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?

My younger sister is at uni and has 2 jobs to put money toward her fees now so she's not left with such a massive debt when she gets her degree... During last term she was utterly exhausted and every time I asked if she had time to meet up she was either in classes, at work or doing coursework. She's still got the 2 jobs and is working solidly through the holidays and next term will go back to the same routine as last term. All because of this stupidly massive debt. I'm sure the real cost of educating an individual student is NOT £9000 a term...

FWIW it put me off uni when the time came to decide and I went straight into work. I am now fairly content at 23 in a £27000 job. I also see graduates being hired by my company to do simple admin. Don't think a degree counts for all that much tbh.

catgirl it will still be affected by parental wealth because this will directly affect how the would-be student will view debt and what figure of debt they consider significant. The importance of this cannot be overlooked and it is vital to understand that a comfortable middle class existence is still light years away from a working class existence or even a lower middle one when it comes to what is considered a 'large' sum of money. For a bright child growing up in a family where being £50 short one month means that there isn't quite enough food that week or a trip has to be postponed because the fuel for the car cannot be afforded, £27000 debt in uni fees would be seen as obscene.

Also, full maintenance loans will not cover the full costs of a degree. I know mine didn't. I worked because I didn't have parental support. Fine if you've got a degree with minimal lecture hours and can find a job, not as fine if you have a lecture-intensive course (e.g. engineering or medicine) and/or cannot find a job.

Scholarships are incredibly limited in this country compared to other countries where fee-paying universities are the norm. Bursaries only tend to exist in fields where there is a drive for recruitment.

catgirl out of curiosity, why would you not send your child to state school (presumably if you are rich your local schools are decent) and save the money to pay for his university education so he is not saddled with debt?

Why not put some money in an interest-bearing trust fund for his education now, that he can access when he turns 18?

You have options. Poor people don't. It's not really fair to say your child will be in exactly the same situation.

I do agree sunshine that lower income students are traditionally more debt adverse and are more at risk of being put off by the fees. I think until the situaiton changes, that is what needs to be addressed and talented, young people need to be educated with the facts not the fear and NOT put off from going. People from all income brackets still see the debt of a mortgage as something they "have" to have. Sadly I think we need ot start looking at the cost of university in a similar way.

The full loan will cover the cost of the fees in full, with an extra £5.5k per year for living costs. Yes, most students will need to supplement that with part time or summer work, but that is not a new development and has been the case for a very long time.

dreaming I would not do that because I would see him going to university as something he does as an adult and therefore his own responsibility. There is no need to pay the fees up front as he will get a full loan to cover these and repay it if and when he earns enough to do so. It would be IMO a poor use of money to pay up front for fees when they are his resposiblity, not required to be paid up front and only required to be repaid if his future income warrants it. I would also feel by being responsible for his own fees he would be more likely to put the effort in to make sure he was getting as much value for his money as possible.

But the opposite is going to happen catgirl. Thanks to our changing economy and the new emphasis on frugality, austerity and how any form of debt is the work of the devil and has to be paid back as quickly as possible, young people are going to be more risk averse than ever. Some of the poorer in this society will grow up in households where no one in the family has even a credit card, let alone a mortgage.

And the idea that £21000 is an affordable salary to be paying it back is laughable. I earn that now (despite a 1st class honours degree and a masters) and after paying my mortgage (which is less than half of the country's average and below what I could be expected to pay for the smallest rented house suitable for my needs) and childcare I am left with less than someone on benefits. £21000 will be fine for a single person living in shared accommodation with no children or other responsibilities, but most people will want to have children and/or live in their own house at some point (whether rented or otherwise). The cost of keeping a roof over your house in this country is completely out of proportion to the average wage.

Being poor limits your opportunities too. I can't afford to move to a more affluent part of the country and get higher-paid work because I cannot afford moving costs for example. Once in debt we could see a whole swathe of the country trapped in poverty because although they possess the talent to go far, they will not be able to take their opportunities (e.g. unpaid internships, salary cut for a trial period) because of lack of money or debt repayments and still be able to afford to survive.

But if you were on say £22k you would only be paying back £1.73 per month. This really wouldn't have any real impact.

I do agree of course that being on a lower income limits your opportunities and that the current economic situation is a real problem for everyone. I also agree the cost of living in the UK is way out of synch with actual earnings. However, the employment market would not be any better or worse under either system. Students would in debt under either system. Yes there will be in more debt under this system but at least the obstacle of having to pay tuition fees up front has been removed. This would have been an actual barrier to some students previously.

I paid for my first degree whilst working at the same time and was funded for the second. I think I put a heck of a lot more effort into the first one.

I think that some people have take the opportunity of university as an alternative to starting work whilst experiencing a level of independence they wouldn't have achieved through sixth form college, etc. Some worked hard at uni, some didn't. During both my uni stints there were students like this. Huge drop out rates and outright fails. That will change when students actually have to think about the debt they'll pick up, whether they'll actually apply themselves in the first place. No bad thing in my opinion.

I think a £27k debt is nothing at all offset against the employment opportunities that education gives, combined with the fact that you don't have to pay it back until a threshold is reached.

sunshineandbooks you do realise there's a generation of people who are already paying back their student loans as a percentage of everything they earn over a threshold, but the threshold is 15k rather than 21k?

I think it's hard to argue that the threshold is unfair when thousands of students have been paying back at a lower threshold for the last decade.

catgirl students have never really had to pay fees upfront have they? I know technically they were due up front, but anyone was able to get a student loan that covered the fee amount, it's not like they had to find the money from somewhere.

