Student loan repayments are completely unfair

[Sammy900]

I've thought for ages that student loan repayments are a complete rip off. I'm so glad they are now all going under review.

They were mis-sold at the time as a minor "graduate tax" that you'll barely notice and there weren't any other options available to enable low income households fair access to higher education.

I didn't realise then that this would turn into a lifelong debt, with snowballing interest that makes it impossible to clear.

I'm on the original plan 1 which just goes on and on until I'm 65.

The next plan 1 deal after 2006 then decided that 25 years was a fair term (not 47 years!!). Such a huge difference in what will be paid back.

Any other standard loans have much shorter terms.

It was based on the assumption that you would continue to be a low earner for the rest of your life and not move up the career ladder.

I really think that the government / treasury should look into the fairness of the terms of the original plan 1 loans too not just Plan 2.

I think you can submit your case to your local MP and with the treasury committee if you feel that you are paying back a student loan on unfair terms and now is the time to do so.

I really hope this gains momentum and something can be done about it finally.

What are your thoughts?

This pains me 😟 How is it right that our Drs are so skint and start off on the back foot after all that hard work studying medicine.

@Sammy900They really are not skint! Look at the salaries before you say that and the huge uplifts they have had. Much better than millions of others. I’d pop that violin away. The salaries are brilliant in cheaper areas. House buying - no issue at all. People are skint because they spend. Other people are skint because they are on minimum wage. Guess which one a doctor is? They are using their degree and are set up for life with an amazing pension to look forward to. Try being self employed and watch your pension pot plummet as they have recently! No doctor has to worry about that in their lifetime.

This is has some helpful (and more optimistic) information about graduate employment:

https://www.bigissue.com/news/social-justice/universities-graduates-on-benefits/

Thankyou I'll take a look

It would also save a lot of admin time of admin people at uni processing offers on predicted grades

So when would dc start university if grades are known? What do they do in the interim? No jobs for many now? How does this help poorer students - bank of mum and dad needed for this system. Or they could go into the military as some countries do.

The Big Issue and others are obsessed with benefits. The bigger problem is grads not getting grad work. They get a salary but of course don’t get benefits. Factor those people in and many degrees are not worth it. The realisation that fewer grads are unemployed than non grades must have been no shock to anyone. However there’s a huge difference in money spent on the grads who haven’t got grad jobs. There is over supply in some sectors and a judicious cull is a good idea.

I totally agree with the think tank position that too many technical courses are seen as second class. I would love to see more universities like Imperial College. Maybe less exalted but doing all levels of science snd technology and dropping English and Media studies. I would greatly prefer centres of scientific excellence which are readily available and which offer all forms of post 18 education so offer appropriate routes and stepping stones for different careers.

They could start in January? That's what the Greeks used to do. DH did a nice line for a while poaching them for Msc Engineering courses that ran for 12 months Jan-Dec.

It would save the bonkers rush for accommodation in August too.

And who pays for dc from June to January? Ok for better off people but an expense for others. Also some courses like MFLs and maths need continuation.

In terms of moving to a full post qualification process UCAS published a report on this -Reimagining Admissions - a few years ago.

Seasonal jobs are easier to come by in the summer, at home or abroad. Child benefit could continue. It's only an extra 3 months.

@disappearingfish You are sadly out of touch. Have you not read that vast numbers of teens are getting no jobs! No seasonal jobs in great numbers. They are fast disappearing. It’s a huge problem already and adding 4 plus months into an already long summer is expensive.

I said easier, not easy. I work in HE and have a teenager so I am very much “in touch” thanks. I think a solution could be found, the system is not working at the moment.

I think anecdotes are not the uk picture though. We all know hospitality is struggling and employers are cutting back. Around here it’s who you know for summer jobs and there’s very very few available. There’s a big problem with this and many on mn have noticed it.

I don't think the decision to go to university should be rushed into, by anybody.

