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?

We need people to study medicine, engineering, computer science, maths, chemistry, pharmacology, nursing, teaching etc.

University is an expensive route, we don't need as many people studying lower value courses at weaker institutions. My neighbours daughter got mediocre A-level grades (teacher assesed during covid) snd scraped into a low ranked University in clearing. She has struggled to get a graduate job because in reality she was never that academic - she didn't get the grades required to stay on in school at sixth form & did a-levels at college. I feel gutted for her that she was sold a dream to an extent, and is now stuck with a vast debt she can't pay.

They are starting to introduce teaching degree apprenticeships and I suspect this will become the main route to QTS. No tuition fees.

I was at uni in 2000 for three years and worked a short time so I have never paid it back. That was 20 years ago. I am sure it will get written off eventually.

Yes, we recently had a trainee from the Buckingham one and it seemed good.

It should be possible to train for shortage public sector occupations without (excessive) debt. Otherwise it's just one part of the state creating problems for the other.

Fully agree with you @Sammy900

When they first came out in the early 90s they weren’t too bad - but also we didn’t have to pay tuition then, it was just for living expenses. Also we didn’t borrow as much as most people lived in shitty house shares that were cheap.

i paid my loan off within a few years of graduating, even though my first graduate job only paid £11k per year.

Now though the amount people have to borrow combined with interest is ridiculous. Mind you I also find the trend of students living in really expensive purpose built accommodation ridiculous.

The active petitions going around re scraping interest rates and reducing the term to 25 years, people might not agree with per se. If there are anymore that are more relevant, reasonable please share and I'll sign.

Maybe I should start a new one while feeling passionate about this issue. Never done that before. 📢

I think generally the best outcome would be that it's all debated in parliament and the treasury review should hopefully lead to this anyway so ?

Completely agree. There's a petition on the mn petitions site, worth signing and sharing

Ooh thanks I'll have a look

Going to university is expected by so many people (actually MN is a prime example) that this is what happens. A lot of people rack up debt (which in itself is fine as after a certain level, people should be responsible) but dont stop to think whether going to uni is a good idea.

The interest rates are usurious

Im
45 and am
paying 186 a month back. As a single parent it’s killing me. 3 years left until it’s clear!

@Sammy900 So how do you think our vast number of universities should get money? If grads won’t pay (and it’s obviously a tax based on salary!) then who does? Do we want 37% of young people to go? Should we cull universities and places? Jobs ask for degrees because they can. It’s often not a need. For decades there was no need but we increased university provision and invented the need. Now we cannot afford it and grads don’t want to pay but they do earn more! It’s a good thing to evaluate if a degree is necessary but jobs are so difficult for every young person now we need a reset on employing young people, not the bank balances of better off grads!

@disappearingfish Thank you for putting people right.
I still think Martin Lewis is right to tell us to think of it as a 30-year graduate tax rather than a debt because that is just how it operates. But psychologically seeing that repayments are not making any inroads, and in fact that the outstanding sum is growing, causes a lot of anxiety and the freezing of the thresholds means that the marginal tax burden is growing.
I don't expect my DD to pay her Plan 2 loan off before the 30 years is up, DS maybe will, but it's very hard to gauge. Only half of students currently pay their loan off.
The students who have been really stiffed are those from poorer households who had to take out larger maintenance loans. How progressive is that!
We thought we understood the terms but didn't appreciate that the Govt can change those retrospectively. The fixed threshold will be the killer.
As PPs have said, the interest is extortionate but as it doesn't impact the rate of paying back or the term I think it's immaterial, no?

I agree. I’m on plan 1, I will be paying £200pcm + for my entire working life which is a significant burden. Far more than I borrowed. It’s also unfair that women’s interest debt increases whilst they are on maternity leave.

Grads do pay but the student loan system, the interest accrued and terms are unfair (see all the above raised points).

I'm sure most graduates (like me) are quite willing to pay back a loan they have received in order to study, just like anyone else should pay a loan back they've received, student or commercial. Whether or not the terms and interest are fair is exactly what is in question.

I'm afraid I don't have all the answers as to how to resolve this. It's just been brought to my attention that the loans specifically seem very unfair.

I agree that the whole access to higher education and subsequent careers, how universities are funded, etc all needs a massive overhaul as it's currently not working as it is.

Why push young students in schools to achieve grades and have "career options" as if it's something realistic to aim for, encourage them to go to Uni without making them aware of the financial consequences and the reality of the debt they will be left with? Why say there is "fair access" to education for lower income households and individuals when this is simply untrue? Why is it necessary to have a degree and get in huge amounts of debt to then go and work in essential public roles and have a life long financial forfeit for this?

I feel that more apprenticeships and opportunities to learn while you work would be a good step forward for essential public service roles. More government money funding these and other vocational degrees for a work force trainee pay-off.

Then better financial education in schools and realistic opportunities made clear so that prospective students could weigh up the cost and benefit of paying for their chosen degrees and what this means / future mapping.

How this would impact on universities, I don't know? It might lead to less non-vocational degrees saving other studies for people who can afford to pay for it. Again, not sure how fair that would be either as there would present another dilemma, what about your incredible young artists that can't afford a degree? etc

Do you have any ideas?

Also meant to say that I don't particularly like the wording in the petition, which is on the mn petitions site, but at least he had the ooomphh to set it up

I forgot to add that it would also be a good idea for employers who make a degree an essential requirement for the post should also offer trainee "earn while you learn" options and look at how they can subsidise that rather than placing the whole burden on the individual to have already achieved this beforehand.

As the Met Police do.

@Sammy900Oh yes! Apprenticeships! Have you heard of them?

There’s an apprenticeship levy paid by companies who train young people and employ them.

DH was an employer before retirement. There’s high NI and lots of costs associated with employing people. In his business, a degree was required but young people earned well. They were trained to become chartered engineers at no cost to them but MEng is a requirement . It’s long been the case that professions need degree level people - a bit like doctors need degrees. There are many jobs asking for degrees where no post grad qualifications are offered or needed. This is where there should be flexibility on qualifications but don’t expect employers to cough up for sociology or history degrees as well as post degree training.

Totally appreciate your point - I think it’s a can’t rather than won’t though. I think because so many people are able to opt out of state education, the incentive to improve it just isn’t there. Financially, looking at where money goes in terms of contracts feels like it could be a good place to start. I’m more familiar with the NHS but I assume education system is similar - lots of money to pay some Tory mate baroness for non existent PPE, but not enough to pay nurses an appropriate (in my mind) salary. I really feel for parents of children with SEN, it’s such a struggle.

Never said I expect employers to pay for the degrees you mentioned, only whatever they deem necessary for the post, they can make the rules up can't they then if they are paying for it.

Obviously apprenticeships aren't a new concept, there aren't enough of them though.

The onus is still largely on the individual to pay for a degree deemed necessary for a future profession they aren't yet sure if they are going to end up working in.

Just throwing my thoughts out there anyway seen as you asked, like I said I haven't got all the answers. My suggestions aren't mind blowing original revolutionary ideas. 😂

My main issue currently is that the student loan repayment terms are unfair and we have been shafted for years.

I do think young people were massively missold. It was so heavily downplayed as just a small tax that 17 and 18 year olds who absolutely didn't know better went into it without any understanding of it. It should have been a lot more transparent

Op I agree .I'm so glad it's all coming out now !

If only they had adults in their lives who could have looked into it