To think student loan shouldn't be deducted from nmw

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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.

Lots of industries pay very low salaries for jobs that require degrees. I have trainee accountant friends with degrees, and paralegal friends with 1-2 degrees, who earn barely above minimum wage. I have other friends who did degrees and haven't managed to find a relevant job and are working minimum wage jobs while they keep looking for work relevant to their degrees.
I finished uni about 9 years ago and have only just started earning enough to pay a very tiny student loan contribution myself. There has been several times in my career where I've had a pay rise as minimum wage was rising to above what I was bring paid, and my wage then went up to 30p-80p over minimum wage.

Trainee accountants and paralegals on barely above NMW is short term and temporary, until they’re fully qualified. And in the meantime they’ll be paying a few pounds a month towards their loans, safe in the knowledge that their loan-funded education will have an enormously positive impact on their career and future income.

Most graduates don’t end up doing work directly relevant to their degree. I have a history degree; I work in corporate legal in insurance. DH has a fine art degree; he works in tech. If people are consigning themselves to NMW jobs for years until they find the perfect job which is relevant enough to their degree for them to consider it worthwhile, that’s a choice - not an unfortunate circumstance which should mitigate them needing to pay back their loans.

Im not an economist but I'd be thinking something like 2-3% for a set period of time e.g. 20 or 25 years so all pay back for same time and all contribute proportionally.

@Beezknees I never said it shouldn't? I just replied to why I went to uni

@ComtesseDeSpair I've got a degree in English with TEFL, a PGCE in Secondary English and I'm currently doing a part time online MA in creative writing whilst working in publishing. Since graduating I've taught in the UK and overseas. I now work in educational publishing. All relevant to my degrees. All fulltime work. I've never earned more than 22K.

I worked for the NHS as a band 3 for 11 years
Developed some health issues
Lost my job
Got whatever job I could take which happens to be min wage but are incredibly flexible with reasonable adjustments

I have a lot of qualifications but am qualified for nothing if that makes sense. Jobs around me are around 24k, the only things with more pay usually list stuff like 5 years experience in X dept, related degree or a qualification I don't have etc

Then honestly, if you’re earning minimum wage and will have spent the better part of a decade in higher education to get there, I don’t think you’re in the right line of work for your skill set. At 18, for a first degree, that’s understandable. Many of us don’t know what our skill set is at 18. But choosing to take further expensive and time consuming qualifications which don’t appear to be enhancing your career is madness.

If the reason you’ve chosen to stay with what you do despite the low pay is because you love it so much - then that’s fine. But that’s still a choice, not an unfortunate circumstance.

How do they work it out if you're term time? I've recently started paying mine back after a small pay rise. Never paid it before but now I'm paying £40 a month?!

It’s based on your overall annual income. Even if you’re only paid for term time hours, your annual salary will be over the threshold.

Here's a few I just picked off indeed

In house surveyor (I'm not a surveyor so scrap that) 27k
Legal assistant (they want experience and it's less holidays than I get now) 24k
Service coordinator (10hrs days which I can't manage) 24k
Accounts assistant (I've no experience in that which they want and they also want proven use of a specific system) 25k
PA to a managing director (ability to travel which I can't, and experience in project management) 25-30k

I could carry on but it's more of the same

It can take years to find a training contract, especially if you live somewhere where there aren't many firms hiring. Some careers, like law, require further qualifications past your undergraduate degree and I know a lot of people who have spent 2 years doing those qualifications part time while working full time at about minimum wage, before they can even apply for some training contracts.
For the record, I don't disagree with repaying student loans at all. I was just explaining why some people with degrees are on minimum wage/not far off minimum wage.
I'm on Plan 2 so my threshold is higher than minimum wage and I won't pay it off before it gets to written off. I actually think the system doesn't work and they should either have it as a separate graduate tax that kicks in as soon as you get a job, or reduce the threshold. I'm 9 years into my career and am only now paying it off a few pounds per month.

@ComtesseDeSpair My skill set is English and education. I'm a search engine optimisation digital copywriter for an international educational publisher. It couldn't be more inline with my skill set. However, it's horrifically underpaid. It has other perks and I have my (non financial) reasons for staying. I don't regret my qualifications. Im just explaining how many highly qualified people in graduate jobs are paid about the same as a waitress.

@ComtesseDeSpair and you never know, maybe my MA in creative writing will help me write a best seller or two.

That'd end up with me paying 1/5 of what I currently do (high earner) but someone on 20k paying substantially more than what they currently pay (which is nothing from what I can see). I mean...good for me, but don't think the underpaid would be delighted about it!

Personally I think that student loans are unfair. I understand that the loan has to be paid back but the interest I accrued while studying and thereafter was grossly mis-sold and a significant amount. We were told paying back was like buying a trolley of shopping now and paying for a bag of shopping at the future but actually it grew by £120 a month before we even had the chance to pay it back. When I did hit the threshold, despite paying it back it still grew. It's now going down but it's a significant amount that comes out of my pay and annoys me every month as if it was a loan that worked the way any other did, it would be long paid off now at a similar monthly payment.