It was a 9% threshold for me. Under that system, someone on £22k would be paying back over £20 per week rather than £1.73 on the new system - that is a huge difference on a relativley low income.

tyler - when I went fees had to be paid up front and the ONLY funding avaliable to me was a small loan. Yes, this could have covered my fees but that would have left around £1,500 to live on. The idea was that my parents were expected to contribute the shortfall. A lot of students were in this situaiton but if their parents wouldn't or couldn't assist with the shortfall they really were left with a hard choice of pay the fees and have £1,500 a year funding or dont pay the fees and have £3k

When I worked in HE, a huge amount of students were prevented from graduating (illegally IMO but thats another issue) due to non-payment of fees, which then became subject to very real debt colleciton proceedings.

catgirl You are saying that it is his responsibility but you have decided that he will go to University and he hasn't even been born yet

Sorry i'm not attacking you but i always find it funny when posters say 'when my dcs go to university' instead of if, unless the dcs are over 15-16. Yours is still unborn and he allready has obligation to you.

That's no different to the current situation is it? Everyone will have a 'loan' to cover their fees but the additional loan will depend on income?

Sure tyler I take your point, but the loan was always for maintenance costs not for fees. Now there are 2 loans - 1 specifically for fees and 1 for maintenance. That didn't exist before. Neither loan is dependent on income. They are now both exactly the same whether your family earns £10k a year or £100k a year.

Grants will still be avaliable to lower income families.

Laquitar - sorry. I assume he will but of course he may not. :)

The maintenance loan is means tested

Are you sure? I can't find anything anywhere that says that? (Am not saying it isn't I just can't see where it says it is?)

catgirl Thanks for answering. I'm from a working class background and tbh I don't understand your logic, but it's just what you're used to I guess. In my family, people would scrape together whatever money they could to loan to family members so that they didn't have to get formal loans from anyone; better to owe 5 grand to your uncle than the bank or the government. It would be seen as deeply odd for a parent to let their child go into debt when they could pay for them.

And actually, it's not really the case that your child would be responsible for his own fees -- it would be the government paying them. Maybe he will have to pay them back, maybe not. I don't really see how that teaches him anything more about responsibility than if, say, you paid his fees but required him to work during the holidays to pay toward his rent or something.

Does this mean that some people will never pay it all back but by the same token will always be in debt? Seems a strange way to start and continue life Not 100% sure my ds and his mates are now seeing uni as 'the' option post A levels which i think is a good thing!

Tuition fees will increase to up to £9,000 a year. Students can apply for a non-means-tested loan to cover fees, repayable from the April after you graduate if you are earning more than £21,000 (this is subject to parliamentary approval). Those with household incomes below £42,600 can also apply for non-repayable, means-tested maintenance grants and repayable means-tested maintenance loans.

The Guardian

I do see your point dreaming and I agree it is different ways of looking at things.

However, on the one hand people are saying that the debt is a lot of responsibility and will make young people re-consider going to univeristy and on the other you are saying that a young person wouldn't feel responsible for the fee debt they had accumulated as "the government had paid it". The debt either makes people think aobut going or it doesn't.

I just woulnd't see an issue with him getting onto debt to go to university. I would be much more worried when he took out a mortgage tbh as that is real debt with real consequences.

I think that is the difference really - the CONSEQUENCE of the debt. Yes you are £50k in debt on paper, but what are the real consequences? Will you have baliffs knocking on your door to collect it? NO. Will you be struggling to meet the repayments? NO.

In that sense, it is not like a "real" debt (a bank loan or a mortgage) where the repayments must be made and the consequences for not being able to do so are real and severe.

noddy If you go to university but can't find a job afterwards, or one that pays less than £21k then you will be in debt until you are 50 I think when it is written off.

Given the growing rate of out of work graduates and the number about to be made redundant in the public sector it is going to be even harder for the graduates leaving in 2013 to get work. This policy has disaster written all over it. The government have paid up the £27k up front for graduates who may not be able to pay it back for years.

I think it is just the maintenance grants that are on household income tyler although currently 25% (ish i think?) of the loan is means tested so maybe that is staiyng the same. I thought the maintenance grants were means tested and the living costs loans were going to 100% non-income contingent. Sorry if I had got that wrong.

tyler - yes I was staggered by those on salaries of £15000 having to pay it back. Very unfair indeed.

One of the biggest mistakes this country has seen is the encouragement of so many people going to university. We have too many graduates, some of whom will never gain a job appropriate to their level of qualification. Meanwhile we have skills shortages in other areas where a degree is unnecessary.

IMO it would make much more sense to have slashed the numbers going to university and yet ensure that they were fully funded - fees paid and liveable grants provided. This would have done far more to ensure a university education was based on merit rather than wealth and to encourage equality of opportunity between socio-economic classes.

It would have also seen a larger number of people far better off by pursuing a more vocational education that would undoubtedly see them get greater remuneration than their degree. It is a myth that a degree means better earnings - teachers and researchers to name just two graduate groups for example - can be far outstripped in earnings by non-university-educated people in the private sector. My plumber earns more than my teacher neighbour for example, and one of the reasons I dropped out of academia was that I couldn't afford to live on the £12000 starting salary I would have been on after finishing my PhD and starting as a junior researcher.

The debt either makes people think about going or it doesn't

Even the government doesn't have a clear position on this. On the one hand it says it should be an even playing field, shouldn't put anyone off etc. On the other it provides means tested grants for low income students. But surely if it doesn't put anyone off means tested grants shouldn't be necessary?