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.

That's interesting benes. To me 15 hours work a week in termtime sounds enough to have an effect on academic results relative to those who are not having to do paid work. Maybe the difference between degree grades, taken cumulatively over 3 yrs.

But I do take the point that if you have to fit in paid work it may encourage you to be better organised. (If it's possible - on some courses I think it really isn't, without jeopardising your degree studies.)

It depends on the degree subject though avillage and the time of year.
I used to employ students to work as student ambassadors. It was well paid and they weren't allowed to work more than 15 hours in term time. It was actually beneficial in helping them develop employability skills and it didn't appear to have a detrimental effect on grades.

DoctorAllcome have you ever read anything by Stefan Collini? He is probably the UK’s most well known academic critic of the changes to the university funding system - there is a good article here - www.lrb.co.uk/v35/n20/stefan-collini/sold-out

It’s a subscription article but you should be able to access just one article as a guest. I didn’t realise you were an advocate of the US system.

@AvillageinProvence - I don't buy into this poor little students idea at all; term times are short, they're adults and of course they should work. Fitting in paid work paid my living costs and got me things to talk about on my CV, including specific management responsibilities that gave me huge steps up in applying for jobs after graduation. Frankly, I was a bit stunned by the few who didn't work while I was at uni, but it was normal for most to do something small term time and everyone picked up temp work in holidays, even those with wealthy parents. Just 20 or so later we've got people talking as though it's normal for kids not to work at uni because they can get much bigger loans. I don't think it's helpful to them at all and from experience those kids struggle in graduate interviews compared to their peers who have worked and studied, so it's silly if their intent is getting on better in life. At the very least they should go and do some work in the summer, then use that money for expenses rather than holidays. (Certain particularly arduous courses like medicine excepted, but they have work experience included anyway.) Even from 16 years old, I will expect DS to be doing something productive a few hours per week; babysitting, gardening, saturday job or whatever, because I know how each employment step helps in reaching the next one.

I@Figmentofmyimagination

I will definitely read that (no sarcasm...for real I will)
I’m not an advocate of the US system per se, I think student loans are a crisis here and we do need a better system. I was just pointing out that it does get good results- top well funded universities, leading academic minds, etc.

I think the U.K. system is fairer than the US system from inequality/justice standpoint. Results are also good in the U.K. as you too have top universities and leading academic minds.

I am just saying that having degree level education as pay your own way (entirely in US or partially in U.K.), does not mean a failure to get good results....those being leading universities, cutting edge research, top academics in residence, etc.

What we (US) should change to, I am not sure but I don’t want to sacrifice the successful results.

@MRex

Your fees would have been under £10k. If you'd paid your own living costs by working then your loan WOULD have been £38k when you finished.

I did work 2 jobs before uni and save, ad-hoc jobs during term time via the student union, and over every single summer.

My loan after uni was still 50k.

And again, the loan terms were not clear before/while studying. No one I knew realised we'd be getting max interest during the study period. We weren't able to access student loan statements until the financial year AFTER we graduated so loan and interest amount was a giant black hole for 4 years. We also have no way of predicting how high RPI would get. Easy to suggest what we should have done only when the this information has been revealed.

The thing about working during term time - am i right in thinking that there is some evidence (or at least concern expressed by academic staff) that students who work more than a few hours a week in term time do jeopardise their chances of getting the best results?

This is completely correct. My student union would infact not employ any students for over 15 hours a week for this very reason.

Somehow I'm being told I should jeapodise my education because of my background. I already did this before uni with my permanent jobs because I wanted to be able to fully focus at uni and give myself the best chance of succeeding.

I believe it should not be like this. It encourages the poor to stay poor.

Unless, are you proposing the government make all university education free?

I've covered this multiple times over my previous posts. I'm not proposing this. I'm proposing a lower interest rate on loans OR lower tuition fees. Either of them would make it much more viable to actually pay off the loan.

@AvillageinProvence @DoctorAllcome

^ I forgot to tag you both in my previous reply, sorry.

*I did work 2 jobs before uni and save, ad-hoc jobs during term time via the student union, and over every single summer.

