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.

WhoKnew2010 Exactly you put it much much better than I have.

spidookly got a pension, pay life insurance, as car maybe - a 2016 graduate probably won't have for some considerable time

So it's alright for people to struggle financially as long as that's all they're used to?

Nice.

Timefor

Sorry, I don't get what you mean.

But I totally agree with you.

Whoknew's figures are correct. Repayment is 9% of anything over threshold.

Sorry should have been £45k not £41k (so approx £37k let's say in today's money?)

£200 a month, yes.

Like everyone else I find the idea that it's gone before you have it irrelevant. This is akin akin to a very punitive tax but not on those rich enough to avoid taking out the loans etc. in the first place. Anyone with any cash will do so.

RPI is currently 4.5% so those over £45k will pay £7.5%. Because those in the middle will be paying for longer they will be paying more than those who are richer who will pay the debt of faster.

It's an unbelievably regressive policy for anyone other than the very poor.

(thanks Time)

LOL sorry still in rant mode - just feel a bit poo for all those just coming through the system who have no comprehension of what that amount of debt means in real life. £140 doesn't sound alot but it is once your budgeting is straining over the high electric or water bill

£140 is a lot.

It's infuriating to be told it's not and that I wouldn't miss what I never had.

FFS.

These kids will see their mates who didn't go to college (or went abroad) on the same salaries taking home significantly more pay.

They sure as fuck won't be telling their children that you don't notice what you never had.

Is it true that they aren't going to let you pay upfront therefore avoiding the interest?

I would rather ds1 borrowed from us with no interest than pay back a sum which isn't actually tuition fees but tuition fees + interest.

as I understand it (and am happy to be corrected) Cable has said that no one can force you to take out a loan so you can pay fees upfront (and obviously all living costs).

It's only if you have the loan and then are earning lots and want to repay more quickly than the 9% above threshold that you will pay a fee.

anyone else know differently?

I think it might breach the law if they refuse to let people pay the fees as they go. Under the current system you can pay fees rather than take out loans.

Indeed in some coutnries, I think Australia, you pay a bit less if you pay up front which reflects the economics - most companies charge less if you pay in advance and more for people who pay over time. If that were not so or worse if it were reversed I think the government would be subject to legal challenge.

on what basis Xenia?

Just been reading the other thread about an update, where they are proposing to give 2 yrs free tuition for students from families who receive free school meals, which will apply to an minisule percentage of students.

Also makes a mockery of the 'fairness' of the increase. If it's so fair then why do they need to give free tuition. It's a complete joke.

The only families who qualify for fsm are families where everyone is unemployed. If you are working for an equally low income you don't qualify. Not many families will qualify by the time their DC's are uni age. They will have be forced out of the system well before then.

Does anyone know where it states when the current loans get written off? I started in 1999 and I'm pretty sure I fall into the category where the loan stays with you until retirement age.

Someone mentioned this earlier and I agree; the loan should accrue interest only when you are able to work. So people who are sick/injured or on maternity leave should be able to take a break from the interest. In particular I find it very unfair that women will end up paying more back overall because it will take them longer to pay the loan back due to time off for maternity leave and being more inclined to return to work part time. In many cases the repayment barely even covers the interest when you're on a part time salary - if you manage to earn over 15k pa working part time which many women don't!

In fact, will the figures even add up if the threshold is increased to 21k and the debt is written off at 55? How many people will actually manage to pay back such a large debt in that time? It's not like the average salary is increasing! I know many people who don't think they'll get their much smaller loans paid back in that time!

WhoK, abuse of dominant position; it's unfair for a dominant entity to charge someone more who costs them less. I am sure people can think of other grounds too although it looks from what was said above about Vince Cable that parents and children will not be stopped from paying upfront and I would imagine not penalised for doing so. If they give you no discount for upfront payment I think that is just about tolerable but to make you pay more if you pay in advance is contrary to how markets work and unfair.

Xenia - no, I don't think so. Abuse of dominant position is part of EU competition law directed at companies. Otherwise every time the Govt imposed a tax they would be abusing their dominant position through tax!

Yes, it could be hard but there may be other grounds. Governmenta can be subject to those rules - care home services in Northern Ireland, Companies House but I think the issue has gone away anyway because Cable has said it will be possible to pay up front.

wrt to a salary sacrifice - well if you've been earning prior to starting a sacrifice scheme then you're going to find yourself worse off.

A graduate isn't. They're going to see an additional deduction on their payslip. This idea that they're somehow going to have a huge debt over their heads for life is fantasy. if they're earning x a month and then found themselves It's monopoly money - numbers on a statement there that move to a statement here. The graduate in question never actually sees the money to miss it.

Look, when looking at a job you see a gross pa figure. There's all kinds of deductions that get made to that figure before it gets turned to the net payment figure. Tax / NI, salary sacrifice schemes, pensions, sharesaves, etc etc. This is simply one more deduction with the bonus that it might stop in the future.

It isn't debt. You're not going to have the baliffs at your door if you can't pay it, it won't impact on your ability to get a mortgage or a credit card.

Does this mean that the graduate earning £45K pa won't be able to afford a mortgage, family etc? Who knows, "afford" is a very relative term but a graduate on £45K - even with that 9% on the remaining £24K is still going to be miles better off than the non graduate on £25k. Will the on graduate be able to "afford" to start a family and all those other things?

I'll ask again, if this were a graduate tax of 9% for salary over £21K would you still class this as a "debt"?

And as someone else said, I actually agree that this is somewhat regressive - like so many things the poor can rely on state help and the wealthy can afford it. Its those in the middle who will suffer. This is why I support the idea of a graduate tax rather than some convoluted system where an adult is penalised on their parents income.

"These kids will see their mates who didn't go to college (or went abroad) on the same salaries taking home significantly more pay."

And? They went to university and their friends didn't. They made a choice.

I pay considerably less in my pension contributions than one of my colleagues because he chose not to start his pension till later in life.

Is that fair?

"It's monopoly money - numbers on a statement there that move to a statement here."

It's real money.

Jesus, I really hope you don't do anything for a living that involves either money or figures.

"Tax / NI, salary sacrifice schemes, pensions, sharesaves, etc etc. This is simply one more deduction with the bonus that it might stop in the future."

Those deductions are ALL real money.

You do understand what money is, don't you?

You can't just claim that money isn't real because you don't get it into your hand or that debt isn't debt because the terms of the loan are different to the terms of other loans.

Your argument is just nonsense.

Xenia - no companies house was re cost recovery and care homes were acting as private providers. not the same as this at all.

Look - so you're pro a graduate tax? Gosh. I didn't pick that up from your previous posts at all.

"And? They went to university and their friends didn't. They made a choice."

And - they'll tell their younger mates not to fucking bother.

Therefore it creates a disincentive to become highly qualified.

Which is the last thing the UK needs right now.

It may be a class thing but a debt is something you pay back -

Also tax systems change - get voted in and out and tweaked by succesive governments - my debt is with me to stay - unless there is a party that is prepared to wipe out all student debt.... and actually stick to it

Spidookly - I agree.

DH and I were discussing this. We wondered whether part-time studying will become much more common and the whole student experience will change for all but the very poor and the very rich (should make for interesting halls).

EU universities and others offering bursaries stand to do well out of UK students studying abroad. Why not study languages in France or Spain, Art in Italy or Economics in Sweden or the Netherlands (both of these already teach in English). All cheap or free.

DH and I were saying that we could see a massive reduction in demand for Uni. Applications could plummet especially from the English middle.

If it was a graduate tax then there wouldn't be an amount owed that is accruing interest that wouldn't be a DEBT that would be a TAX