A Labour minister has just tried to explain on LBC why U.K. society requires young people who attend uni to pay a graduate tax

[EvangelicalAboutButteredToast]

And I’m confused. He was trying to say it was a student loan and then accepted it was a graduate tax and that society deemed that the right thing because they were more likely to out earn those who didn’t attend uni.

I thought that was what income tax was for alongside all the other taxes. Are uni courses subsidised by the government. Is it that?

They owe society for their eduction. Why should someone who left school to work in retail, subsidise the education of someone who qualifies as a lawyer?

The current student loans system means if you only ever earn below the average wage, you pay for very little of your qualification, but if you start as a higher rate taxpayer, you pay for most of your education. Study Social work and well pay for your education , study architecture and well pay for some of it, study law and well pay a little of it. Tell me why that isn’t fair?

They do not owe society for their education. They owe higher rate tax payers, of which they will hopefully be one day.
A retail worker on minimum wage is NOT subsidising higher education. To be paying for higher education you need to be a net contributor, that means paying in more tax than you take out of the system. A full time worker on minimum wage pays AT MOST £2563 per year in income tax (and its likely they wont pay this because they will have pension contributions etc). Do you honestly think that if you take into account the costs per person for funding NHS/ schools/ Army/ policing etc etc there is any left over for the minimum wage worker to be funding HE? On top of that most minimum wage workers will be receiving some kind of in work benefit to top up their wages - do they 'owe' society too??

Loans don’t repeatedly have their payment terms changed after the money is borrowed.

The terms of that loan say the rates can be amended

Looking forward to the cheers from the 40-50 crowd who have spent years paying off their own loans and are then also hit with a graduate tax..

Because someone working in retail may well one day find that they need a lawyer, e.g. if they get divorced. People who haven’t been to university benefit immensely from living in a society where there are nurses, research scientists, economists, artists, authors, engineers, doctors, accountants, pharmacists, lawyers, architects, microbiologists, software engineers, social workers, civil engineers, psychologists, teachers etc. It’s ridiculous to suggest otherwise.

You need to do a bit more research...

My DD did all that and earns around 40k as a 25yo in the NHS, she pays back significant amounts each month, owes far more now in loan that when she left Uni 4 years ago, the load attracts interests from the moment it is handed out.

You left with 16k, student now and for sometime have been leaving owing 40 to 50k....

The loan capital will never be paid off, its all interest.... its a fucking scam and would never be allowed in the financial sector, i wonder if there is someone somewhere who would fund a class action against the Govt over this?

Tuition fees should be a max of 3k pa and free for those in the NHS who do a certain number of years, say 10.

These “loans” are largely signed up to by children who are under 18 at the time of agreement and therefore cannot legally sign a contract. Many have not fully understood the implications of losing a significant proportion of their income often over their entire working lives which can be changed at any point or that they may pay back multiple times the amount borrowed. It is a legal requirement to fully inform a borrower about the borrowing at the point of contracting, which does not happen.

Far less significant issues have been deemed by courts to be mis-selling scandals and this fulfils all of the criteria for that with the added aggravating factors of the magnitude of money involved and that these “loan contracts” are largely being signed by minors. I think that a class action might have a high chance of success.

A minor can sign up to a contract its just voidable. It isn't void.

They also apply each year.

Tuition fees should be a max of 3k pa and free for those in the NHS who do a certain number of years, say 10.

Who would be paying for this?

The Tax payer, same has happens in almost all other European countries, with similar levels of Uni attendance....

A better question is why the Govt things its perfectly ok to lump so much debt and crippling interest, onto the shoulders of young people but the triple lock is a sacred cow and can never be touched?

If this subject is not addressed, we'll see our Uni 's collapse & that will wreck our economy.

@Alexandra2001 We cannot afford that! The loans are already heading towards £250 billion outstanding. If we do £3,000, when universities want over £12,000, who is paying the shortfall? It will be those in work via higher taxes. Or we reduce our 37% going to 12%. Would you prefer that? There must be a reasonable approach that those who benefit, pay. No idea why highly paid anyone should be a special case - NHS or not. I already pay their wages and pensions! Which are better than most.