The other problem is that while NMW has increased, the rate for administrators and similar roles (not entry level because they ask for years of experience) have not gone up at the same rate so people will probably be driven out of that particular level of workforce.

A further problem is that many degrees mean fuck all now. I certainly won't be pushing my daughter to go. There are very few people I went to uni with or have met since that have a job they trained in or they needed a degree to get.

The threshold should rise in line with the times. That seems fair.

Part of the argument for asking graduates to (partly) pay for their degree, apart from fairness, was to drive up quality - the idea was that people would be less likely to study business or film studies at a 3rd rate institution if it meant having to repay that money over the course of their career.

I'm not sure we've reached that point, tbh. Most graduates never pay back the full amount, and there seem to be as many young people going to university with poor grades at A-level as before things changed.

The aim of the state subsidising educating people to degree level is to create useful workers that add value to society through using the knowledge or skills they learned at university. If they then go on to work in manual jobs or call centres then what has society gained from their degree? They might as well not have bothered.

I agree. We signed those contracts for an enormous loan when we were 17 years old! I was the first in my family to go to uni, no one to advise me except for sixth form teachers who were just saying "no matter what you study, just GO TO UNI!".

That was our career advice and it remains so for most. I did an arts degree, a 'mickey mouse degree' although I didn't know that at 17 years old.

Going to uni didn't make me one iota more employable

@KvotheTheBloodless my DH is an academic and my DB was one too, both have said that attitudes from students changed almost instantly once the tuition fees increased. Universities are shitting themselves about funding, so they've adopted a mindset that the customer (student) is always right. Academics are discouraged from failing poor essays and assignments, the expectations from students has gone down, and then students are graduating with lower skills than were expected from them a decade earlier.

Not everyone is academic, and yet children are overwhelmingly pushed towards university and saddled with decades of debt hanging over them. No-one really seems to be benefitting from this system, universities are drowning, academics are overworked and stressed, graduates are being handed meaningless degrees, and society doesn't benefit overall because the degrees are largely worthless.

We need more diverse training and career paths for children once they leave education, rather than ushering them into universities.

I also agree with a PP that the interest on the loans is needlessly high - I'm a high earner and yet will probably never be able to clear my loan current interest rate, but will definitely be able to pay back the original loaned amount and a substantial amount on top. Pretty depressing, so I try not to think about it!

Higher earners definitely do not get bigger tax breaks. This is absolutely untrue

Yes! This was very much the mantra of the time and I think part of the problem. I picked something that seemed interesting (and was but not as interesting as the pub) but had little to no plan. I thought I'd be like Halle berry in gothika... lol!

but with a set graduate tax this would mean

• someone who did a 3 year course vs someone who did a 7 year one
• someone who lived at home and therefore wouldn't take any maintenance loan under the current system vs someone who moved to London (who would borrow £39k for a 3 year, £91k for 7 years)
• someone whose parents paid their entire tuition fees and maintenance upfront so didn't take a penny from the state

would all pay exactly the same % of their wage as tax. How would that be fair?

Plus how about people who never actually graduated? Would they not have to pay a graduate tax - in which case surely everyone would sign up to 2 and a half years of free bed and boarded funded by the tax payer, then drop out just before they got to the end?

How about people who studied in a different country (including Scotland where tuition fees are different) but then moved to England? Would they have to pay it? Or vice versa, someone who graduated here but then moves abroad?

Plus if your main problem is unaffordability you've just made it worse - if you're only earning minimum wage, or not much more, 3% of that on top of 20% for tax 11% NI, 5% pension etc would soon add up. Currently someone on £23k would only be paying back £84 a year - if you introduced your 3% tax idea that would increase to £690!

At least now the system is clear - you pay back what you took out, plus interest. Someone who borrowed more owes more.

I really also wish there was a graduate tax
I pay them £400 a month from my salary. I keep paying and barely any comes off the capital. I owe them 40,000

Your point of parents who pay tuition fees is exactly why a graduate tax is fairer. I came out of uni with a far larger debt than my privately educated counterparts with affulent parents, in comparison to my single parent working class background on full loans. The current system actually puts me further behind my supposed equals with the same degree due to their parents wealth. If you elect to go to uni and know tou are paying x amount for y years you can make an informed choice regardless of whether you go on to a minimum wage job or higher earnings. For going to uni you should make a contribution back unlike those who don't go. Whether there is a different amount for how many years you are there, or your employer pays you additional to offset the cost could be discussed but a graduate tax in my opinion is the fairest way.

@Fahdidahlia But the number of parents who pay their kid's tuition fees and maintenance is minuscule compared to the general student population, so you'd be penalising graduates on lower incomes (as they'll now have to pay substantially more than they currently do) for not much payoff in the interests of making things a bit 'fairer'...

The interest on student loans makes absolutely no sense to me. Almost every single person I know who earns enough to start "paying" theirs doesn't even pay off the interest each month!