My loan after uni was still 50k.*
It isn't amazing to have worked in the summer, why the hell should you not have done? Why didn't you work Christmas and Easter breaks? I did. What did you do at weekends? I worked and obviously worked over 15 hours per week because there weren't loans, I had no grant and I had bills to pay. I also had time to study and to go out partying, just the same as when I was working very long hours after graduating. Terms are short and you were young enough to easily do lots of hours in holidays to make up shortfall hours during term time; weekend and overtime supplements are a bonus. I can see you wouldn't be able to save up for a pension nor pay for kids, but it isn't credible that you worked hard and still couldn't pay rent & bills in a cheap shared flat plus secondhand books and some fun. Look around you at young adults who don't go to uni yet are managing to do exactly that.

I suspect the issue is you've always been in the habit of spending what you have, because your current salary doesn't add up to the poverty you're expressing either. At take-home of £2700, you can comfortably live on £1700 even with the loan repayment, plus you say you're giving your parents £500. So what's the other £500 being spent on?

I'm sorry if I seem harsh, but it is in your interests to take responsibility for your own financial welfare. Step back and calmly assess your finances; set up financial goals and reduce your costs.

@MRex

Thanks for all the sweeping assumptions that are completely incorrect.

I can see you wouldn't be able to save up for a pension nor pay for kids

I suspect the issue is you've always been in the habit of spending what you have

All the furthest from the truth. I'm sitting here laughing at the suggestions I'm lazy and bad with money. I can't be bothered to sit here and list all the evidence that I'm neither of these. You can carry on warping everything I've said in these posts and making incorrect judgements if you like.

your current salary doesn't add up to the poverty you're expressing either

I didn't say at any point that I currently live in poverty. I definitely DO NOT live in poverty now. I also definitely do not live in luxury. I said I do not have a spare £600 a month to make enough of a dent in the loan to pay it off in a decent amount of time, which might not even be enough depending on if the interest rate goes up. At this point you're making stuff up.

set up financial goals and reduce your costs.

My exact point. The suggestion here is I should live like I'm on a much lower salary, a salary that is probably in line with what I would have gotten if I didn't go to uni, for the next 20 years. Keeping the working class working class. This is my precise argument why the current loan system is unfair.

According to the advice on Facebook, for some people in some circumstances, taking out a maintenance loan can be compulsory.

If someone has a disability that prevents them attending a physical university, they may be entitled to a maintenance loan to support studying full-time at home with the Open University. However, if that person is on UC, their UC will be be reduced to account for that loan, whether they apply for it or not.

People are forced to have a maintenance loan with you know, interest, instead of the UC they're entitled to. How is that not punishing people for studying while being poor?

Oh, and the situation may still arise if you study part-time with the OU, too.

@SucksToBeMee - OK, I'm out. You're determined not to consider any options around your finances to improve your own financial position long-term, you only want to moan. Go ahead, enjoy!

I'm glad you're out @MRex. This post was never about improving my financial situation. It was how the current loan system is not fair.

At no point have I thrown personal insults towards you like you have to me.

Let's agree to disagree.

The current loan system is not fair? In what way? Compared to prior generations who had free university education? Or compared to your counterparts in the US or Australia?
How would lower interest rates or lower fees affect “fairness”?

Honestly, to you OP “fair” seems to be defined by the less you personally pay, the more fair it is. That’s not actually fairness.

Even kids from “other backgrounds” pay more than you. If they pay the £50k up front, that has the same value as paying £436/mo for 25yrs based what it would grow to if just saved and not spent.

And what are you paying? Approximately £160 each month if your income is £47k and after what is it 30yrs, the rest of the loan is written off entirely. You are getting a very fair deal that is largely subsidised by the taxpayers....both working class never had the chance to go to university and the rich kid who has already paid for 100% of the costs.

I doubt that going without £160/mo means you are living with a salary in line with what you would have earned if you had not gone to university because that’s still £45k/yr.

It’s like talking to a brick wall @SucksToBeMee

As other posters have commented, you’re committed to your rant and blind to reason. I lived like a pauper to pay it off because i didn’t want it hanging over me. If you didn’t understand it, you should have obtained more information - the fact is, your debt, your failure to inform yourself. You could have worked more than 15hrs a week, you chose not to and caused your own financial situation. I’m highlighting the interest rate as you keep moaning about how insurmountable 6.6% is, and I’m stating I survived 7%. I didn’t want to work in a minimum wage job with no opportunities and took the opportunity to grow my prospects in exchange for a loan. You claim you wanted the same, but somehow think you’re special and deserve concessions. I personally think the interest rate is reasonable given there’s no guarantee that their investment on you will be returned in the form of repayments or taxes.