Yes and Brexit didn’t help matters either, making it more difficult for overseas students from Europe to come and study.

In regards to the HE sector not providing employers with the right skills - this has been said for decades and frankly I think it’s partly rubbish.. employers should bear some of the responsibility of on the job training, they want everything already done and to cost them as little as possible.

They should if they want a Lawyer. Same goes if you want doctors, nurses and teachers. Education is a public good not a commodity.

The amount it costs to go to Uni, will put young people off, that means either fees go up... or more likely the Uni shuts down... how is that helping the UK? its one of the few areas we used to be world class in.

We already have massive skills shortages, do you want more and then more immigration? with corresponding higher unemployment? and an even lower skilled economy?

Its £250 billion over close to 30 years, its a totally unsustainable model... most of this debt will be written off, with students just paying interest... pre 2023, just 30% will pay of their loan, post 2023, 52%.....

If France can send 34% of its students to Uni for low tuition fee's, why can't the UK ?

My point on a higher earner is, if they cannot pay back the loan, then that does prove it needs change...

On NHS specifically, one day you'll need their care, either in NHS or in a Private Hospital... you wont be happy if no one is available.

Save the student says £40,000 salary is currently £86 a month on plan 2. You always have to think if the job was attainable without the degree.

Here’s their payment chart.

Some will be, those in the NHS wont be.

Healthcare has changed a great deal since the 1950s when my mum did her SRN training, then the emphasis was on patient care at the bedside... its very very different now, not least the accountability.

Unfortunately, the NHS doesn't have enough staff to train, on the job, students, even the hours required at Uni, can be difficult to manage... my DD loves having a student on placement but it also means she sees about 50% of the patients she would normally see..... if it were more frequent, it would become a full time teaching job.

Britain in its increasing insularity is now preparing the ground for whom to blame next for the state of the country: young graduates are that target. Now it turns out that young graduates (not old graduates, mind) are too privileged so why should they benefit from general taxation? Snowflakes, obviously,🙄 unlike the sturdy older generation who studied for free, had jobs for life and pensions and then screwed the young by voting for Brexit. We can see this demonisation in full swing everywhere, from Rachel Reeves to posters here. The way young people are being treated is unforgivable, absolutely outrageous and Labour won’t be forgiven by my children’s generation.

It isn’t a tax in the way tax usually operates. Normally those who have more generally pay more tax. With student loans, those who earn less and pay it back more slowly may well pay much more in interest by the time the loan is repayed.

Despite not paying income tax and the government paying my NI contributions when I was on maternity leave, a period of high interest rates meant my loan increased a lot over that time. It will take me so much longer to pay mine back than my husband and I will have paid more in interest too. I personally think the amount of interest should be capped, you don’t know at 17 when you apply for the loan how life will turn out, and it is graduates who work part time/with caring responsibilities (often women) who will often pay theirs back more slowly and more expensively.

This!! Why don’t we just stop paying for pensions for older graduates just an idea… bet that would not be popular unlike screwing over younger generations

I’m musing and this may not come out well, but there is a disconnect between universities as places for discovery, curiosity, research, development, the crucible for the next great idea or new understanding and them having become an extension to school, providing guided learning with the sole aim of getting ‘X” job.

The loan capital will never be paid off, its all interest.... its a fucking scam and would never be allowed in the financial sector

Yes, some students will pay back more in interest than they borrowed. That also happens with mortgages. It doesn't make it a scam and clearly is allowed in the financial sector.

Some students will pay back more than the borrowed, but some students who only get low paying jobs will never pay back as much as they borrowed. The system is deliberately designed like that.

It might be designed like this doesn’t make it fair or just. Why should some graduates pay significantly less just because they were lucky or had parents with the money to pay the fees upfront etc.

Correct. Assuming this is a voidable contract, it is binding unless the student repudiates it within a reasonable period of time after turning 18. Given that this would cut off their student finance, they aren't going to do that.

Also, @LivingInMinecraft is wrong to say that the loans are largely signed up to by children who are under 18. Even when they apply for a loan for their first year, the vast majority of applicants are already 18.