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)

I don’t recognise this scenario at all. Everyone I know has paid theirs off and we all graduated early 2010s, and none of us has kids yet. London based so higher salaries, which speeds up repayment, I suppose.

I would be astonished if it turned out the cohort that graduated in 2007 with £1k/year fees mostly still have outstanding student debt. I think your social circle might be the exception. Did you have several long maternity leaves? Do you all work part-time?

I don’t recognise this scenario at all. Everyone I know has paid theirs off and we all graduated early 2010s, and none of us has kids yet. London based so higher salaries, which speeds up repayment, I suppose.

Statistically you are the unusual ones. Most people do not pay back their student loans in 10ish years.

I made the choice to go to university and take the debt. I’m in a professional role, make 60k a year with prospect for further promotion and have paid my loan off. My parents couldn’t afford to help me either so I took all the loans at Uni.

My alternative was probably an unskilled job for much less money and living my life on a lower wage. It’s the only debt where they won’t charge you if you don’t make enough money. I made the right choice for me. Encourage your daughter to think very carefully about this. When I got my first graduate job, they took £30 a month or something for the loans. It’s barely noticeable coming out of your paycheck.

I've only just paid mine off at 42.

As one of the PP who said “it’s money you don’t miss”… I’d politely disagree.

I’m a tax adviser. You’d struggle to find anyone else who is more aware of the tax they pay than me, or indeed who spends more time thinking about income tax in general. I’m currently checking daily for my P11d so I can do my tax return (to confirm that the calculation I’ve done on the tax I think I’m due to pay isn’t far off).

But student loan, tax, national insurance … I can’t do much about it and so I don’t think of it as money I had and paid over, because that would drive me insane given once pension is factored in over 50% of my salary doesn’t make it to
my bank.

This is the same / slightly better than pre 2006 loans 9% payable on salary just over 22k and not written off until age 65. Feels like a big additional tax mine just keeps growing.

I don't want to stop anyone considering retraining as a teacher, but do consider the ageism. I retrained at 50, a long time ago, and was never called for an interview. SLTs don't much like second career teachers as far as I can see. Too confident and too challenging to manage by fear. At 50, you really don't care what the HT thinks so you aren't as malleable as a 25 yo.

This will disproportionately affect the disabled who can't work to pay themselves through uni.

But it doesn't matter because what everyone on this thread has missed is the actual changes to student finance from 2024 is that you only get 4 years of finance across your whole life. Full stop. For level 3 and up.

So anyone looking to retrain can't, or if you do a 4 year undergrad such as a Mphys or Mchem or Mmath can't then train as a teacher, which will make the science/maths teacher shortage worse. No doctors. No architects. Not unless you're from the right family with enough money.

It's terrible and I was hoping this thread was going to discuss it. Especially as it disproportionately advantages the generation who already benefitted from free fees as they never had any student finance before while those of us who got screwed through the nose for fees and maintenance loans are going to be screwed for the rest of our working lives and never be able to retrain.

My DD and her DH both overpaid their student loans to clear them before having children. She said they would not have been able to afford childcare with loan payments. Both all paid off now though.

@pinguins
please can you link to where it says you can only have 4 years total funding, including L3 and medicine?

I agree - A well educated society is good for everyone not just the individuals concerned.

It’s a significant difference per this is money:
https://www.thisismoney.co.uk/money/bills/article-10552055/What-new-student-loan-repayment-rules-affect-graduates.html

”Laura Suter said: 'For many graduates the changes would mean the amount they pay back is more than double than under the current system.

Someone with a loan of £45,000 on a starting salary of £30,000 would pay off almost £31,000 under the current system, but that would rise by £40,000 to £71,500 under the new system.

'What's more, assuming they leave university at the age of 21, they will be paying off £320 a month in their final year of the loan at the age of 61.

The new system would only benefit very high earners, who would pay off their loan faster and so incur less interest over the term of the loan, but also benefit from the lower, flat-rate interest rate under the new system. For example, someone on a starting salary of £50,000 would pay off almost £117,000 under the current system, but only £62,000 under the new system.

