to think that massive debts on Uni fees will have a knock on effect on the housing market?

[donkeyderby]

What happens when a graduate earns enough to be in a position to get a mortgage? Won't they then be slammed with paying off debts from University which will either stop them qualifying for a mortgage in the first place, or make their outgoings unsustainable? Add to this a VAT rise, massive fuel bill rises etc.

i'm not 100% on this but think that they are not 'debts' i the same way as credit cards, say, are. The proposal is a graduate 'tax' so assume they will pay x a month deducted from earnings and the net is what you'd use to get a mortgage?

still abhorrent and still likely to deter loads of bright kids...

YABU. The money coming out of graduates pockets to pay for their tuition will no longer have to come out of general taxation, so other people will have more money in their pockets with which to buy a house.

It may be that tuition fees will dampen enthusiasm for higher education to such an extent it hurts our overall economic performance, and that might have a knock on effect on the market.

No effect on the housing market at all.

I think a lot of us were / are already in that position when we graduated and found jobs. For me, it was simply a case that some money went out of my account each month, and I lived on the remainder. So I lived in cheap but perfectly nice accommodation (rented room, house etc) for a number of years.

I think any effect on the housing market will already have taken place.

Student loans don't count as debt for mortgage purposes, so in terms of being granted a mortgage shouldn't have any effect. Just as missing payments isn't recorded as part of your credit rating.

I think the idea is that you repay a % of your salary until the debt is repayed, just like the current system, it is just going to take a lot longer.

The only thing that will really effect the market is people's perception of being in debt, but once you owe £20-30 thousand, what another couple of hundred thousand?!

might increase the cost of housing in scotland and wales as everyone moves there!

riven - i think most people have same view of debt. i was always brought up to be nervous of it (apart from mortgages) and i've done the same to my children - so it goes against the grain to encourage them into something that will produce so much debt doesn't it.

ironic that the governments reason for doing this is to reduce the country's deficit so future generations don't have to pay it off

riven exactly. we have been lucky enough to have been able to save a fairly large amount for each child - but now they will still have loads of debt anyway.

they could put that money towards a deposit on a house. so i'm thinking why not be a plumber or something instead.

education for education's sake anyone?

student loan isnt seen as a black mark against your credit rating.

Of course it will have a negative effect. The bottome will fall out of the housing market as new graduates have to wait 10 years to get on the housing market.

But dont worry this gap will be filled with buy to let renting out at extortionate prices.

happy days

Very unlikley that student debt will cause the housing market to implode.

No, I don't see it having an effect on the housing market at all.

Riven if you say even a short career is 30 years, then £90-£150k is £3-5k a year.

I don't think there will be many who won't recoup that over a working lifetime.

Less people will do what I did though, which was go to Uni and study something I was interested in (Philosophy) rather than something which would get me X job. And I'm not sure that is a bad thing really. I really enjoyed my course but wish I had done something which was a more direct route into a particular job.
It is largely why I'm a SAHM at the moment and planning to re-train before I go back to work in a few years time.

of course it will have an effect on the housing market; however it will take at least 10 years for the effects to come through.

Does not count as debt for mortgage purposes?

Right, so when I decide what size mortgage I can afford, I should just pretend that there is no deduction to pay off my student loan, and proceed as though that money is available to me for spending on other things?

If people have less money then they can only afford smaller mortgages, regardless of what the banks "count as debt for mortgage purposes"

the effects this will have long term are not certain, but if going to uni means you are less likely to be able to afford to buy a home, then that will be a big disincentive to study at 3rd level.

Overthehill - hear hear, I thought I was the only one. Am getting sick of hearing everyone parroting that the reason for doing a degree is to get a higher paying job. What a drab utilitarian viewpoint! If teenagers are thinking in that sheep-like way I'd say they were hardly university material.
I am fortunate enough to have a degree and a high paying job that I mostly enjoy but the degree is not the reason I earn that amount, most of my colleagues doing a similar role earn the about the same and most don't have degrees.
People also bleat that now employers insist on degrees, so the bar is higher Maybe this is partly true whilst there is the current anomalous glut of graduates, but this is likely to be regulated back if fewer go to university, having made a rational choice between study for the love of it, or for a vocation - eg medicine, or a calcution that they are not academic enough, the cost is not worth it, and will get a job instead. And the energetic, hardworking ones will be snapped up by eager employers who are increasingly fed up with the sense of entitlement and unrealistic aspiration of many 'graduates'.
Incidentally we pay for our DC education because we put that value on education and teh ecvidence we see is that they are getting a better learning experience. The goal is not to get good exam results and get into Oxbridge. The expenditure is for them to have a happy and enriching (not in the monetary sense!) school-life. Which I would apply to their decision whether or not to continue to higher education. By then they ought to be mature enough to decide whether the expense will be worth it to them a that point. If not - maybe they will return to it later, or maybe not at all.

No they wont have a knock on effect, the debt just lasts longer, and is still low compared to any other kind of loan.

Remember that those with degrees earn 50% more than those without.

My son as an example will be earning in his first proper job 50K a year plus bonuses, going into banking with no degree would have got him half that with no bonuses.

He says as a Uni student it makes no difference.

no the debt is considered it just isnt considered as bad debt for example the same amount of money in loan repayments isnt a negative in the way that money owed to british gas might be

It will be a very bad thing indeed if students stop studying things because they are interesting and start treating uni like a vocational training college.

If you train everyone up for today's skills, when tomorrow comes we'll be fucked.

Well educated people with transferrable skills and developed critical and analytical thinking are essential. Early specialisation is the opposite if what we should be encouraging.

I also think it unlikely that it'll have a major effect on the housing market. We're hoping to fund ds without him taking out loans, but even if he did have to borrow 5 years of fees (med school) at £9k, plus say £5k pa living expenses, it'd be £70k, payable over 35 years out of a six figure salary, so only around 2% of earnings worse case scenario.

Student loans do not appear on credit scores. At least that's what Martin Lewis said on Radio 4 yesterday.