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.

Maybe the answer is not higher education but to go for further education instead.There is a minority of jobs that actually require formal higher education after all

is are

Yes - I think for those studying GCSE it's a good idea to do a MFL and think about university in Europe.

Bubbley - I can currently only find references to write off after 25 years. I'm not sure but maybe the age 55/35 year write off is what is proposed after the fee hike?

looktowindward when your dh gets a performance related pay bonus which means your student loan contribution doubles that month - the figures are very real

"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."

Look, when you look at a job advertised at £30K there's a host of deductions that have to be made. This is one more.

In terms of monthly salary you talk in terms of take home. I'm not even sure of my gross monthly figure unless I do some mental arithmetic.

Yes, that £30K is "real money" in that somewhere down the line the employer forks out the full amount but do you budget around that £30K or do you budget around what you take home?

I'll hazard a guess that you do so around the net figure - because that's what you see and that's what you work with when you budget.

The idea that this 9% is going to cripple graduates of the future who won't be able to start a family or buy a house and so on is pernicious to say the least. For reasons I've posted elsewhere it simply can't be compared to debt in the traditional sense because it isn't.

"Therefore it creates a disincentive to become highly qualified"

Why? The average graduate is still going to far out earn their non graduate equivalent. Presumably you think the same about the top rate of income tax?

I'm trying to be civil here but you're making it very hard. I'm resisting the temptation to call you stupid but you're not making it easy for me...

YOU DON'T NEED A DEGREE BUT YOU PAY THROUGH THE NOSE FOR ONE - I work for local gov and it was a requirement of the job description that I had a degree - the salary was a princely £15,134 5 years ago. there will always be graduates to fill these positions but we need to wake up and realise that our debts are chunking up and up while propping up this whole system

Thanks saggar. I think the 25 years came in after me though :(

I believe a housing crisis in some developed country or other was started along similar economic models

a single mother or pensioner may well have gone to uni, so now its time for them to repay that priviledge to the younger generation.

they will use goods and services provided by graduates so its not unreasonable they pay a tiny bit towards that.

we are not talking a slight increase here - we are talking 3 times more - ie 27k more. the graduates will be saddled with massive debt for many years. it will serve this country right if there's a shortage of skilled professional people in future in England - wales and scotland will be fine of course

tee hee hee had a very evil thought of people complaining their doctor has a scottish accent they can't understand

Call me stupid if you like. It won't make me look more stupid or you look less so.

"Yes, that £30K is "real money" in that somewhere down the line the employer forks out the full amount"

Nope, the employer pays more than that. The 30K is my gross salary. That is an important number to know, as is my monthly gross, as well as net. I pay attention to all deductions and it's not for you to tell me how I (or anyone else) will or should perceive the loss of money implied by any one of those deductions.

"The average graduate is still going to far out earn their non graduate equivalent."

Figures? Links? Or just bald, unsubstantiated and almost certainly false assertion?

"The idea that this 9% is going to cripple graduates of the future who won't be able to start a family or buy a house and so on is pernicious to say the least."

Why is it pernicious? On what basis are you claiming that it won't affect their ability to do certain things?

They will have less money than they would otherwise have had. The only way that won't affect them is if employers increase their wages to compensate. But that's not exactly the trend these days (or for the last couple of decades), is it?

"For reasons I've posted elsewhere it simply can't be compared to debt in the traditional sense because it isn't."

You keep saying that, but your reasons are fatuous.

The "traditional" sense of debt is an amount of money you have to pay back. It doesn't even require the presence of interest, although that makes it look even more like a debt. Which is exactly what it is.

I am completely confused by the issue of not calling student loans debts - you borrow the money then you have to pay it back plus the interest accrued. How is that not a debt? I heard a LibDem MP describe tuition fees as "virtual fees" because they only "exist" at the end of the degree course. That contains as much spin as a debt not being a debt because the baliffs won't come looking for it.

Windward - it possibly depends on what your takehome pay is and how tight things are at the end of the month as to whether you notice the deductions or not. My dh pays 11% of his gross pay to hs pension. I can tell you for a FACT that I notice that deduction and fantasise about what I could do wuth it on a monthly basis.

