In thinking the student loan repayments thresholds are extremely unfair?

[sunfloweryy]

I started uni in 2011 so I’m on repayment plan 1. Colleague in 2012 so plan 2.

I’ve just found out that she only repays 9% of her income over £25K - mine is over £18K! So I effectively pay £700 a year more.

AIBU in thinking that’s hugely unfair? I know her loans are bigger but we aren’t in a very well paid industry anyway so it’s unlikeky either of us will ever earn enough to pay them off.

I'm a legal aid lawyer and I certainly haven't. Whether law pays well depends entirely on the specialism.

Plan 1 loans have much better terms than plan 2 loans.

I’m on plan 1, my loan is paid off now, in my last year I paid off around £7.5k, the terms of student loans are very very good.

My daughter is plan 2. She graduated 3 years ago. Her loan is now over 50k. She had paid about 100 off it and it is accruing interest at 4.5 per cent.
Nothing about student loans is fair. She is not likely to earn enough to ever pay it off.

What is unfair about them though? Although when getting a mortgage they will look at take home pay, as it's not classed as a regular loan it won't affect credit score or anything, and if she finds herself in a lower paid job for whatever reason ie going to part time in the future, she won't pay anything. But the loan system has afforded her the opportunity to go to university to improve her prospects. What would you suggest would be fairer? Free fees wouldn't be fair or sustainable by the way.

You can make anything unfair if you compare yourselves to others. It’s unfair that I graduated in 2011, yet earn less than you and your colleague and you’re moaning about being in a low paid industry. It’s not fair that my industry required a masters to progress. I started my masters a year after I graduated and did part time, as I was working there was no loan entitlement for me and I had to pay my tuition fees. It’s unfair that as I was finishing my masters they introduced loans for people studying masters part time but as I had already started the masters I couldn’t apply. It’s unfair that some people have to take the maximum amount of loan and others get tuition fees and living expenses provided by their family. Life’s unfair. But at least we have it better than our counterparts in the US. I’m sure they think it’s massively unfair that our loans do not factor into our debt the way theirs do.

It’s unfair that I graduated in 2011, yet earn less than you and your colleague and you’re moaning about being in a low paid industry.

It's not unfair that you're paid less unless you're doing the same job.
If you want to be paid more, get a better job.

Why are people so entitled?

You choose to go to university knowing that when you get a job earning a certain amount, you'll be paying back your loans.
If you're not happy to do so, don't go to university.

The country can't afford for everyone to have a free university education, and if we went back to only allowing the elites to attend university, you'd all cry that the country's going backwards and we should all have the same opportunities.

AJPT

But the points you complain about are the fairest part of the system. People only pay their loans off if they become higher earners, ie benefit financially from their education. The balance and interest charged is irrelevant as most people don't even pay off the amount they borrowed, so what they pay is unaffected whatever the interest rate or amount borrowed is. Payments are exactly the same whether she owes £50k or £50M.

Lower earners pay little or nothing, and there is no requirement to make payments if someone is not working for whatever reason. Would you rather your DD had to make a fixed payment whatever her income and was hounded for repayments that she could not afford?

The student loan 'system' is a lucrative scam for the student loan Co.

The retrospective increase in interest rates to 6% was grossly unfair and would not have been permitted in any other financial product.
The farce is that the 'unpaid' loans are part of the national debt so the usurious interest rates are effectively the government unnecessarily increasing the debt. There is absolutely no justification in the loan interest rate being above bank rate - other than increasing SLC profits.

We are fortunate to have a loan system at all.
No we're really not. Free education would be fortunate. Don't let the government pretend they're doing us a favour.

Well, you could do what I did and move abroad, then they can’t make you repay anything.

Fairest thing would be loans with interest set based on base rate + a small amount, similar to normal loans. Add in a tax on employers for every position that they require a degree for (reduce this stupid degree requirement for some jobs, promote in career skill learning) and reduce their liability if they contribute to paying off their employees loans or do more student sponsorship. E.g. loyalty schemes for every year worked company pays off 1 term of fees. Almost similar to golden handshakes some organisations pay for STEM graduates that are meant to go towards paying tuition fees, but paid straight to student loans.
Then graduates pay off their maintenance loans themselves and employers contribute to the degrees that they put as a requirement.

No i wouldn't but I would love to know how it is reasonable that she is accruing 2250 of interest each year. I mean it is what it is. Most average earners won't clear their students loans. What is the point of adding interest? Dd did 3 years and didn't even qualify for the full maintenance loan. She worked so left without personal debt.

Well, you could do what I did and move abroad, then they can’t make you repay anything.

"And let them eat cake". The only people who can afford to move abroad now that we've left the EU are the rich and very privileged. Your average somewhere-in-the-middle child of 6-9 on a typical British housing estate is not going to manage it. Not a helpful comment.