It's very unhealthy and not fair.
It's a huge debt for anyone to carry no matter what money saving man says.

It's also not going to be the only drain on your wage, along with mortgage, rent, car, living, insurance etc etc etc.

Awful.

YANBU at all. Point of government backed student loans should be interest rates LOWER than commercial, not hugely higher. We pay 1% interest on our mortgage; why does the government think middle-class people buying houses is more important than education?

If you didn’t understand it, you should have obtained more information - the fact is, your debt, your failure to inform yourself.

I do think that 18, and in some cases even 17, is young to have been expected to understand all the details of the new scheme/contract introduced for the 2012 cohort at that time, particularly as such large amounts are involved. Afair, what was not emphasised was that the lender (ie the government) could change terms such as whether payment thresholds would rise, at any time during the 30 yrs. Instead, again afaicr, the emphasis was quite 'hey everyone, you won't have to repay unless you earn x!'. Fine - although what happens if you do earn x is also important.

And yes, it's true that 18 yr olds are adults - although the scheme itself seems ambivalent about that, as the means testing is based on the expectation that families will support their 21 and 22 yr olds. Which is another source of difficulty for those students whose parents don't make up the contribution - although that's side tracking the thread somewhat!

@DoctorAllcome

Honestly, to you OP “fair” seems to be defined by the less you personally pay, the more fair it is. That’s not actually fairness.

I assume you haven't read my previous posts.

I deem fair as paying back what is owed, not twice as much. If I was paying back my loan plus inflation/a reasonable interest rate then that's what I deem fair. That's not what I'm doing now.

A lot of posters suggesting I'm not listening to what they're saying when they're not listening what I'm saying at all.

I'm not sure I want to put the effort into repeating myself 30 times over because posters are in cycle commenting the same things and missing my explainations. So thinking of leaving this thread to die it's death now.

I think it is also important to bear in mind the extraordinary mis-selling that has gone into the promotion of these loans - the next mis-selling scandal imho - people coming into school, sanctioned by the government, encouraging young people not to think of these loans as ‘debt’ and never mentioning (let alone attempting to explain) the high interest rates and how they will impact life long on middle earners - most of whom WILL end up repaying their debt, several times over. I recall UCU trying to cut through all the misinformation on the actual cost of the loan without much success. Even on this board, well known HE posters used to leap on anyone who suggested that young people were being shafted by this system. The truth is that for the overwhelming majority there is no realistic alternative.

It is an egregious system. The OP is right. Quite apart from anything else, it ruptures the social contract, that is based on education as a public good. If I was, for example, a young trained doctor or nurse, I would not think twice about taking my skills outside the NHS.

And it discourages children from studying the humanities, to our eternal, short-sighted shame.

Comparisons with the rest of Europe are interesting - how do other Euro countries have much lower tuition fees? Are they subsidised; are they open to 50% of school leavers; are there the same number of contact hours or are things run more cheaply there?

Ds went to uni in 2014. I had done research on how the loans worked, and decided at worst he would take a maintenance loan. When we looked at the level he would get, it wasn't worth it, so we funded him.

The information was there if you looked...and I made sure I did.

OP If your loan is written off before you've paid it back, then it matters not what the interest rate is. You are repaying something to the public purse, even if it is not what you borrowed.

Out of curiosity @scaryteacher, what would you have suggested your DS done if you weren't able to fund him/part fund him?

Also, it's nice that you put all the research in to the loan system for your DS. If you didn't do that, do you think his 17 year old self would have done the same? My parents had no clue about this stuff.

@Figmentofmyimagination the mis-selling is what I've been trying to explain and a lot of people do not understand. It is clearer now than before but still not transparent. When I went to uni in 2012 and the loans were first being introduced it was like a black hole. I'm not even sure the government knew exactly how it was going to work at that point.

Other EU countries pay more tax, Avillageinprovence.

The top rate in Denmark is over 60%.