To not feel very sorry for some student loan whiners

[Viviennemary]

There's been a lot of complaining about student loans and its wrong they seemed to have move the goalposts re paying back. StillI I read about this woman complaining her student loan is £120k and is going up every year. She was a student for 10 years fgs. Just as well the tax payer wasn't funding her. I hope these folk arent just going to be let away with not paying.

Another Tory mess left for Labour to sort out and fund.

As you say, its going to be a disaster for the NHS, already understaffed.

I do agree with this in principle but there’s some schemes like this and little monitoring of impact eg physics bursaries to train but kk requirement to actually teach at the end of it - DfE claim not to know how many are still teaching 5 years later for example

there are limited schemes that work well eg MFL in Bradford a few years ago had their loans paid while they worked which seems a good part way ie their payment was calculated and paid for then each month

Also, day one interest is a part of the problem eap
for plan 2. Imo it should accrue from the end of your course

This is a ridiculous statement.

Plenty of very worthwhile jobs need a degree but don't necessarily carry a huge salary - public sector roles for one, particularly in education.

My DD is a RG law student, but because she wants to do something worthwhile (human rights) rather than make bank selling her soul in corporate law, her income may never hit the levels some would expect of a career in law.

I do have some sympathy. These are often 18 year old kids that get lured in. Successive governments have royally stitched up the working class by encouraging everyone to go to uni.Their parents are often proud but clueless, so they end up with a useless degree from a substandard poly in a hugely oversaturated graduate job market with a mountain of debt.

Yep. I don't think she has a clue...

Plus people that age weren’t told they’d have to take out student debt, as they didn’t have to. You can’t give over 50s who went to Uni a debt they didn’t sign up to.

They might have decided not to go if they’d know.

Plus many who went at that time got grants, which I know was lucky, but therefore lived very frugally.

All that being said, I agree that student debt has got out of hand and that changing terms is very unfair.

My exh and did make sure to put some money away every month for our dc from birth- and prioritised it even during times when we didn’t really have the funds to spare. I’m glad we did now.

Agreed

She might not even get a job! Law has been heavily over saturated for years!

Plus people that age weren’t told they’d have to take out student debt, as they didn’t have to. You can’t give over 50s who went to Uni a debt they didn’t sign up to

But we are giving young people debt they didn’t sign up for.

It’s about the bigger picture, do you want an educated society or not?

Plus many who went at that time got grants, which I know was lucky, but therefore lived very frugally

Living frugally doesn’t negate the impact of interest.

Yet it will be that age group and older who will be using the NHS more and more, relying on others who did go to University.

Entitlement personified.

I was at uni when student loans were first brought in, the interest rates back then made it virtually free borrowing. I had zero help from my parents so did work in hotels, pubs etc and had summer jobs to help make ends meet but I would have been screwed without the student loans. I payed them back within three years of graduating but with the interest rates on the capital so low you could put a decent dent in the outstanding amount each month. Today it is just a racket.

Quite

You’ve got no option but to live frugally if you’ve got an ever increasing debt.

But living frugally won’t stop the interest on these student loans increasing. It’s ridiculous to compare today’s costs to grants in the past

Good question (that you won't get an answer to as this poster never answers).

Thanks for that vote of confidence!

DD is a force of nature and I've no doubt she'll get where she wants to be eventually, but we're under no illusions that it will be a long, hard road and even when she gets there barristers are self employed so income and job security is not guaranteed.

I agree that the loans are a scandal but an equal outrage is the marketing of substandard university educations to a sizeable proportion of students who didn't exactly shine academically in school or college. While it might be fun to be a university for 3 years some young people are ending up with a crippling debt for a qualification that isn't worth the paper it's written on. A root and branch review of the system is needed, poor universities need to improve or close and young people need to be helped to make decisions that are appropriate for their abilities rather than charging them to prop up a failing system.

I don’t think it’s about understanding interest alone. At 17/18 kids have been consistently told for their whole life that education matters. They’re pressured through exams in school with the message that their results will influence their whole lives.

That continues with decisions around further and higher education - when you’re looking at your future career, and there’s a pipeline into uni it takes a lot to realise the degree you want to do won’t lead directly to employment but will leave you in debt for decades.

The student “experience” is considered a rite of passage now too, something to bridge the transition into adulthood. Student loans are sold as a fact of life to facilitate that transition rather than it being a significant debt.

Many much needed professions require a degree, it’s ok to say don’t go to uni but we do need doctors, nurses, social workers, teachers, OTs etc.

I studied as a mature student and paid fees for and under grad, post grad and masters - studying while working full time. If I had my time again I’d probably do the same and am encouraging my kids to really think about whether they want to go to uni from school, or wait until they’re sure they know what they want to do for work.

Add in the number of young people who really struggle with uni straight from school and it seems better to take a break from education, have some time to mature and then do a degree if needed. But that’s quite counter cultural in a world where schools, parents and wider society funnel kids through school and into uni almost without a second thought.

Yes there’s an inherent problem in the structure of the system in that to reduce the escalating interest and the overall amount you pay back, you need to pay back as much as possible as soon as possible. But people aren’t incentivised to do that because there’s always the chance (approx 50% with Plan 2) that the debt will be cancelled. Reducing the threshold (or not increasing it with inflation) could be seen as a good thing because you pay back faster and pay less interest, but it’s painful today and may not have been necessary if the debt is going to be cancelled.

