To think student loan shouldn't be deducted from nmw

[HolidayBurden]

The threshold for plan 1 is so low now that from April 33 hours a week at minimum wage will trigger the deduction. Surely they should raise the threshold now? I can't see any information regarding this changing.
the oldest plan seems the worst for this.
It is distinctly possible I've missed information about future changes and will be very grateful to any knowledgeable posters with advice.

But it's only paid on income earned above the threshold. So you're not paying 9% on everything, just whatever you earn above £22,015 (if you're referring to Plan 1).

The guidelines for repayment thresholds were clear when the loan was taken out. If NMW has risen significantly enough that many people who previously earned too little money to make repayments now earn more money, that’s a good thing overall, not a bad one. Besides which, people with a Plan 1 loan have also had a significant amount of time since obtaining their degree to advance their careers and increase their pay above NMW - as should be the case if you have a degree.

https://www.gov.uk/repaying-your-student-loan/what-you-pay
On plan 1, someone earning 33K a year will pay £84 a month. So someone earning much less will pay much less.

£11.44 x 33 hours a week x 52 weeks a year = £19,631 - well under the repayment threshold

YANBU.
It's incredibly hard when on low income to survive, then to take away more for something that won't even touch the interest rates.

Another argument for replacing loans with a graduate tax it seems to me.

Exactly this, the deductions will be very small for someone on NMW working 40 hours a week, it will be about £3 a week I think (happy to be corrected on my maths!).

The Government side has always had considerable powers to change the T&Cs

And it's only going to get more expensive for those who are repaying.

Which is shit, but I don't see any party promising a policy to reduce repayments

It’s always been clear that that was the threshold.

And for someone in £33k, £84 per month is huge especially given the cost of living in the U.K.

I'm very much a freewheeling, low tax person but I do think that student loans were a huge mistake in loading our young people with debt and also enabling the study of some totally useless degrees which were never going to benefit the student..

For those like a senior nurse and a police sergeant with student loan repayments, they are now experiencing deductions of 49-53% of their income with their pension and student loans etc, and when hitting £50k their marginal tax and deduction rate is now at 79% to 83% when allowing for tax, NI, student loan repayment, pension and child benefit tax. It is utter madness and it utterly affects and diminishes incentives to do better and earn more. Why on earth would they work additional hours when you receive £17 for every £100

I have said this on other posts, but many industries and the public sector are finding that employee behaviour is being totally driven by the student loan, tax and benefit system. We have staff reducing hours to reduce income for a variety of these reasons. When some get promoted the same happens. I am incredulous a Conservative government has presided over making work so unatractive.

So helpful @Dogdilemma2000 20+ years ago things were very different.
For many people on minimum wage, they can't manage, so every deduction has an impact. Every time minimum wage goes up the cost of living increases too so it's not always as helpful as people are led to believe.
The conversation came up last night and I wondered if the threshold was being reconsidered.
I'm not on nmw, if it makes a difference to assumptions, it just seemed an unfair situation that could easily be rectified but hadn't seen anything about changes hence asking.

Totally this. I'd need my next pay ruse to be about 25k to make it worth it. Because otherwise for the first 10k you actually lose money and barely break even on the next 10. When you consider actual take home pay as well as the demands of promotion/ returning full time it does seem quite anti tory and madness this gov has done, Blair esque.

So why aren't you also arguing that people onNMW not pay tax and NI? Why is it just student loans that you think they shouldn't pay?

Nail on the head. There are so many "pinch points" at all different income levels where working extra hours or taking a promotion, etc., is just not worth it. And yes, workers are deliberately reducing their hours etc as they realise the loss in net wages isn't much and they decide their time off is worth more than a bit of extra money, even moreso with costs of commuting or loss of free childcare or child benefit. Likewise, I can't believe that this has happened under a Tory government. They're insane. We have a shortage of workers, yet the tax/benefits system actually encourages people to work less and not get promotions/better jobs, etc.

I do have to wonder why someone who has been to Uni and has a degree would be working on a minimum wage job? It does seem to have been a waste of 3 years additional education to do a job that anyone could do.

ni & tax affect everyone, and the thresholds have historically been adjusted. This is the first time this particular situation has arisen to my knowledge.
circumstances change. The person that brought this up in conversation took a lower paid job because it worked better for her than the childcare costs that she ended up solely responsible for because she lost her husband suddenly and much younger than anyone would anticipate. Things happen unfortunately.

It’s a tough situation, but whatever the threshold is set at there will always be some people who believe the threshold is too low for their personal situation - and systems ultimately can’t be amended to fit everyone’s extenuating circumstances. Somebody above thinks that paying £84 a month on an income of £33k is too high. Should the threshold therefore be set above £33k? Should single people be able to begin paying at a higher threshold than somebody in a couple, because single people are trying to run a household on only one salary, which is much harder?

Why shouldn't it? If you're only working a minimum wage job what was the point in going to uni?

My plan wasn't to be in a min wage job but things happen
At uni I didn't have my entire career mapped out or know I would develop health issues

We do want it all ways.. There is uproar because of the large numbers of international students on the best degrees in the finest universities because these places should be going to UK resident student.
But at the same time we don’t want to pay more for university tuition and envy Scotland who don’t. Those international students are subbing the UK students.
Then there’s the uncomfortable fact that a whole swathe of university degrees are of varying quality and don’t change the income levels for the students in question. Your friend on NMW is an example unless just literally starting off.

Fair enough, but you took out a loan so it should be paid back.

The issue with international students is that universities are offering them places with poor grades, then denying British students with better and even excellent grades.
And they do this because the universities can charge international students a heck of a lot more than British students.
It's a money making scheme, with our youth being disadvantaged.

I went to university 20 years ago. I have £10k in student debt. I’ve only just hit the repayment threshold again after being made redundant 10 years ago and subsequently retraining.

We knew what we were signing up to, why should we not pay it back just because minimum wage has risen?

Yes, universities 'make money' for the UK economy, by charging higher fees to international students. This provides lots of jobs for British workers, of all kinds (not just academics, but all the support staff required to run an institution.
I don't believe our "youth are being disadvantaged" by not being offered university places. They're disadvantaged by not having decent apprenticeship schemes and other forms of education/ training available to them.
Going on to university isn't essential, a 'right' or necessarily the best thing for everyone. There are many of us who don't have degrees but have managed to find fulfilling work (that pays above NMW) and this is what I would wish for young people.

And still getting off lightly as paying student loan of a few pounds per week will never come close to actually paying the amount outstanding of the loan - it will still eventually get written off after the requisite number of years.