Is it a good idea to pay university tuition fees off upfront?

[SunnyDays01]

Apologies if this has already been done to death but if anybody has any advice regarding tuition fees in particular I'd be grateful. Just about to embark on the student loan route and it occurred to me that there has been a lot in the press regarding the pros and cons of paying university fees upfront. Anyone have any advice/answers? Thank you.

[TheWordFactory]

Also, whilst you can get a loan for any tuition fees at an EU institution, you cannot get a maintainance loan.

[TalkinPeace]

Well I just heard Chuckup Umunna on the radio. The man is a twonk of the first order. He really does not understand what he's doing.
Even more reason to keep all funds that you can under your control for as long as possible.

[ragged]

Martin Lewis was on the same programme saying how terrible Labour Proposal is ; he said everything I thought to be true. I want to hear Ed Balls' explaining how the current situation costs more money, though, that's supposed to be on the media today somewhere (or did I miss it?)

Anyway, I think I'm strongly in favour of system as stands. Waiting to be persuaded.

[TalkinPeace]

ragged
The current system is unsustainable because such a high proportion of loans are going unpaid.
BUT
Cutting the tuition fees without ensuring the universities still have funding is a stupid approach.

I genuinely think that the fees need to be paid across to the Universities in stages - with part held back until the student starts paying the government back. Start with 90% now, 10% later, building up to 75% now.

That would ensure that Universities reduced back to around 20% of kids and that other than degrees would be the default for many employment areas.

We are still unraveling the insanity of Bliar and Broon wanting 50% of kids to go to Uni ....

[AllMimsyWereTheBorogoves]

All the political parties have done an abysmal job explaining the current system. As Martin Lewis said, people get hung up about the amount they're borrowing but they should be looking at what they're going to be paying back. Thinking about it that way really does make it far more akin to a graduate tax.

[GentlyBenevolent]

The Labour proposals are eminently sensible in terms of the national finances. They don't make much difference to most students other than that though. But what they are trying to do (probably too little too late) is avoid the same sort of black hole situation as the pensions mess has caused.

[GentlyBenevolent]

Mimsy - the problem Labour are trying to address is that too much isn't being paid back. But the relevant calculations etc assume the loans will be paid back and that's what the problem is. Under Labour's proposals, the government will be getting more money up front, and less from anticipated repayments (which may never materialise). The black hole will be smaller. You can't just carry bad and doubtful debts forward and hope that magically they will be paid off - it's become very clear that a big chunk of them won't be.

[GentlyBenevolent]

Talkin - they ARE ensuring universities will still have the same funding (so Steve Smith can continue to get millions)

[Theas18]

The general advice is don't pay upfront. Take all loans, regard them as a " tax on higher earning graduates" . They kick in only when you earn enough and only for 30yrs. I don't expect dd1 to pay hers off as she plans to be an academic.

Better for most kids if they have the money to use it as a house deposit rather than paying off the loan.

[GentlyBenevolent]

Talkin - we do agree about the insanity of sending 50% to university (as opposed to other useful and relevant training - which is in fact what really happens, just it gets called a degree).

[homebythesea]

Gently I'm not sure the Labour proposals do stack up- we have prioritised building up pension pots mostly due to the tax effectiveness of doing this. If those tax incentives are removed to fund far too many students going to Uni for less, the chances are that more pensioners will have to rely on the state more than they would have done had their pension not been touched. Not once have I heard anyone mention why it is we think it is appropriate or sustainable for 50% of 18 year olds to go into Higher education when graduate unemployment levels are something like 10-15%

[homebythesea]

Gently x-post on the 50%!!

[TalkinPeace]

Gently
Chuckups spouting of Millibrains great idea which I gather is not supported by Ballsup is that the loans will be less but magically the pension changes will produce the missing money.
Yeah right.
Sorry but NuLabour never got their pension calculations during 13 years in government, I don't for a second believe that they will now.