'That will be of little comfort to the average graduate, who won't earn anywhere near that amount when they leave university. Suter added that the impact of loans continuing for longer will dramatically impact people's personal finances as it will mean less money towards pensions, longer-term savings or paying off the mortgage.”

Thank you, I also agree student loans are not a tax by any definition.
The “graduate tax” is a bit of sly marketing in my opinion.
Student loan debt is debt. Just because it had unique repayment terms the debt is written off after 40yr (nee system), that doesn’t make it not a debt.

In fact, I’d argue the repayment terms are terrible as they are designed to keep low/average earners in debt by setting the repayments below the amount of interest accruing. So the debt keeps growing.

We do need to see it as a tax because its unfair to say that kids can make fully informed descisions on this kind of debt. That's not to say that none can or that none will have opinions, but we are expecting 15 and 16 year olds to make choices about lifelong debt whilst being under huge societal pressure to go to university.

It's not even normal debt, its debt which can't be written off during bankruptcy or included into debt payment plans if things go very wrong for them at some point.

In reality many parents make the decisions for their kids on this, and understandably so, but it isn't them who will be responsible for it in three decades time.

I feel very sorry for my son's friend who due to poor advice from college and family circumstances had to take a gap year and will be starting this September rather than last September.

He will be getting the full maintenance loan. As always it is those from poorer backgrounds who will end up paying the most. My son on minimum loan will have far less to pay back than his friend will.

You should tell her that on average, graduates still earn more and are more likely to be homeowners than non graduates. Also she is a woman, high paying non graduate jobs like plumber/tradesmen are still unfortunately dominated by men. Unless she has a solid plan, many non graduates end up in minimum wage work. A lot of graduates end up in bad jobs too but at least in an office environment and in a big corporation, there is scope to move up.

https://ifs.org.uk/publications/impact-undergraduate-degrees-lifetime-earnings
https://www.rightmove.co.uk/news/articles/property-news/graduates-are-more-likely-to-pass-the-first-home-ownership-test/#:~:text=Nearly%20seven%20out%20of%20ten,%2Dgraduate%20degree%20(30%25).

Rich people don't think of the costs and they do whatever it takes to succeed. Which is why they get richer. It is painful for those with limited means but that doesn't mean that they should just give up.

I had 4 part time jobs for around 10 hours each per week. I worked evenings, nights and weekends. Sometimes finishing work at 5am and then heading in for lectures/placements from 9am.

Like I said difficult but was necessary for me to do what I wanted.

But it wasn't Blair in power when the polys changed to Unis. It was 1992 from memory as I had that as my gap year and Manchester Poly had changed to Manchester Met by the time I got there in 93. You can blame him, or Gordon Brown, for tuition fees being introduced as that happened on their watch!

This is happening in 2025 I believe. The lifelong learning entitlement I think!

It doesn't include Masters loans though, they still remain separate.

@ReadingSoManyThreads couldn’t agree with you more. You did it. I did it. My sister did the same intensive degree as I did (mentioned on this thread a few times as being ‘impossible’ to do and work PT - never mind FT hours). My sister did it with 2 under 2 when she started and a PT job. You make it work if you have to!

Indeed. From this website https://review42.com/uk/resources/uk-student-debt-statistics/

"The number of people that have repaid their total student loan debt in the UK since it was established in 1998 is 991,500, representing only 19.3% of all people that are liable to repay."

I actually agree about some degrees not being worth the paper they're written on but to class all Humanities/arts degrees as less worthy of leading to less income than medicine/science is ridiculous.
For a start the number of medical degrees is capped and cannot increase. We train the correct number of doctors to fill the jobs that are out there. We just can't keep the doctors because pay and working conditions are shit so lots are emigrating or moving into other graduate jobs.
I fully expect my child doing a Humanities course at Cambridge to earn significantly more than all of his friends doing medicine for at least 10 years and possibly for life. (not that income is the be all and end all by any means but that was the context that was being discussed by the poster suggesting only medicine and science are worthwhile).
(I have a medicine degree and am still working in the role whilst watching the profession haemorrhage overseas...)

Should say "or" leading to less income not "of".

Can't really be mad at this, I'm 39 and pay back 9% when earnings over 22k I think
So that actually makes them better off than I was then