to want to teach the MNetters some basic economics about higher education funding

[witchwithallthetrimmings]

but don't know where to start. there is so much wrong thinking here not only about the economics (the costs and benefits and how they are shared) but also about the facts.

okay but i do have to go, my point is essentially that SOME people think
a) that student debt is bad
b) that most people are worse off than they would be had they not gone to uni
c) that tuition fees have to be paid before graduation

I can't be expected to wade through thousands of words.

I would like 10 bullet points. Thank you in advance.

I think you'll find that not everyone thinks any of the above, particularly point c.

in fact, does anyone think tuition fees have to be paid off before graduation?

i didn't say they did poorly but there are posts that imply these

Student debt seems like it's bad - especially when other generations got their degree basically for free and you've been brought up with the idea that the only 'worthy' debt is your mortgage.

If you have £20K+ worth of debt then surely you are worse off then before you went? Although you are hopefully better educated.

No the fees don't have to be paid before graduation.

don't think any of those points
I do know you are rather smug though

I think there is some confusion around the practical differences between a student loan and a graduate tax. Some people think that the student loans are equivalent to other sorts of debt, and champion a graduate tax, but in practical terms student loans and debt are nothing alike. There are no charges until you are earning a set amount, only inflation - no interest, no payments if you are off work for whatever reason, no effect on a mortgage application or credit rating and you control how to pay it back.

The idea that a graduate tax would be a better option is often voiced but never backed up with any arguments that seem to fully grasp how minor a student loan is compared to a normal loan. In fact, the majority of the arguments against loans actually apply better to graduate tax. There are threads on here where people seem to be reacting hysterically to the idea of being in (student) debt and therefore not affording to go to university at all. I think that is all the OP means and is trying to be reassuring, but I might be completely wrong. It is mainly the newspapers that encourage the hysteria, not mumsnetters.

To those who are scared, it is worth realising that paying £20k at 18/21, you don't have the same commitments as you do now. In one year of work before university I had saved up half of that and would have broken even with summer wages during term time. Worst case scenario as I see it is having to work for a year or two first/ having children at home for an extra year or so while they save up. I don't think this is so bad, it might even make university a more considered decision instead of the easiest next step from school. This is off topic though, I think it is just meant to be about explaining debt/loans/graduate tax - not solutions.

a) I think student debt is bad. Not as bad as virtually any other kind, but still worse than no debt! Especially if we include under 'student debt' debt run up on loans and credit cards to pay for living expenses.

b) Some people are worse off for going to university. Imo, too many people don't seem to get much benefit out of university, and this should be changed. That doesn't necessarily mean university is a bad option, just that, currently, it isn't the best option for all the students who go.

c) Not seen anyone say this?

I think you are perhaps being a bit simplistic - though if that's just because you're in a hurry to get out of the house, I do understand.

lol edam

Sorry - just to query runner. There is interest isn't there? Maybe not at the moment due to the low base rate but usually? I'm sure ds's letter says interest is accrued from the day the loan is paid to you.

Runner did you have parents who you were living with at the time ? Not every one has that. 10K is a lot to save over and aboe living expenses, even if only for one person.

I think that, for most people, student debt is bad.

I was lucky that I scraped in to a free higher education before those new labour bastards started charging. I would not have gone to university if there had been fees, because I would have been terrified of the debt and my (single) mother earned too little to pay for me but too much for the government to consider us 'poor'. As it was, I still had to choose a university in my hometown and stay at home during my degree.

I feel absolutely horrible that other bright kids from similar backgrounds to me won't be able to go university because, frankly, tens of thousands of pounds of debt is a crappy thing to have to start out your adult life with. Sure, some graduates go on to earn loads (and they pay higher rate income taxes for that) but not all graduates do. The salary for nurses, for example, makes the thought of huge debts really quite unpalatable.

runner: student loans may not affect your ability to apply for a mortgage etc, but you would have to consider the repayments when working out what you can afford to pay in your mortgage etc.

Looking forward to powerpoint presentation, cos I is fick.

In response to your OP, yes, YABU because you seem to have neither the time nor the skill to do it.

And have made wild generalisations about who needs 'educating'. People are entitled to their opinions about debt, and whether higher education is 'worth it'.

Blimey, I'm not impressed by your analysis.

A. Is a matter of opinion - it's rather rude of you to say anyone who shares the majority opinion is thick (I imagine most people think no debt is preferable to debt).

B. Clearly some people are worse off - they may not be the majority but they do exist.

C. Never heard anyone on MN saying this.

For c. - IME you do pay tuition fees before graduating, in the UK at least. In fact, IME you had to pay the tuition fees for the year before you could even matriculate.

runner, remember that you're also losing earnings for 3 years if you go to university. My very bright schoolfriend didn't go for precisely that reason - her dad runs his own business and he was struggling just then, so she couldn't have afforded to go even if it had all been free.

i think she means that you don't have to pay off the loan for the fees before graduating.

The first part of the fee loan is paid to the university in the January/February for a course starting the previous September.

you do have the option of paying them all up front if you have the money too. But I'm sure no one thinks you have to pay off your loan before graduating.

Student debt isn't like other debt. Why not see it as an investment in your future? I think what might end up happening is that children from lower income homes may be discouraged from applying to go to university because of the prevailing attitudes they are surrounded by rather than a genuine inability to pay. That is a pity.

runnerbean
no charges until you are earning a set amount, only inflation - no interest, no payments if you are off work for whatever reason, no effect on a mortgage application or credit rating and you control how to pay it back.

I'd like to challenge you on this as i have a student loan of over £20,000 from my degree (in the UK) and am currently being charged out £50/ month interest. This is what is states on my statement. If it isnt interest would you like to explain that to the loans company.

Also re mortage application: it depends on the provider. I tried to apply for a mortage about 5 years ago with my now ex thankfuckwedidntgetit and was told that due to the high amount of student debnt between us that we would be elligable for a good rate on the mortage as we were at higher risk of defaulting

Would i have been better off not going to university. yes. I would have probably have done practical training instead and not be stuck with a very very expensive piece of paper that hasnt helped me to get a job. Would everyone be better off not going to uni - nope some people are better off. But there is no way that everyone should be forced into the uni route because it is going to be better for them.

IME the people who are happiest with their lives are those who struggled at school and got apprenticeships. Although i lost touch with the academic high flyers and there may well be some amongst them who have everything they ever wanted.

If for c she's referring to student loans, then the OP needs to be educated on the difference between tuition fees and student loans

But it is a risky investment. It is perfectly possible to go to university and find when you get out, you're not in a good position to find a job and are in fact competing against 18-year-olds fresh out of school. If you go to university, get a job paying about 15k and never get to earn much more, you may well feel it was a poor investment.

Any investment is a risk, and some people don't want that hanging over them, or can't imagine how they would cope if it all went wrong.