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.

I happen to agree that not having a good apprenticeship and vocational route is the real challenge here @Longtimelurkerfinallyposts .

But imagine the prime minister who looks at the list of 130 universities and scratches a line through the bottom half. I checked the number 65 on The Times table - it’s Portsmouth for context. There would be utter uproar at all the thousands of children denied university educations every year. We want other people’s children to do vocational courses and apprenticeships as we’ve bought into Blair’s vision for British education.

Ultimately it’s us as parents who want our kids to accrue debt.

The conversion of Polys to Unis and local FE colleges into 16-18 year old hot houses has indeed ruined adult education and alternative training/studying options, especially for adults who may have wanted to change career later in life. We've basically thrown away an entire adult education industry and concentrated all resources on 16-21 year olds, and the damage is now plain to see.

Not everyone with a studen loan is a young person progressing fast up the career ladder. I took my degree as a distance learner over 6 years, and finished at the age of 55. I rarely earn enough to make any payments towards my loan, but my loan was very very small in any case.

but if you borrowed that money you should have to repay it, like any other loan. Student loan is already much more generous in the lower interest rate, very long repayment time, being written off after a set amount, having at least a year's grace before you even start repaying, repayments not kicking in until a certain level and being paused for things like maternity/illness/losing your job (I.e. when you go below the threshold)....all unlike any other loan.

people seem to forget that loan repayments aren't just tuition fees, where there is at least a vague argument that a) the subsidy is worth it because well-educated people ultimately benefit the state as a whole and b) if you haven't got a well enough paid job 10 years after graduating (as the youngest Plan 1 re-payers would be), then perhaps the degree wasn't great and so it's fair enough you shouldn't have to pay for it.

Whereas actually for Plan 1 students (as I was) the maintenance aspect was actually higher than the tuition fee element.

a 16-21 year old on an apprenticeship would have had to pay for their accommodation, food, socialising out of their pittance of an apprenticeship wage (£3.30 when I started uni in 2006), why should students get 3 years on the piss that they never have to repay, completely funded by the tax payer?

I don't like seeing the extra money come off my pay (who does!), and on reflection don't think uni really benefitted me that much but I would never dispute I didn't owe it, or shouldn't repay it.

Someone said "we knew what we were signing up for".

Well, not really. In 2008 when I took out my first student loan, the minimum salary for repayment was £15k. In 2008, this was the salary for a starting graduate job, it was seen as a good wage. Rents were cheaper, food was cheaper, bills were cheaper. Making student loan repayments on £15k a year was definitely affordable.

16 years later, rents are eye wateringly high, so are bills and food. £15k is now less than minimum wage for a full time job. The repayment salary has gone up to just over £20k for Plan 1 but this is around minimum wage for a full time job.

Minimum wage means the absolute bare minimum you can expect to live on - except we all know that's not true as most people living alone can't expect live on it because it's not enough, they end up in debt and reliant on foodbanks. Minimum wage means no disposable income for most people. This means nothing spare to make student loan repayments.

The student loan thresholds should be set at around £30k now. Everything is too expensive now and even someone on £30k isn't rolling in it.

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

I once worked out that if I stayed in the same job with a 3% annual rise (optimistic as we'd had years of pay freezes at the time) I'd have paid off my student loan at the age of 64 having paid 55,000 in repayments on an original 12,000 pounds of borrowing.

The original repayment threshold was 10,000 when I took my loan out though.

You do realise if you don't complete the degree to still have to pay the loan off? Not everyone with a student loan has a degree to show for it

I didn't plan to be earning such a low salary, but I also didn't plan to burn out in my twenties and end up with an autism diagnosis. Life doesn't always work out the way we want it to, sadly.

@Kazzyhoward There was a time when a degree meant a lot but only around 10% to 15% of young people went to University when I did. I ended up working in HE for decades and was a wet behind the ears member of junior staff in 1994 just before fees were introduced. There was never going to be a sudden demand for more graduates as the target was made 50% of young people to have a degree. Blair made a monumental mess of HE with his targets. The Conservatives had a report on HE but Blair introduced tuition fees and people conveniently forget that.

@Whatapickle23 15k was not deemed a good salary for a graduate in 2008 it was more like 30k. https://www.statista.com/statistics/1191970/annual-salary-of-graduates-in-england/

Now many end up in jobs that do not need a degree. I can think of two women I know who are close to retirement who worked their way up starting off as secretaries, no foot in the door for even a junior position in those firms now without a degree. My own Mothers job is now a graduate traineeship.

@Kazzyhoward my job requires a degree and the starting salary was NMW. Oh the joys of being an underpaid writer. But it's completely remote with flexitime and I'm a lone parent, so I stay for the work/life balance. I imagine lots of degree holding mothers do the same. Also, it's not the only job I've ever done, I used to be a teacher and education is never a waste.

Realistically how many graduates are going to be on NMW? The average graduate starting salary is £33k. Something has gone badly wrong if a graduate is on a NMW job.

@puncheur it IS wrong that graduate salaries are so low. Publishing is particularly bad for this. I blame capitalism.

I don't think that's fair at all.

There are way more graduates than their are graduate jobs.

Some graduate jobs pay NMW. It's not that degree holders are doing the same waitress jobs they did in their school summer hols.

YABU. It’s a % of your income over a certain amount so it won’t even be very much on NMW. The longer you put off paying it the worse it’ll get as the interest is shocking. I’ll finally finish paying mine off in approximately 3.5 years and it will have taken me 15 years 😥 That’s with working constantly the entire time.

Wholeheartedly agree. University is a choice and we know it costs to go. With that should come a price. Graduate tax all the way. Removes the social barrier for those from a poor background (like me) and ensures all including the high earners return money to the system for future generations.

Degrees mean nothing anymore thanks to Blair. You need a degree to work in an entry level admin job these days where before you needed to just prove you were literate and had a bit of common sense about you. That said if you've borrowed the money, and has the benefits (a university education) you should repay it.

In 2008, this was the salary for a starting graduate job, it was seen as a good wage.

This is absolutely not true. I graduated in 2005 and got a very average graduate job on £25k.

What would you think is a fair graduate tax rate though?

If the average is £33k then probably half of graduates start on less than that.

The longer you put off paying it the worse it’ll get as the interest is shocking.

Mine will get written off after 25 years, so there's absolutely no incentive to ever try and pay it off.

What a lie so many university students have been sold. Years ago if you went to university you could expect to be a high earner in which case the loan was a reasonable investment in your future. That is not the case now. There is a lovely trainee in our local beauticians who has given up trying to get a job in her chosen career, she has got a 2.1 dance degree, cannot get a dance job and now she is training to do something she could have done straight from school. Madness. Not saying all dance degrees are a waste of time but the vast majority are not going to earn money from that vocation. Bloody Tony Blair..

If graduates are earning NMW it makes one wonder the value of them doing a degree in the first place.

“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”

This is just not true.

Anyone paying into a pension is getting tax breaks.

Higher earners get bigger tax breaks.

So, if you increase your pension contributions, will this lower how much your repay on your student loan each month?