The system has these inbuilt perverse incentives which I don’t think people understand and so don’t value in a theoretical monetary sense. (Eg it really doesn’t matter the size of your loan if you are in a middling paid job such as a teacher because you will never pay it off and it will be cancelled - so loans to people in these important professions are subsidised more by the taxpayer - but psychologically it’s horrible.)

If the loans were structured like mortgages and people could choose their lender and knew they would have to pay back whatever they borrowed, they would be easier for everyone to understand. And then people might think a bit more about whether university actually makes sense - which course, which location, do you need to live away from home, do you need to do a masters, do you need to spend so much on student life, shld you get a part time job and so on. I think this would also put pressure on unis to vary their fees and really think about what their courses offer. This may make some courses a lot more expensive and so govt support would need to also be more carefully targeted.

People often compare our system to other countries, but in most of Europe a lot of students live at home and go to their local university so it’s a lot cheaper - if you take away the maintenance element of the loans, student debt would be a lot less. Should a student who lives in London get loans to study in Manchester when they have good unis on their doorstep, should someone who lives in Cambridge be subsidised to go and study in Oxford? People who don’t go to university don’t get govt loans to go and live in another city for a better job. These are all difficult issues but they make our system more expensive. We always think of the US unis being horrendously expensive, but people can go to their in-state university (many of which are excellent) and pay much lower fees. There is also a tradition of parents saving for their children’s education and they get tax breaks to do it.

We have the worst of all worlds.

50% of people going to university is probably too much though even if you want an educated society.

And if we are talking about an educated society what do we actually mean here? A lot of criticism has been levelled at how younger generations have been taught to pass exams rather than think critically or apply practical lessons to real life. Or have practical life skills generally.

And then we have huge numbers of people who don't understand how mortgages and pensions work even though they went to uni.

An educated society doesn't necessarily mean university educated. In terms of practical life skills we've definitely regressed as a society and this doesn't help. What was expected of 14 year olds as a society is massively less now than it was decades ago and I think we should be thinking about this as much as thinking about university education as there's actually links to the state of society as a whole on many levels.

Our values about what we consider and prioritise as education are very much part of the problem. We have a society which looks down it's nose at 'the uneducated' yet we had many people who achieved professional careers who left school at age 14 or 15 who will eclipse this generation of degree educated kids. This matters too.

If you don't go to uni, there's an attitude of 'youve already failed' and barriers are up that weren't there even a generation ago. That's wrong. I don't think we are getting a generation of workers who are necessarily better.

I know how many employers don't like taking on fresh graduates because they have no idea how to do anything in the workplace as their knowledge isn't transferable directly from the classroom. So they want people with experience instead. Which creates the whole catch 22 of how do you get experience if you can't get a job in your field.

In reality we have lots of people with degrees in areas we don't have enough jobs for and we have a short of educated people in other areas but we still can't give them a job because there's a lack of places in the vocational training part of that career. There's more people who want to be doctors and midwives etc than places to train and yet we still have a shortage of doctors and midwives!

Our whole education and employment structure is off. And tbh I think this is where issues really lie rather than actually with faults in the student loan system itself.

That’s absolutely shocking

And just to add, the first of those on Plan 5 loans will graduate this summer and the repayment threshold for them is even lower than for Plan 2 loans. So from September, you will have 2 people sitting next to each other being paid the same and the person on Plan 5 will take home less per month than the person on Plan 2. The press hasn’t even begun to cover that yet…….

Add in the number of young people who really struggle with uni straight from school and it seems better to take a break from education, have some time to mature and then do a degree if needed. But that’s quite counter cultural in a world where schools, parents and wider society funnel kids through school and into uni almost without a second thought.

Another issue is trying to find work, iys very difficult for young people to find regular employment now.

I was one of the last years of plan 1 so do consider myself lucky (graduated with 20k rather than 70k of debt) and still I've long since felt my cohort was mis-sold. I remember all of sixth form being given a presentation about how it "wasn't real debt". I did have a vague understanding of the terms, insofar as a 17 year old can, but I certainly didn't expect the interest to ever rise to 6.25% (worse than my mortgage) or consider the motherhood penalty as someone else has pointed out. DH paid his off late 20s, but after two maternity leaves and returning to work part time, mine was stuck at 20k (I was just paying the interest off) for a decade. What happened next was I quite quickly got two promotions, my monthly payments went up a lot just as the interest went up to 6.25% and it then became likely that I would pay it off, but only just before the 25y mark when it would be written off. Therefore I found myself in the position where it was actually worth over-paying. I have now cleared it, using some available cash from a house move. The prevailing advice was that it wasn't worth over-paying, but crunching the numbers for me it definitely was. And my loan was at a size where there was actually possible.

The system is so very unfair, especially for people on plan 2 loans who are working in jobs that are essential for society (nurses, teachers etc) but their debt continues to grow, they face even higher interest rates, the thresholds and terms are being changed after the fact, and they will face a marginal tax rate of ~60% for most of their careers.