to set the record straight on tuition fees

[happiestblonde]

Okay, following another week of violent protests by students who probably haven't actually read the coalition's plans for tuition fees I think someone needs to put facts out there.

1. NO ONE PAYS UP FRONT. Not students, not parents, regardless of family wealth. So no students ever pay, only graduates on decent incomes.
2. With the current system graduates start repaying tuition fees once they earn £15k. This is not much money.
3. The coalitions proposals mean graduates (not students, not their families - so being from a 'poor' background shouldn't matter) once they earn over £21k. Even then they only pay back 9% of income OVER 21k.
4. With the new system all students actually pay £45 less per month because of the rise from 15k to 21k.
5. Most students now take out loans for tuition fees. Their parents do not pay. My father didn't pay for mine despite being able to quite easily because it is my own debt. Therefore the argument that it harms poorer students does not stand - the new proposals entirely remove the burden for payment to GRADUATES earning over £21k per year (and even then they will pay very little per month).
6. If you lose your job or quit work you stop paying.
7. There will be a lot more money put in for poorer students and a rise in maintenance grants, just in case poor students are disincentivised because they don't understand the proposals
8. If students don't pay, who should? Is it not 'fair' that those who are earning more as a result of their degree should pay back the cost of it? Why should a single mother, pensioner, or another young person who hasn't had the chance to go to university foot the bill?

Sorry if patronising, I presume most mners know this but trots like Aaron Porter seem to be taking over the dialogue and I find it wildly irritating. The coalition proposals are more 'progressive' than the current system.

Oh and Labour brought in top up fees.

Growl.

Not everyone chooses to do nothing; all student finance have is a paying / not paying form: how do they define between someone choosing not to use it, or someone like me who became a carer and is studying in the meantime (at own expense) to follow a different, still graduate path?

I don't think for a second that MA routes should be paid for whilst undergrads still struggle; despite struggling with my own MA costs.

What confuses me more is how people who happily benefitted from free study themselves despite quite often staggering family incomes can feel so free to pull back a ladder to success that they promised to maintain.

Medusa there does have to be a cut off somewhere but it's awful that your DD is struggling. Part of the problem for many as well, esp. locally, is that past year's graduates are still in the part time jobs so they haven't been freed up for this year's intake..... makes it harder to cope.

Most univertisities find accomodation for students, Warwick does, my son pays no deposit only the rent per term which he would pay if he stayed on campus which you arent allowed to do in year 2.

He has a room with ensuite for £70 a week, the students pay all bills relating to the property too.

"But it's not debt is it? Not really?"

Yes, it really debt.

It has to be paid back and it accrues interest.

If the interest only accrued when you were in a position to pay then that would be something at least.

But all this bullshit about "you only pay when you earn a good wage" ignores that fact that all that time you know that what you owe is growing and growing and growing, putting more pressure on you whenever you do start paying.

It doesn't sound like you really understand very much about debt.

Or financial incentives.

Agree with LookToWindward, it would be better to think of it as a graduate tax than a loan, while it is technically a loan it isn't comparable in any way to commercial loans or mortgages. The way it will work in practice is much more like a very small proportionate increase in income tax for graduates with reasonably well-paid jobs. Most will hardly notice the difference.

For that reason I don't see why it should mean graduates are driven to get the best paying jobs rather than the most interesting/useful/suitable ones - at least not any more than they are already! If anything shouldn't it be the opposite, as the more you earn the more you pay back. There's no urgency or even need to get it all paid off.

I don't like the big increase in fees and I would love it if we could have 'free' higher education like my parents generation did - but given that's not possible now, and students have to pay somehow, this seems like a very easy and non-punitive way to do it!

"Thought my son was doing OK after getting a first in engineering at a top university and going into investment banking."

You see where this leads?

Highly qualified talented engineers (of which there is a shortage in this country) going into fucking investment banking, which has already brought the country to the verge of bankruptcy.

"If anything shouldn't it be the opposite, as the more you earn the more you pay back. "

But it isn't the opposite.

The more you earn, the faster you will pay it off, so the less interest you will have to pay.

Because it is a LOAN. Not a graduate tax.

"but given that's not possible now, and students have to pay somehow"

Well if you buy that, I guess it's easy to see why you think that a student loan is not a loan.

Thats exactly where my son is going, 7 months left and already has his job in investment banking.

It is where the money is.

I think if your kid is going to University it should be one of the top five in their chosen subject, employers do take note of where you got your degree when allocating jobs to new grads.

Well it depends how you look at it, personally I wouldn't even worry about total amount and interest etc, just at the amount to be paid per month (that's what I mean about it being more like a tax than a loan, although technically it is a loan). It seems to me the worst possible outcome is you pay effectively a very slightly higher income tax for whatever portion of the rest of your working life you spend earning a good salary. That doesn't seem like a disaster to me. The amount you pay per month has nothing to do with the total amount or interest accrued.

I really can't see how this is going to have much impact on most people's lives, except for some psychological 'burden' related to knowing the total amount owed. Maybe it would have been better to go all the way and make it a graduate tax, if the name is such a problem.

Spidookly.
Sorry but his dad is a Cambridge graduate engineer and his uncle (dads brother, Cardiff graduate)is an investment banker.
He looked at the lifestyle difference and followed his uncle!

I see my student loan very differently to other loans and credit cards. I've stopped paying any repayments since I had my first child as my income was reduced and tbh I will probably only work p/t in the near future so I'm unlikely to repay anything for years. I couldn't do that with a credit card! It will probably get written off before I ever repay the total amount.