Supporting ds2 through university would be one of the things I'd do with it. Oh the irony.

OK, I get that some people might notice the additional deduction, but the fact is that higher education has to be paid for somehow, and it's going to cost a lot with the vast numbers of students going to university these days.

Other options are asking students to pay upfront, which for many without rich parents would mean taking out a commercial loan - which would have much harsher terms of repayment and no reprieve for those who end up on low incomes.

Or you could pay for it out of general taxation, by raising income tax, but then surely you're back to the same problem with an additional deduction on pay. Only it would apply to everyone, not just relatively well-paid graduates.

Not saying the proposed system is perfect, but haven't yet seen an alternative that's obviously better...

Ephiny - if your theory holds true then relatively well off graduates pay more tax!

It should be paid for out of general taxation. The UK spends the smmallest proportion of its GDP on higher education amongst comparator nations, see here

The coalition keeps telling us that we have to pay off our nation's debts so that our children and their children are not paying for our generation's mistakes.

My generation had no tuition fees to pay, widely available grants and easy access to part time employment.

We will hand to our children the prospect of paying for their education even while their children are going to university.

We are taking what should be a collective investment in our nation's future and a debt borne by the nation and turning it into a personal debt.

Only the very very poor will and wealthy will escape this. This is real money, real debt and a really bad idea.

"Figures? Links? Or just bald, unsubstantiated and almost certainly false assertion"

The ONS states that the average employee with a degree and who is between the age of 21 and 60 will earn £605 a week. Those with A-Level qualifications will earn £466 a week. Those with no qualifications will earn £289.

Just to be clear here - a degree will earn the average employee more than twice what an unqualified employee will. Twice.

• Labour Market Trends, Office for National Statistics (ONS), November 2004, Vol 112, No 11.

Admittedly its a bit old but I believe still broadly applicable. Will that do?

or you do deny that the earning power of a graduate is significantly more than the non graduate equivalent?

"Why is it pernicious? On what basis are you claiming that it won't affect their ability to do certain things?"

Because affordability is relative and if the graduate on £45 paying an extra £200 a month can't afford to buy a house then the plumber on half that won't be able to.

In which case we've bigger problems than the cost of HE.

Regardless the graduate is still considerably better off.

"They will have less money than they would otherwise have had. "

And they will if the government increases income tax, or VAT, or NI or petrol duty.

And your point is?

"You keep saying that, but your reasons are fatuous."

Why?

I accept that it has characteristics of debt in that it is fixed amount that attracts interest that (under certain conditions) requires repayment but there are many more characteristics that are very "undebtlike":

1. Repayment is related to income not liability.
2. It is not a commercial debt and does not appear on credit reports or similar.
3. Liability ends upon death or an upper age limit. Your estate is not liable.
4. It does not impact on other sources of commercial credit such as a mortgage or credit card.
5. It is administrated through HMRC, the lender has no commitments in terms of repayment administration - no direct debits, no handling cash or standing orders.

The Student Loan debt isn't a liability in the typical way that debt is.

I read this as a tax with a set end point.

If the 9% were a tax instead of going to pay off a set amount would that make it more palatable to you?

I sincerely hope you're not a product of our university system if this is the best you can come up with.

"We are taking what should be a collective investment in our nation's future and a debt borne by the nation and turning it into a personal debt."

Lovely

Well yes, and that seems reasonable to me. It also seems not much difference in practice from the proposed situation with the loan repayments, from the POV of those graduates. The actual amount paid by an individual graduate might be more or less on either scheme depending on the exact terms.

Personally I wouldn't mind paying higher income tax to help cover HE costs, as having an educated population benefits everyone, it's not an unreasonable idea, though a tax increase is never going to be popular! (not that the current proposal is going down very well either of course)

Actually I think once the new fees regime comes in there will be commercial loans that will be offered in competition with student finance.

And yes university education should be paid for out of general taxation.

If our government thinks graduates will end up earning more than everyone else then they shouldn't mind waiting and taking their money back in taxation.

And I don't mean a graduate tax...

"If our government thinks graduates will end up earning more than everyone else then they shouldn't mind waiting and taking their money back in taxation"

But that won't generate enough income so the alternative is to up the rate of income tax for everyone or cut funding...