To think people are unaware on how much the government has SHAFTED students with loans

[SucksToBeMee]

This brings me so much anger to this day, and I took out my student loans from back in 2012 when 9k tuition fees were introduced.

I did a 3 year undergrad and I left with a 50k debt. I can live with my 50k student loan. Fine, the government wants to pass the cost on to students (not that I agree you they should be doing that) but fine.

But the interest rates are so unbelievably outrageous I have no NO CLUE how they've gotten away with completely shafting the whole (especially poorer) student population.

Do people realise the interest rate on student loans is 3% + RPI? It's currently at 6.6%

6.6% interest this year on a 50k loan. That's at least £3300.

I earn a £45k salary and I still won't cover the interest this year. I have been earning a fairly decent salary since graduating and I have never covered the yearly interest.

My outstanding debt goes up and up each year even though I'm paying them thousands in the year. I now owe them £55k after giving them around £6k since I graduated.

They will carry on taking 9% of my salary over 25k and 9% of all my bonuses for the next 30 years.

Anyone who took out max loan (aka from a poorer background) and ended up breaking the barrier through to a better life is fucked over the most.
The wealthier families get away mostly scott free.

I think it's absolutely outrageous, and I'm not sure people realise how fucked over we're actually getting with interest rates. I have a debt that I can never even start to pay off. I will pay them probably double what I initially owed them over the next 30 years.

Honourable mention: they also charge max interest rates on your outstanding loan for the duration of your study.

It's even more outrageous that Students in the NHS only have the same student loan to live off even thou they work 40 hours a week in the Hospitals or in the Ambulances, on top of their Academic Work, have less holidays than other Uni Students, a shit salary compared to others, but still the same debt!

MRex I’m saying this as someone who works in STEM - surely we can’t write off Arts degrees as useless for the contribution to the economy? If we stop doing history, art, music etc we’ll be in a sad state of affairs in a few years.

Also we don’t want to discourage people from taking Arts courses as surely they subsidise the STEM ones? A course that effectively requires a lecture hall, a projector; and access to the library costs the uni a hell of a lot less than a course requiring labs, fieldwork, mass spectrometers etc; but they pay the same in tuition. If you get less Arts students then the STEM costs would go up.

It's not about the debt. I firmly believe it is a means of controlling the population.

I have a plan 1 loan. When I graduated, the interest was relatively high and it increased my loan. Unlike yours, however, mine will never be written off. I have had periods of maternity leave and haven't paid it off but have still incurred interest charges. The threshold for payback is much lower (£15k ish when I graduated), so a much greater percentage of my salary goes on loan repayments and I will have to clear it (eventually!)
I would have been much better off under plan 2.

If I was confident the loan would be written off after 30 years as they've stated, I wouldn't be as angry.

You're angry about something that might happen in 30 years?

By all means, join MSE's campaign, it's a good one. But being so angry about a system which allowed you to go to university in a situation where even 15 years ago you wouldn't have been able to, and has given you a starting salary higher than the majority of people will never earn, and complaining that because you have that salary, that you have been shafted, is well out of order. It's also the reason your generation gets slapped with the "entitled" label, which is hugely unfair because thankfully attitudes like yours aren't the norm for your generation.

@MintyMabel

I'm not entitled at all, but thanks for your concern.

I earn higher than my parents have ever earned in their lifetime. I'm now supporting them. If you think I don't realise every single day how lucky I am you a greatly mistaken. I've fought so hard to get out of the shit life we had.

I'm saying I'm more than happy to pay back a loan that the government have given me to be able to attend uni. I'm also saying it's not fair to make me pay back probably double what I owed them while people who are fortunate enough to be born into money pay much less (in my circumstance)

I don't think it's so much a question of being angry about a potential change to the write-off rules, more that it is an alarming thought that the debt may accumulate to massive amounts and then not be written off.

As to how likely/possible that is, who knows - though even on a mn thread I've seen suggestions that it should be recovered from the estates of graduates once they're deceased! Maybe that will be the next version! Always an electoral market for taxing the other person over there, so that is why I would never be totally confident that the rules won't change.

Would op not have been able to go to university 15 yrs ago - I thought there was finance available to the dc of low paid families then? But am not familiar with the details.

SucksToBeMee Clearly you need to stop hanging out with the posh people, it’s making you think about it too much. Come slum it with us mid level earners from jumped up Poly’s.

I've mixed feelings about this. I went to university before there were fees, in fact I got a grant. So I do feel lucky to have benefited from that.

On the other hand, fewer went to university as well.

It is the expansion of the numbers going to university that make this a tough problem. Without any sort of direct cost on the students, you could argue that the poorer, uneducated sections of society (in low pay jobs) end up subsidizing the education of middle class kids studying non-vocational subjects with no obvious economic benefit to society.

I'd probably favor a system where students were fully funded for university for "strategic" subjects of obvious benefit to society / economy (possibly on a sliding scale, depending on the need), with some wiggle room for cognitively demanding courses of questionable direct benefit (e.g. classics at Oxford).

If people want to spend 3 years studying something non-rigorous with no underlying employer demand, then fine - but the taxpayer shouldn't subsidize it.

If the last 20 years proved anything, it's that the economy has no need for a workforce composed of 50% of graduates.

Oh but also, yes op you did incredibly well to be in the higher tax bracket after a year and even to be earning what you are now is much better than many grads after 4 yrs!

(You can tell I don't belong to the "that is nothing, if not earning £80k by age x you're a flop" school of thought - in reality many graduates don't earn 45k for a long time!)

I'm also saying it's not fair to make me pay back probably double what I owed them while people who are fortunate enough to be born into money pay much less

And when your kids go to uni, you can provide that privilege to them, because this system allows you to do that. (This ignores the fact that this, in fact, only happens in a tiny number of cases.). Our company offers to pay off the loans of graduates. Are you going to cry about how unfair that is too?

