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)

Yes you can if you want to

This also affects people who want to retrain in later life. Predominantly that means women, and recruits into teaching and health which are common destinations for mature students. Oh well, we don’t need any more nurses or teachers anyway do we.

These changes were announced ages ago.
Do you not think people should invest in their own education?
And yes, degree apprenticeships are awesome

How can you save up for tuition fees when you can’t even save for a deposit to buy a house if you are paying rent? I take it you’re from the classes that can depend on support from mum and dad? There aren’t enough of you to staff and fund the entire country when the rest of us can’t do anything.

Help your daughter understand that it's not a debt, but a graduate tax?

There’s a lot who haven’t paid a penny back, left uni had a baby work part time and don’t earn enough to pay it back. Wonder what will happen to these people when their kids are all grown, and they decide to work full time, and they get hammered for money they owe from 20 plus years ago, that’s the scary bit imo

Are you talking about funding her at university or her paying back her student loan?
If it’s the latter then if she ends up in a minimum wage job she won’t pay anything back. If she ends up earning £200k she will have to pay back a lot, but then she will be earning a lot so she can afford it.

Exactly. I would show your dd the figures above. £37.50 based on a 30k salary is peanuts. It’s a decent takeaway for 2.

Sorry if I’m missing something but hasn’t it always been 9% over the threshold? I’m sure when I graduated in 2009 I was paying 9% over earnings of £15k?

To some extent the loan bit doesn't worry me. In theory they should earn more than they would without a degree (although not guaranteed, and I thinking apprenticeships are looking more and more appealing).

What really freaks me out is the realisation that with 3 kids and very little spare income, we still apparently earn too much for them to get full loan and will be expected to top it up. And with inflation I imagine that even if we manage to do that they will still have to work too just to get by.

It’s simple. You tell her she can go work for a few years and save as much as she can and if she wants to go to uni later then that’s fine!

we don’t have to go to uni as soon as we finish school. Education is a life long activity not something we should cram into the start of our lives.

But they'll still only pay 9% of their earnings above the threshold. They won't pay more because they owe more.

My DD1 has amassed £64,000 of student debt to achieve her MSc.
She works for the NHS (clinician) and has no concerns over her loan repayments. In fact she has just bought a 4 bed house with her similarly situated partner, not bad for 27. It is just a fact of life for that generation. Education is a privilege.

I'm one of these, pre having DD I finally earned enough to be paying a bit more than. The interest each month, since I went on May leave I've been part time and just earn under the threshold.
I can't imagine ever working full.time again so will prob never pay it back
I won't encourage DD to go to uni unless she wants to do something for which you need a specific degree but steer her more towards degree apprenticeships and the like

It’s impossible to earn enough to pay fees and study full time.

I do think it’s an effective massive tax increase that has the potential to hold the younger generation back when they are trying to establish themselves and buy a house etc (in fact it’s now a tax for 40 years so really all of their working lives). I’m going to save for dds so they are not saddled with this.

To add though, I went in 2000 so my debt was only £15.5k so even if I did start to.pay it back I won't be 'hammered' because won't be earning mega bucks 😂

Most young graduates I i know think nothing of spending £100 on a night out. Taxis. drinks, meal. What some of them spend on festivals and holidays makes my mind boggle.
£38 a month on £25k is only spending £10 less per night out over a month for example/

Agree it should be seen as a graduate tax not debt.

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
Loans taken out between 1998 and 2006 don’t get written off till you’re 65, so for most students that’s a repayment period of well over 40 years. In fact students who took out their loans after 2006 will have them written off a decade earlier than those who took out their loans in 1998.

I started uni in 98. Mine is Plan 1, so the threshold is £22,000, you pay back 9% over that and it’s only written off once you reach 65.

It's in effect a graduate tax. You really don't notice it as you have never had it.

I don't understand what's changed? I'm on plan 4 and pay 9% on anything I earn over £25k.

I graduated in 2010 and will probably never pay back my loan because the interest is more than my repayments.

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

Define 'Mickey Mouse Subjects'

It has always been 9% over the threshold yes (or at least since the tuition fee increases in c.2005?) - the difference is that the threshold for band 2 (started uni 2012 or after) was pretty high, about £27500, whereas for the new starters its £25k and I think they've said won't be increasing with inflation for at least a few years.

So this years students, and after, will be paying more, earlier, at a higher interest rate and for longer (because loan is now not written off until 40 years rather than 30) than those older than them

I don't think it's the repayment part that's the issue - if you accrue a debt you SHOULD have to repay it, and this is still much more generous terms than most.

It's the high total amount compared to even 15 years ago, much higher interest rate (I graduated 2009 too and at one point interest on my s loan was 0%, theirs will be more like 6/7% and start accruing that years before they even become eligible to pay it back), and whether many of them get anything close to value for money - I know people are against monetising education but when you start charging this much it's not unreasonable to ask a) whether you need your degree b) if you get the same back from the uni for your 9k tuition if you study english as you do medicine.... (obviously not, humanities subjects basically subsidise the others)

Thank you for explaining!

I worked full time hours alongside my degree for the 6 years I was at uni. The degree I did is traditionally considered very intensive. I had several part time jobs to make it flexible around study. Yes it was tough. Yes there were times I was exhausted. But I wanted to go and my ‘working class council estate’ family couldn’t afford to help support me. I also got a scholarship from my uni for 3 years. I was the first in my family to go. Difficult but possible.