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Education

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University Fees

431 replies

Xenia · 26/09/2010 12:14

I see that Lord Browne in his report may apparently suggest (Sunday Times today):

  • rights for universities to charge fees of up to £10k a year rather than the £3200 or whatever it now is perhaps from 2012
  • removal of cheap loans for children of the middle classes (presumably even if their parents are not prepared to help them)
  • interest rate susidies on loans going up 2%
  • students who go into high paid careers will have to pay back more than they borrowed perhaps capped at 20%
  • and one which pleases me - parents will be able to avoid the graduate tax for their children if they pay the fees in advance. None of my older 3 children took out student loans as I paid as I wanted them to be in the same position when I graduated in the days when there were no fees paid by students.

However the report is not yet finished and he may recommend abolishing the cap on tuition fees and let the free market rule which may be wise.

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SanctiMoanyArse · 29/09/2010 17:45

LOL at aprents paying for weddings too- I asked my Mum for a loan for a wedding veil and was told to forget it, she didn;t but unnecessaries LOL (and I didn;t get a veil; neitehr did I give a hoot)

I don;t ahve a problem with paying back fees tbh, and as someone who does have that to battle as a recentish grad it's not a huge concern but I think the limit is too low, I think the limit should be to start repayments at average wage because there's a clear sell then- if you take a degree and raise your chances of earning above the average wages 9and clearly I relaise most don;t actually earn average wage: that's the point really) then you repay that. Seems fair enough.

JenaiMarrHePlaysGuitar · 29/09/2010 17:46

I would rebrand it.

It is not debt.

It is deferred payment Grin

SanctiMoanyArse · 29/09/2010 17:54

Someone I knew is hea d of mature student relations at an RG Uni and she rebrands it too- as a 'tax on the priveledges we have received that others cannot'.

Worked for me.

Litchick · 29/09/2010 18:10

Bloody hell Riven - your lad's being a bit prescriptive isn't he?

Most times it's worth being flexible in the short term to get what we want in the end.

sarah293 · 29/09/2010 18:14

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SkippyjonJones · 29/09/2010 18:32

Riven I have a very bright 15 year old dd who feels the same way.

mamatomany · 29/09/2010 20:14

he has a thing about debt. Maybe he will change his mind. Who knows.
But what sensible person isn't afrid of that level of debt? They are finishing university with more debt that me and dh took on for our first mortgage!

Not all debt is bad, debt to buy a deprecating car for example is bad unless you need that car to drive to work then it's not a bad debt it's a means to an ends.
If he was talking about running up a £15k credit card bill buying CD's i'd understand but it's your job as a parent to explain the difference between that and an education.
He won't pay a penny back until he earns £15k remember.

jjkm · 29/09/2010 22:02

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jjkm · 29/09/2010 22:45

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Xenia · 29/09/2010 23:02

They will m anage. If the fees go up to £7k from £3200 that's an extra £3800 which is about 633 hours at the minimum wage which is 12 hours a week of work if work is available.

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mamatomany · 29/09/2010 23:44

I may have mentioned earlier an Uncle and Aunt of mine pretty much sacrificed everything financially for her children to go through private schooling and university. They now earn enough to comfortably support their own families and their parents in their old age. I believe this works well in other cultures (my relations are Indian) and maybe we will have to adopt this sense of loyalty to the older generation in return for support, interdependency within families should be a good thing.

foreverastudent · 30/09/2010 00:08

But wage inflation has and will(?) increase faster than the inflation rates student loans are pegged to so the debt as a proportion of income may actually be quite low.

