To believe £27k University debt will put children off?

[Mitmoo]

I am a graduate so value education but now we've seen that so many universities will be charging £9k a year that it will make todays pupils think that a degree just isn't worth the cost?

I know it doesn't have to be paid back until they are earning £21k or thereabouts but they are looking at 20 odd years of debt, more for some and no option to pay it off early if they get a windfall.

Add that to so many graduates not in graduate jobs and others out of work.

AIBU to think we are going to go back to the bad old days when university access won't be based on how smart you are but how much money your parents have?

If we raise a generation of university students who know that after graduating they will be unable to repay their debt, and go into low paid work, with the debt forever remaining unpaid, what is going to happen to the economy of this country?

Research tells us that a degree means you get 40% more in salary than someone without one. Surely it is not hard to work out financially that however you look at it you are better off getting into debt to get a degree initially, it ends up paying for itself.

but I do really hope it puts an end to some of these "Micky Mouse" degrees.

I'm not sure that it will. After all, why not

-go to university

• do a subject that sounds really cool and interesting but is very unlikely to increase your earning potential
• get a job below the earnings threshold and never pay a penny back

I think the new fees are a very bad idea, not in terms of restricting access but a massive financial disaster. The government has to find the money upfront for these degrees and I'm not sure it's done it's sums right when working out how much will be paid back.

The new earnings threshold in the current system would actually mean I'd be better off and pay back less than I currently do. (1998 uni entry)

cat if they never have to repay it, then the sensible way to look at that is they have only managed to secure a job worth less than £21k for the rest of their working life so the degree has not been worth it.

I think a graduate tax is a better idea, but given the current situation is what it is a think it is a real shame if it puts people off.

Research tells us that a degree means you get 40% more in salary than someone without one.

Research also suggests that a lot of this is correlation not cause. Those people earn more because they are capable of getting a degree, not because they get the degree itself.

true debt you HAVE to pay off (unless, I believe, you go bankrupt). you do not have to pay this off unless your earnings are at a certain level. You are right that we don't know how mortgage companies will treat it - but I would guess they will make their calculations based on income net of repayments. (and, if you use the argument that the new funding system will put people off because they will be in so much debt, there's a certain irony in also using mortgages as part of the argument as they are, rather obviously, the biggest amount of debt people routinely get into - in most cases dwarfing student "debt". and, of course, far more frightening in that it's real debt and defaulting on it can loose your your home. not saying you did combine both arguments, just saying generally that it's odd to do so)

Yes mitmoo- but that might be the case whether they paid for the course or went under a free system. The debt is irrelevant in that siutaiton - they go under a free system and do the degree and only ever earn less than £21k or they go under a paid system, only ever earn less than £21k and don't pay the fees.

Either way in that situation the fees are not the issue.

Graduate unemployment could hit record levels due to planned public spending cuts, a research body has warned.

The Higher Education Careers Service (HECSU) warns that because so many college leavers join the public sector, they are especially vulnerable to cuts.

It says that if a fifth of the 39,000 graduates joining the public sector every year lost their jobs, that would double graduate unemployment.

Some 600,000 public sector jobs are forecast to be lost by 2016.

The independent economic forecasting body the Office for Budgetry Responsibility said this week that 490,000 jobs could go by 2015 and 610,000 by 2016.

HECSU estimates there are 39,000 public sector jobs taken by graduates every year.

'One in ten' UK graduates jobless

These would be counted as "at risk" because they are not considered as front line jobs, the only ones that the government has pledged to keep.

If only a fifth of these at-risk jobs was cut, then that would more than double graduate unemployment in one fell swoop.

"That would put graduate unemployment over 20% and pushing towards 25%," said Charlie Ball, deputy research director at HECSU.

From the bbc

www.mumsnet.com/Talk/am_i_being_unreasonable/1274288-To-believe-27k-University-debt-will-put-children-off?msgid=26770194#26770194

In most cases it will be significantly more than £27K. The fees are a small part of the expense of a degree.

I think we will also see an increase in people staying at home for their undergraduate career, to avoid relocation and accommodation spending, while curtailing entertainment spend too (not going to get ratted and roll in at 3am if going Home afterwards - not often anyway!) Could have a plus side in that some may be more likely to get the coursework done, but if you still need your homework monitored by mummy at that stage

We will then get to a 2 tier tertiary education system, where the best unis (Oxbridge, Russel Group etc) and courses (medicine, law, things that lead into "The Professions") are less accessible to those without separate funding whether that is parental, well invested child trust fund (yes I do know people who've done this), lottery win or bursary/scolarship. The best degrees will be far more available to the well off, while the rest stay local regardless of the quality of the qualification they are likely to get out of it.

I don't know the answer, I'm still paying off my debts from university (admittedly I was there 7 years) after graduating in 2004. I didn't have to pay tuition. GOK when I'd finish paying it back if I had!

