So it would seem that the new tuition fees aren't as fair as we have been led to believe:

[oldbatteryhen]

From Q+A on BBC website re. funding:

'Can students pay back their loans early?

The rules have not yet been set on this. Mr Willetts has said it is "important" that higher earners are "not able unfairly to buy themselves out" of the system by paying their loans back early.

He has said the government would consult on penalties for early repayments, saying that there might be a 5% levy on repayments over a certain amount each year - or on early repayments made by graduates with incomes above a certain threshold, such as £60,000.

Wealthy students will, however, be able to pay their own university fees up front, avoiding accruing any debt at all.*'

Have we been misled?

Blimey, that emboldening went a bit wrong!!!

fgs - makes it really attractive to get an education then. so, either pay it back for bloody years or get penalised for getting a decent job.

But it's the bit about the wealthy students (that I so messed up!)
'Wealthy students will however, be able to pay their own university fees up front, avoiding accruing any debt at all.'

Isn't that grossly unfair?

THis is why the whole thing has massively pissed me off! Loads of my friends will have saved enough to pay the fees up front for their kids and yet my children and children like mine will be saddled with debt and at a disadvantage from the word go. If they are successful and earn a decent wage they will be penalised again.

Surely a graduate tax is fairer as everybody will be in the same boat?

or possibly reserve uni education for specific things like nursing/ health/ law etc and realise that funding everyone to go is impossle and will lead to decisions like this. i imagine it is legally impossible to force someone into debt rather than allowing them to pay upfront.

Well did you expect it to be any different? They are not going to force people to take loans if they don't need them. There will be lots more room for the children of wealthier parents at good universities now. Deeply unfair.

Um, we live in a capitalist system? Deal with it? The rich always have advantages, why is education a special case where they shouldn't?

No, I always expected that that would be the case!

That means that a rich graduate may come out of uni earning £25000, with subsequent salary increments throughout his career, not having to pay anything back.

My dc may come out of uni earning £25000, having to pay a small part of his loan back. With each increment in salary, the amount he pays back will increase, and will also incur interest. So my dc, will pay back a significant amount by about 2042.

The rich graduate's one-off payment of £27000 in 2012 certainly looks like a good deal!

The rich might get a leg up on the property ladder outright without having to bother with that complicated and expensive mortgage business, too. Isn't that just as unfair ?

It is unfair. But you can't force people to take out a loan. A graduate tax would have avoided this, but then people would study abroad which isn't really in the interests of the country.

And as others have said, wealthy families give their children money to buy houses too. Or just houses, in some cases.

If you end up in a low paying job for life, or don't work or work part-time for whatever reason for a substantial part of your career then you would be better off taking the loan than paying up front, so it won't work out to be an advantage to everyone - in many cases those taking out the loans will be better off than those paying up-front (especially if they invested their lump sum and used the proceeds to repay their debt as it accrued - then it would most likely cost in for those on medium incomes post uni as well as those on low ones). About a third of graduates will never pay off their loans, so to have the money in the bag must be a good thing for the government in many cases. Also, if the government is going to struggle to fund all these loans and maybe restrict numbers doing degrees because of this, then it stands to reason that having some people not taking them will allow more other people to go.

It might not be completely fair, but there are some up-sides and people with that much money will always have advantages the rest of us don't, so I for one can't worry about it too much.

What about accelerated repayments? I paid my student loan back within 2 years of graduating. Better than having it hanging around and taking bitesized chunks out of a salary your whole life.

To me, the new system will benefit those whose parents are able to pay the fees for them , ie they have no debt

And it will benefit those who either go into modest paid jobs, or who do not work, for whatever reason, as they will either make no repayments, or small repayments, and in time it will be written off, ie they too make no/small repayment on their debt.

As usual, it will be the group in the middle, who take out the loan, use their degree to help them into a "well-paid" job, and are then penalised if they try to live very modestly to repay the loan more quickly. Or they accept the Government diktat that they should repay upto double the amount they originally borrowed.

The system stinks for those who try to do the right thing

Do you have to pay the full amount for the whole 3 years up front though? Or could you just pay one year's fees?

Looks like Mr Willetts hasn't decided that yet!

I am not highly paid and I am putting £50 a month aside to help my children with uni. I have been doing this since they were born. Why can't I give my children advantages by saving?

Not being able to pay them early seems v odd and I agree isn't in the spirit of the process at all. It seems to be symetrical - if you don't earn enough you don't have to pay, but if you earn lots (or a frugal) you can opt to pay back faster. It is how student loads worked when I had one.

fivecandles I imagine you'll be able to pay year after year. That's the way it's worked to now - otherwise what happens if you have to repeat a year or drop out?

There was a news story last week that suggested that students who take out the maximum loan could end up paying back in the region of £83,000. This was justified by some government official as being 'worth ot' because graduates earn around £100,000 more than non-graduates over their working life. Now, I don't have any sort of degree, let alone a maths one, but even I can work out that the net benefit to the average graduate is only going to be around £17,000 over their working life. ie: around £370 a year assuming they work around 46 years. By the time they have paid their tax, national insurance they migh get around 3250 a year. Hardly seems worth it to me.