was always going to happen when fees shot up so much

I pay more than this now on plan 1 repayments as the repayment threshold is currently lower.

Yes me too. Plan 1 repayment threshold is about £21k

It's around £200 surely.

Nearly everyone I know is still paying off SL during our ‘expensive years’ of mortgage and childcare, and I graduated in 2007.

isn't the cost much higher now though?

You’ve put it perfectly in that last paragraph

Or alternatively an effective tax rate of 41% for anyone earning over £25k with a degree.

That's only about £3k over minimum wage at 40 hrs a week.

(20% tax, 12% NI and 9% student loan)

Maybe a bit less okay sounding?

Sorry to be clear here, an effective marginal tax rate*

If it stops people mucking about for theee years studying Mickey Mouse subjects then it's not a bad thing.

You can do really well at work as a high achiever, without going to uni. You can get support to study later in life when it's more affordable and won't carry such a debt burden.

I'm uni educated, one of my sons is and doing well enough to pay it off early, the other dropped out and will be paying it back the rest of his life.

Uni education shouldn't be practically universal imo. Wait til you know what to do, then do it!

Am I right in thinking you can't pay off the loans early now?

On 30k you pay 9% of the 5k that's above 2lthe 25k cap.

I agree with you @juliajo this is pretty shit for future students. The debt burden is too high and for too long.

It depresses me how much UK kids have to pay compared to many in Europe.

No.

£30,000-£25,000 = £5,000
9% of £5,000 = £450
£450/12 = £37.5

Very reasonable.

I have honestly never thought about the £450 I’m paying off my student loan per month, until I got the letter to say it’d be paid off within the next year and so now I’m looking forward to the ‘pay-rise’ when it’s done.

Yes it’s a debt, but not one you ever really see, and not one that makes a big impact unless you are a high earner (and you miss it a bit less then as you need it less).

If she's really good there are still bursaries and things, I would look around when she knows what she might want to do if she went. and then decide at the time depending what options there are. Will you be able to pay any of the fees to reduce her debt? My DD working through the holidays covered most of her accommodation and we paid some of the fees.

Living at home if the Uni is near would also help. Not available for many but I know people who bought a house in the Uni town for accommodation for their DC and let out the rest of the rooms.

Maybe the alternative is to save up and pay for university at the time you are there then?. Hopefully people will think twice about doing the pointless degrees that are out there.

This will be impossible for 18 year olds from some backgrounds. You can’t work full time alongside full time study