I wouldnt object to the increses if the threshold for repayment was increased from £15k to the £26k that I think it is for 'old' loans.

tokyonambu · 30/09/2010 07:46

"But wage inflation has and will(?) increase faster than the inflation rates student loans are pegged to"

Hmm. Assumptions based on ever-expanding economies aren't good ones. There's no particular reason to believe that wages will increase faster than food and energy costs (the former being closely coupled to the latter) in a time of relative energy scarcity, and plenty of reasons to believe they won't. Under those circumstances, debts coupled to RPI would rise more quickly than wages. Conversely, in a time of a shortage of skilled labour - with falling birthrates all over Europe amongst people who go to university, the absolute number of EU citizens with degrees is not rising as fast as the percentage of those people who have degrees - the wage premium for having a degree may strengthen. It's all very hard to tell.

Bluntly, however, for a large portion of today's students, their debts will be extinguished by the death of their home owning grandparents over the next twenty years. The percentage of people aged 18 today whose grandparents own houses is fantastically higher than a generation ago, and the equity in those houses is immense.

sarah293 · 30/09/2010 08:36

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MissAnneElk · 30/09/2010 08:58

Tabbymoomoo, you do know you have to be a Welsh or Scottish resident to qualify for no fees don't you? You can't just 'encourage' your DCs to pick a welsh or Scottish university.

tokyonambu · 30/09/2010 09:21

"The house equity all those boomers have acrued will go on their care home fees, not their grandchildren."

I don't believe that's true in general, although obviously there will be cases where it is.

The average house is now worth about £160K, but there's a strong chance that older people are slewed towards the upper end of values. They will all have 100% equity. Of the pre-war and boomer generation, a lot of the home owners will have significant pensions, because they are the golden generation of defined-benefits pensions, even in manual and semi-skilled jobs. There is huge social services effort to keep people in their own homes, and people only spend quite short periods of their lives in care homes, and often it's only the surviving member of a couple who goes into care after their partner has died. Again, generalisations.

If you're a couple sat on ~£200K of asset, with a pension income of ~£15K (state pension plus small occupational pension), even at £25K/year/person four-person years of care home still leaves a substantial asset behind. And a lot of people who worked in the public sector or the large industrial sector - the two key employers of the era - will have better pensions that that: 50% and 66% pensions are not uncommon. And that's assuming the only way to fund care is to sell the house and put the money under the bed to pay the bills in cash: even in the current climate, the discount rate is not zero. And it's also assuming that the only asset is the house, which is not necessarily true.

Yes, obviously you can't say "all old people's finances look like this", and there's huge disparity. But one of the things that has driven the buy to let madness has been boomers inheriting from their parents.

It's also assuming that grand parents don't decide to fund their grandchildren's education on the assumption that means tested benefits penalise holding assets. There's some evidence that's happening, I believe.

sarah293 · 30/09/2010 09:21

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tokyonambu · 30/09/2010 09:26

"How can Wales and Scotland affrd free higher education?"

They can't. It's paid for from central funding. A bribe to keep voting Labour, because without Scottish and Welsh seats, the Tories have a majority in England that would survive the end of the world.

sarah293 · 30/09/2010 09:28

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Xenia · 30/09/2010 10:30

We work terribly h ard in England and particularly London to ensure the Scots and Welsh get free education for their chidlren which is denied to us as well as free prescription charges. It's totally unfair but like most things the British public does nothing about it.

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JustGettingByMum · 30/09/2010 10:37

Xenia - what do you suggest? As far as I know, we have no "rights" to vote on welsh or Scottish parliaments, although of course, their MPS vote in our parliament Hmm

MissAnneElk · 30/09/2010 10:57

Xenia, please do explain how people in London work any harder than people in the rest of the country.

JenaiMarrHePlaysGuitar · 30/09/2010 11:15

I imagine she's referring to this kind of thing.

I've not looked into how the figure were produced, but average wages are higher in the SE so it stands to reason that they pay more tax. It doesn't mean they work any harder though.

MissAnneElk · 30/09/2010 11:19

Yes, Jenai people in London are as a whole paid more - they don't work any harder though.

mamatomany · 30/09/2010 11:53

Nobody said they did worker but they do work hard and without them maybe the scots and welsh couldn't afford to be as generous.