I agree with Catgirl, Hatwoman...

It's not really debt in the normal sense. Re-payments stop if for example you lose your job or your income goes below the threshold for some reason. If you're not earning much the repayments are tiny and many graduates will never pay back the full amount.

There is now also a lot more funding available in the form of bursuries etc for students from poorer backgrounds, so many will be much better off than under the old system.

Finally, I don't see why parents think they have to save up loads of money to put their "child" through university. Students are not children and the amount that parents are expected to contribute will be completely unaffected by the fees. Previously, parental income was means-tested to see how much of the student loan the student would get. If the income was "too high" the student would only get about 75% of the max loan allowance and parents were expected to top up the difference (not more than about 1,500 p.a.) This contribution was suggested and not compulsory. The situation with maintenance loans has not changed and parents are not suddenly required to pay loads more now...

I have degrees and I currently much less than £21,000 year.

But it was certainly worth doing the degrees. It has made my life much more interesting and happy, I have had some fantastic work experiences and hopefully have more to look forward to in the future, and I have been able to talk to my kids about all sorts of things related to my subject(s) which has helped them at school and in life.

My earning potential is more affected by being put into the position of being a lone parent, than anything else.

Mitmoo
Some graduates in the Public Sector are frontline - doctors, nurses, other healthcare, teachers etc.

Can I point out that it isn't actually £27k of debt, that is just fees. For poorer families who get means tested student loans there is an extra £5k of loan per year. I'm a medical student with fees of £3k per year, and a full student loan, and my debt is already £32k! In the new system I'd be finishing medical school with a debt of almost £70k.

However, I do think that it will only put people off because of the way it has been hyped up by media etc. . Parents of my friends have remortgaged their homes so that their children avoid student debt, when this debt may never even need to be repayed. catgirl is right.

I think the levels of unemployment and the state of the ecomonoy are a seperate issue from the fees. That situaiton would not change if the fees were scrapped (and actually might become worse)

hat it is a true debt because you owe the money and have to repay it when you reach the earning threshold. It is true to say it is a different kind of debt with no risks, but if you owe £27k then it a true debt, if it wasn't the government wouldn't have called it a loan.

The risks are removed but it's a true debt because it has to be paid back.

btw - I am not a tory and would love to see a world where education was free and accesible to all. I just think it is a travesty if we let fear and media hype put young people off from going to university, even if the funding situaiton is not perfect. It is manageable.

Cat they are very much linked, it would be nice to dismiss them but that is to ignore half of the debate.

Why do people pay the fees? In order to secure a better future is the obvious answer, but if we are living in times when even those graduates who are currently employed are losing their jobs then for those children currently at school it is valid to consider what the degree will bring them in our current economic climate.

Fabby I had no idea that a maths degree was so lucrative! What kind of jobs can you get with one?

cat it's not fear or media hype, it's looking at the issues and making informed choices.

The introduction of univeristy fees has not contributed to the global recession and its effect on the employment markets. People went to university before the fees and will go now they have been brought in. The reasons people go to university have not altered and the degree will be no more or less valuable in securing a job regardless of whether someone paid £9k or £3k to take it.

cogito - "specially low rates?" I wouldn't call inflation+3% "specially low". If that was in force now, it would be over 8%, assuming they continue to use the March figure each year, as they do now.

Joe goes to university, finishes with £45k debt, ends up getting a job in his dad?s garage ? earning a salary of £24k over the next 30 years.
Stats:
Starting debt: £45k
Weekly wage: £462
Weekly loan payment: £5
Total amount paid over 30 years: £8100

Betty goes to university, finishes with £45k debt, gets a job as a teacher ? given her qualifications it?s not the best pay in the world, but hell, she?s helping out society and feels better for it, she earns an average of £32k over the next 30 years.
Stats:
Starting debt: £45k
Weekly wage: £615
Weekly payment: £19
Total amount paid over 30 years: £29,700

Sam goes to university, finishes with £45k debt, uses his degree to land a well-paid job in the city, earns an average of £90k over the next 30 years, then has a heart-attack because of stress and dies (but that?s another story).
Stats:
Starting debt: £45k
Weekly wage: £1731
Weekly payment: £119
Total amount paid over 30 years: All of it (taking account of the 3% interest, this would mean paying roughly £49,500 which would take Sam about 8 years).

Looking at the weekly repayments against salary should not put anyone off.

But she can go now second. 10 years ago she may not have been able to as the funding and loans would NOT have covered her fees and accomodation and you would have needed to stump up for it (or she would have had to work significant hours).

Now there is funding avaliable to her so she can go, albeit if she gets a good job at the end of it she will have to pay back at a rate in line with her earnings.

Its not perfect but it would have been much harder for her 15 years ago.