Better ways of financing student loans

[Fishedupso]

I think 9K was way too much to raise it to.
In USA i think there are more scholarships to apply for
And accounts for parents to pay into

Could we have say an ISA for the child that is for their student loans (but isnt counted as capital for UC or if parent becomes unemployed. )
Or roll it into a new isa for houses like help to buy.
A lot of people wouldnt want to save for kids in the kids Isa for student loans because the child can just spend it.
Obviously parents can save in own isa but as above UC limits and unemployment possibilities.
Saving in the childs own accounts also means if they instead of uni look for a job and it takes a while they cant claim unemployment- which can come with training and credit to pension etc etc.

As it is many parents are having to pay for kids living costs up to 5k a year… but in not very long those with these large loans and deductions will still have the deduction plus paying 5k a year for the childs living costs

Also so even my generation who didnt have tuition fees and got loans for just living costs may be finding 15k per child which is almost as much as the CB over that time.

Personally i would also change it so it comes out after pension deductions.
Or at least allow a certain amount that is excluded from taxes.

Also all degrees costing the same is understandable but also crazy if we assume about 60k cost at least

Those suggestions would cost money though.

@Fishedupso if it doesn’t count as capital for UC, aren’t you just saving your money for your child’s education and then taking from the tax-payer to live. So effectively the tax-payer is paying for your child’s education.

I do think an account saving for your child’s university is a great idea, and in fact, that’s exactly what I’m using the kids ‘stocks and shares’ isas for. I’ve contributed every month since birth, however, I know that if I were to lose my job or just require a UC top-off, my contributions would have to stop as I couldn’t simply afford it.

So, I think it’s unlikely a person on UC could afford to save anyway. It’s a moot point!

There are 2 options for providing funding to university when it comes down to it.

1. The student pays, either directly themselves or with family help.
2. The state pays and therefore the general population pays via taxation.

Or some sort of mixture of the above. The problem with option 1 of course is that it becomes a barrier to entry to the less wealthy, which is a huge problem in the states.

The most fair option is a straightfoward graduate tax coupled with a large enough grant to cover all fees and living expenses, essentially a form of NI that you only have to pay if you go to university. It takes away all the problems and angst that exist with loans but ensures that those who benefit from a degree contribute towards the cost of it.

Yes, I agree a flat graduate tax is the best approach. I'd suggest with a minimum earnings threshold as with NI/income tax.

I'd also decouple the maintenance payment from parental earnings. Students (well those over 18) are adults, and should be able to be financially separate from their parents.

Why is a graduate tax fair? It doesn’t feel it to me. It’s the same problem as the loans really - you pay out for the rest of your life at a level which means over time you pay back vastly more than you borrowed/ used.

Degrees should just cost less. It’s a travesty that people are paying 9k a year for a couple of hours of teaching time a week.

We need to change the mentality of what uni is to be more in line with the other countries where it’s free.

So you won’t be moving across the country to study fashion journalism. Everyone is entitled to a place at their local university but the yearly pass mark is higher (not 40%!) so if you don’t keep up you fail. No accommodation funding except for medicine STEM or students that don’t live a commutable distance from uni.

Thats sort of what it’s like in Italy and Portugal etc. It’s free but there’s no loans so what that means is if you get into the top uni which is in another city, unless your parents can afford the accommodation or you work then you can’t go.

We complain about loans but they do make all unis more accessible. If we want to make it free for everyone then the upshot of that is less voice of where you go.

What courses only have a couple of hours teaching a week?

I dont agree with graduate tax because so many i know could easily have walked into their jobs without their degree.
So why would i spend 3 years and pay extra tax forever for exactly that job.
Possibly i would agree if payment started then at £50k plus but dont trust gov to raise that.

UC limits is a problem not necessarily because people can manage to save for childs education from it but because having in your own account for child later would count and same if child cant get a job.
Better to encourage save towards it than borrow due to growing with interest rather than loan growing.

The only real benefit of uni for many students is the independence/confidence.
But i do agree some courses should be more universal at every uni so you can go locally. Where i live there is a high up uni (not oxbridge) and my kids could travel there daily so saving a fortune but even if applying -would they get in?!

The wealthy parents who pay up front and the high and middle graduate earners are funding the current system.

If a student savings account was held outside other savings limits more like a pension, it would be no different to people on UC increasing what they get by increasing pension contributions. But it may save the gov from having billions to write off from unpaid student loans in 30-40y time.

I think students and parents dont really appreciate that getting a graduate job (providing you have the 1st or 2:1 is also about performing on tests and interviews and certainly some asd kids and other shy kids may just not perform well on these sorts of assessments.

A lot of social sciences.