I agree with Ephiny that much of it is a psychological effect. My friend has the same financial liability and situation as me but she worries far more. I just check my statements once a year and then forget about it.

I understand debt very well thank you - I just happen to know what I'm talking about.

"But all this bullshit about "you only pay when you earn a good wage" ignores that fact that all that time you know that what you owe is growing and growing and growing, putting more pressure on you whenever you do start paying."

Well no - because if you manage to hit 55 it gets written off. And the interest rate that does apply to it will be vastly lower than any commercial product.

I don't see how its putting any pressure on anyone.

If you get a job and if that job pays over £21 000 then you will pay see an additional small deduction on your payslip. If you don't repay it all by the age of 55 then it gets written off. If you do repay it then you get a small amount extra in your payslip every month. Where's the problem?

I don't necessarily agree with the policy as its being talked about at the moment but all this "we'll be crushed under debt" guff is rubbish.

1. The repayment is deducted at source so the average graduate will never even notice it - you can't miss what you never had.

1. There is no requirement to repay when your circumstances fall below those required.

1. If we take a thirty grand salary the average graduate will have £70ish taken from their monthly salary. This falls to less than £30 a month at 25K. Hardly a huge amount.

1. If you get to 55 and the debt is still outstanding it is written off. If you die before the age of 55 it won't be repaid from your estate - unlike any other debt.

1. It has no bearing on credit history, score or whathave you. It is not recorded with any credit agency and has no impact on obtaining a mortgage or other commercial credit product.

So, yes it is debt in that it an amount that has to be repaid and it accrues interest but for all those reasons listed above it really isn't debt.

As I say, I think the government should have just introduced a graduate tax and be done with it.

"1. The repayment is deducted at source so the average graduate will never even notice it - you can't miss what you never had."

WTF?????

Are you out of your mind?

Only complete morons don't factor in payments deducted at source.

You should go and work for the CSA.

£30 a month is a lot of money.

Our household income is way above that and I would notice losing £30 per month.

Even if they tried to fool me by cunningly taking the money out at source!

cardiff's pretty good though in fairness.

Yes top five is ideal but lives are more complex- however I do see the need to get my MA to make me as employable as a graduate from elsewhere. I am not particularly complaining either: the MA fees are far lower than the extra costs living elsewhere would have accrued.

Bearcat

I don't blame him.

But it's shit for the country.

"Only complete morons don't factor in payments deducted at source."

Why?

You budget according to your take home pay surely?

My gross pay is a nice number but the figure I care about is the number in the "net" column.

Let's take an example - graduate starts working and earns £20K pa. Gross is £1650 pm. Take home is approx £1200 pm.

Graduate gets a payrise to £24K. Gross goes to£2000 pm. The 3k on top of the threshold attracts repayments at £270 pa which equates to about £23 a month so take home is £1375 instead of £1400. But graduate was never took home the £1400 to appreciate the loss of that £25.

Obviously it's bit more complicated than that once you start talking about higher tax rates and so on but the premise is sound.

So here's a question - if it wasn't a student loan and instead was a straight graduate tax of 9% on earnings over £21K. Would that make it any better?

Surely only a complete moron gets hung up on the gross figure?

It may reduce students which would be beneficial as said above. It might ensure institutions which are not much good and probably should not exist go under which wouyld be good too and discourage people who aren't up to much and aren't that bright doing pointless degrees and incurring debt, people who would never have earned much anyway.

The very poor rather unfairly will be looked after whereas the children of the rich whose parents pay not a penny will be penalised.

I do though think we need to address the discrimination within the UK on this Scottish and Welsh will pay not a bean and the English will pay out hand over fist. If we said whites or blacks don't pay or boys or girls don't pay and the others do there would be an uproar.

I agree with the comment about teh Wlsh universities Xenia, we live in Wales so could theoretically benefit us but seems so bloody unfair.

I get it is up to Wales to set what they ask the students they finance for but asking more from English students than other EU nations is wrong.

Ephiny not at all worried about them taking out a mortgage as they won't be making that decision at 17. Also you always need a roof over your head whether you pay a land lord bank or local council and if it goes pear shaped you can sell a house (...maybe)

I just want my kids to have the same opportunities afforded to me and I don't think £60 - 70 grand real cost quite balances out if you're a passionate anthropologist.

Your figures aren't right.

A graduate earning £35k in 2016 will pay about £100. Someone earning £41k in 2016 (probably close to £35k in today's morning if the coalition's figures are to be believed) will pay £200.

Even if you think that is ok in the early years when students are single, what happens mid-career when they have families? Who will be able to afford £200 a week with childcare + mortgage + everything else?

If you pay upfront of course you pay no interest at all, so the harsh interest rates RPI to RPI +3% only affect those that are middle income and below.

A graduate earning £35k in 2016 will pay about £100. Someone earning £41k in 2016 (probably close to £35k in today's morning if the coalition's figures are to be believed) will pay £200.

Even if you think that is ok in the early years when students are single, what happens mid-career when they have families? Who will be able to afford £200 a week with childcare + mortgage + everything else?"

My figures were an approximation and to be frank so are yours.

Even if we accept your £200 a month (I assume you meant a month here and weren't trying to mislead) as accurate I still don't see the problem. That graduate never took home that £200 to miss it.

If that graduate were to suddenly find themselves £200 a month worse off then I would agree but they're not going to - they never took that £200 a month home in the first place.

I simply don't agree that it is debt. if anything it's an extra tax that might stop at some point in the future.

"Why?

You budget according to your take home pay surely?"

Because I can add up.

e.g. I won't do salary sacrifice if it doesn't pay, even though it is deducted at source.

I really hope you're not typical British ability to do sums.