@NeedlenardlenooWell maybe but there’s a cost to delaying these days and subject fluency can diminish. Also, to be honest, the vast majority are perfectly ok. Yes, it can feel like a rush but loads are ready to go and make a success of it. Maths is not one where gaps are recommended either. It’s better to do the research before the UCAS application.

Well yes (I am a sixth form tutor; I advise on about 50 applications each year). But however much research you do, forecasted grades are basically guesswork and decisions have to be made extremely quickly come August.

My poor colleague was on the hook for thousands of pounds in student rent for his son last autumn after a last minute course change. Fortunately he managed to re-let.

When you consider the amount of regulation placed on banks by the government to assess affordability and fully disclose terms of loans in a clear fair and not misleading way under Consumer Duty. Financial promotion regulation as well in marketing

It is bloody barmy that the same government gets away with dodgy misleading practices when marketing these loans to a vulnerable group of people- 17 year old minors.

Absolutely, the only explanation as to why this has never been deemed mis selling is the government itself would be on the hook and any redress would cripple the country.

Nail on the head. It's mis-selling at the very least. A financial advisor/insurance broker would be hauled over the coals for shoddiness, lack of due diligence, lack of warnings, etc., if they sold a regulated financial product in the same way that the universities are "selling" student loans to naive 17 year olds!

Look at all those who claimed to have been mis-sold endowment mortgages in the 80s and 90s! Most of them got compensation despite them knowing full well that investments had risks, but because the salesmen didn't sit them down and tell them like 5 year olds that investments could go down as well as up (and evidence that warning), it was open season for compensation!

Luckily for the government, student loans aren't covered by the Financial services regulatory/compensation schemes - no doubt they deliberately excluded student loans from the regulations to avoid future claims of mis-selling etc.

It's set to be the next BIG governmental U turn. The question is when, not if, the rules will be changed as the whole thing is grossly unfair to the younger generations. It IS starting to impact on future Uni numbers and more and more potential students realise that it's a giant con job.

It could well fall into the category of mis-selling, the question is who is the “agent” on the hook for claims.

The other issue is the the govt has shifted the goalposts since the original T&Cs. That could also be the basis for a claim.

Also, individuals have no say in how their loan payments are managed. It is just done automatically.

Say if you have two different plan 1 loans for example, pre 2006 (age-65 rule) and post 2006 (25 year write off) they are lumped together and treated like one big debt. You can't decide to pay one off sooner than the other. Are they disregarding the better terms then? Can you ask for them to be decoupled and treated as separate loans with their own statutory contracts?

They also make mistakes and charge more, but don't let you know. You have to seek out this information and ask for a review.

I'd urge people with loans to ask them for a thorough breakdown of their payments and how they've been managed.

They have mis-sold, lied, changed the terms retrospectively, moved the goal posts. Don't assume anything is being managed in your best interests.

I'm sure there are many more examples people can think of.

@Sammy900 Why would it be your best interests? It’s the country’s best interests! You know - tax payers! Future borrowing which is already sky high. Maybe people should just get on with working and getting promotion. The rest of the uk who are non grads have to! The loans enabled you to access the education and for most, earn more. Yes there’s a price but you have the benefit of 3 fun years and a degree. I don’t agree with constant changes but our dc will be paying a massive price and government borrowing is already 25% of all tax. So I’m sorry, but students paying next to nothing isn’t on.

oh yeah, silly me for wanting fair and reasonable terms and for loan contracts signed to be honoured.

Again, employed graduates are taxpayers. It's not taxpayers vs graduates - they are the same person.

Again, it's a loan - it's not free money for a fun time.

No one is saying that they shouldn't pay that back.

You seem to really dislike students and fail to recognise that a lot of people nation wide have been ripped off.

Exactly OP. 3 fun years is a ridiculous characterisation of degree studies, I'm a univerity lecturer. Hard graft, often longer than 3 years, e.g. engineering, veterinary and human medicine, uncertainty re jobs, poverty. Concentrate on tbe iniquitous misssllelling aspect and huge interest rates.
A reminder here of the petion on the mn petition site. I don't like the wording but it's the signatures that matter.