If you are saying it's unfair that people have more money than you and can buy advantages, then yes, you are right. Using the student loan system as the whipping boy, peddling myths to support your child, and misrepresenting the issue of interest rates which results in parents here becoming really worried about the "thousands of pounds in debt" their children leave university with. That's downright irresponsible.

Would op not have been able to go to university 15 yrs ago - I thought there was finance available to the dc of low paid families then?

All the statistics show the numbers of poorer students has increased since these changes were introduced. The amount you can borrow has risen and is more than the amount of grant you could receive.

Right, MintyMabel and SuckstobeMee - where do you guys work that either pays off their student loans, or pays such a high salary straight out of Uni? And do you have vacancies for a lazy, fat, 32 year old with a 10 year old 2:2 degree?

Yes I agree minty - the interesting thing is that overall the new system does not seem to have deterred students at all! (though as below there may be subsets who are discouraged - would be interesting to know if there is any research on that). My question was a different one - whether op would not have been able to go 15 yrs ago because of finances. Op, do you know - it is a very interesting point?

Anyway, I agree that it's very difficult - 50% of students going to university is expensive and someone has to pay for it! Re arts graduates not paying back their loans - it's complicated because as another pp has pointed out their tuition fees may be subsidising the costs of the stem courses. And if those graduates go into less well paid jobs such as teaching they may be 'repaying' in another way - and after all, it's the government sets the salary that determines they don't repay! All very complicated to work out the equity of it.

If people want to spend 3 years studying something non-rigorous with no underlying employer demand, then fine - but the taxpayer shouldn't subsidize it.

I see what you are saying, but there is an issue with that. Who decides what is a worthwhile degree? A bunch of old white men might think there is no need to offer humanities degrees which offer say, studies in African History. Do we need arts degrees? Music?

I think a better way would be for the government to offer to pay part of all of the fees for degrees which are identified as having skill shortages.

@MintyMabel

I'm afraid to say someone would just have to make those calls. The fact that it's not possible to make them "perfectly", doesn't mean that we shouldn't try. The current system is a completely inefficient allocation of resources - we are not supporting the grads the future economy needs enough.

I agree it's hard to do perfectly. And we certainly don't want a system that doesn't support the arts at all. So I'd favour some form of ring fencing so we don't go all in on those subjects whose return is most easily measured (e.g. STEM).

But we shouldn't dodge the problem just because a "perfect" solution isn't possible. The current system is the worst of all worlds.

University isn't compulsory you know.

And shock horror and adult takes out a loan to do something they are not compelled to do, doesn't look at the repayment and then bitches and moans?

@MintyMabel

Sorry, just saw the last part of your post. Not too different from what I suggested - a subsidy for strategic subjects.

I'm afraid to say someone would just have to make those calls. The fact that it's not possible to make them "perfectly", doesn't mean that we shouldn't try.

It's not about doing it perfectly. It's about the people involved and their attitude to younger generations.

30 years ago I'm sure they would have decided any computing related degree was a pointless wasted of time we shouldn't be paying for it. The damage that would have caused to our industry and economy would have far outweighed any money "wasted" on degrees you think are pointless.

Not too different from what I suggested - a subsidy for strategic subjects.

Not too different but most importantly, based on solid statistics nobody can deny. Leaves out any opinion or prejudice. We know governments don't do well when those are involved 😀

@MintyMabel

Agree, that's a danger. Whatever mechanism you used to decide where subsidies are pointed needs to be open minded enough to catch future trends. So it certainly shouldn't be composed of aging professors of whatever institutions benefited most today.

It needs to be a mix of viewpoints / insights.

And....has Jeremy Corbyn has just said that he'd scrap tuition fees? (haven't heard the actual speech though - maybe someone can confirm.)

Interesting to know where would that leave the 2012-2019 cohort - problem of inequity when you have very radical changes, particularly without a transition period. Maybe he has gone on to talk about that.

Avillage, I went to Uni in 94. Finance was available then in the form of loans - might even have been the first year of student loans - but also for some students very small grants were still available. The 'home' Council still paid the fees, that change came rather later. There was also a very very small grant for mature students.

Anyone who wanted to go to Uni badly enough could do it. I was one of those, and the 3 years between 94 and 97 were among the hardest of my life, as well as the most rewarding.

OP, you could have gone to Uni 15 years ago, though if you had very small children it would have been a bit harder. From what my fellow students said, most Unis, even back then, had creches, quite often free.

the interesting thing is that overall the new system does not seem to have deterred students at all! (though as below there may be subsets who are discouraged - would be interesting to know if there is any research on that)

There is indeed some research on that AvillageinProvence
Although applications to HE have continued to rise overall there are still some group who chose not to go to university despite having the required entry requirements. I know of one piece of research that looked specifically at ex-mining communities ( so white, working class) and it found that they didn't apply to university for the following reasons :
The were culturally adverse to debt
'people like them' didn't go to university
They viewed it as too big a risk - for them it was a huge financial outlay for no guaranteed, tangible outcome

Thanks Benes. Another interesting thing is that 'cultural aversion to debt' has long been regarded as a good thing in our society (except for mortgage lending which has a slightly different historical connotation as a lot of it has its origins in friendly societies, mutuals etc ).

So the sudden about turn in our cultural attitude - "hey, 18 yr olds! don't worry at all about £50k debt" - and debt is what we call it even if it is really a graduate tax (which it is not in some ways - see below re implications if you go abroad) - has been very disorienting for some. And the system is complicated, so no wonder not all 18 yr olds absorb that it is not like 'normal' debt.