The Universities will get more money from Central Government, but where it will really come from sounds like la la land.

FWIW Gideon Wallpaper thinks that the posters on this thread are representative of the finances of the nation

[GentlyBenevolent]

home - that's a different question (the 50% one) and one I might agree with. As far as the pension thing goes - the vast majority of people won't be affected. Ordinary people - and less ordinary (highly paid) people would have to increase their pension contributions quite substantially to be affected (I'd have to pay a LOT more in to reach the new, lower, cap). Restricted tax relief to 20% for people earning over £150k seems eminently sensible.

[GentlyBenevolent]

Talkin - the money is coming from Lala land right now, because too much of it will never be paid back. It's financially illiterate (not to mention misleading) to carry debts you know will never be paid forward for any amount of time let alone indefinitely.

[SecretSquirrels]

Anyone seen this article? Probably as unworkable as the current system but an interesting angle. I suspect the 50% would soon fall if universities had a vested interest in the earning capacity of their graduates.

[TalkinPeace]

It's financially illiterate (not to mention misleading) to carry debts you know will never be paid forward for any amount of time let alone indefinitely.

Have you looked at the US Government's accounts?

Secret
That article
Yup
Its what I've posted a couple of times already on this thread - 14:19 today and 11;56 on Wednesday

[SecretSquirrels]

Sorry TIP Missed that.

[GentlyBenevolent]

Talkin - as it happens yes I have. In some depth. In a professional capacity. They are irrelevant to this debate though.

[TalkinPeace]

Secret
Not a prob - delighted to see that other people are saying the same thing, as I got panned for it on Weds !!

Gently
Yes and no.
Why should graduates care about their unpayable debt when politicians clearly do not mind shunting debt forward into the never never?

[GentlyBenevolent]

I don't think graduates should, necessarily (although clearly some do, and individuals will have different attitudes towards debt, some of them cultural). But I'm not actually that fussed about what graduates think about their fees and their loans. But from a government finance perspective we have one gaping black hole with the pensions which is not being addressed at all, and now another one with the student loans. Apparently all the political parties have deemed the pension one to be firmly on the too hard pile, the loans one maybe not. The fact that some students who haven't really thought it through think this might be better for them when really it probably won't be that much better is irrelevant - not having a loan system which is imploding quite so much is a good idea. Loans didn't work. Not as things were. One definition of madness is continuing to do the exact same thing and hoping for a different result - Labour are trying to do a different thing and get a different result. Might work, might not.

[TalkinPeace]

Here is the source document for the article in the Torygraph and for the ones I read in the Economist
www.iea.org.uk/publications/research/universities-challenged-funding-higher-education-through-a-free-market-%E2%80%98gradua

[titchy]

It's a GREAT idea talkin if you're starting from the premise that the sole purpose of a university education is to enhance your salary.

It's a GREAT idea if you're a university that specialises in Law, medicine, business and management, vet science etc. After all there'd be no incentive to run other courses would there as the graduates wouldn't have anywhere near as good an earnings capacity - so waste of time teaching them.

It's a GREAT idea if you're happy to live in a county with no artists, linguists, historians, musicians. Or hell, no teachers either - who needs 'em!

[GentlyBenevolent]

Well, to be fair - that is her position, she's made that clear a number of times.

[TalkinPeace]

titchy
A good degree need not be a vocational degree. My degree is unrelated to accountancy.
The point is that a good degree should give the life skills and analytical skills - be they in arts or STEM - to allow one to give back to society what it cost to provide that opportunity.

DH is a qualified teacher. He got his degree and then ten years later his PGCE.

I do not regard it as unfair for Universities to consider WHY they are providing degrees.
Maybe there should be some sort of dispensation for those who go on to do PhDs ?

But there are lots of courses at lesser universities that should not be degrees

• it is crazy that people can rack up £40k of debt doing a degree in Event Management that has a 240 UCAS point tariff.