Student Loan Terms

[DeoGratias]

I saw this letter in The Times and thought it deserved wider publicity (and it made me glad my children will not have student loans).
Does anyone know what the changes are?

"State loan sharks

The chancellor is to make existing student borrowers pay more by changing the terms of loans they have already taken

Sir, The government ignored warnings that university tuition fee repayments would be much lower than claimed. In his autumn statement the chancellor confirmed proposals to make existing borrowers pay more by changing the terms of loans that they have already taken. It is not worthy of any government, having actively persuaded students to take loans, retrospectively to change the advertised terms to compensate for its mistakes, in the process damaging trust between governments and young citizens.

Why should anybody trust future agreements if governments may break them at will? University leaders have stayed silent; worse, their representative body has actually supported the proposal. A recent memorial seminar for Professor Sir David Watson — the greatest university leader of his generation — reminded us by his example of the importance of ethical leadership. Is that something we can no longer expect from our vice-chancellors or governments?

Bahram Bekhradnia (President, Higher Education Policy Institute)

Sir Peter Scott (UCL Institute of Education and former Vice Chancellor Kingston University)

Professor Brenda Gourley (former Vice Chancellor Open University)

Professor Caroline Gipps (former Vice Chancellor University of Wolverhampton)

Professor Ingrid Lunt (former Vice-Principal, Green Templeton College, Oxford)

Professor Rob Cuthbert (former Deputy Vice-Chancellor, University of the West of England)

Professor Claire Callender (UCL Institute of Education)

Dr Paul Temple (UCL Institute of Education)

Professor Gareth Parry (University of Sheffield) Professor Ronald Barnett (UCL Institute of Education)

Professor Paul Ashwin (Lancaster University) Professor Mary Henkel Professor Vaneeta D’Andrea (University of the Arts London)

Professor Maria Slowey (Dublin City University)

Dr William Locke (UCL Institute of Education)

Dr Lesley Gourlay (UCL Institute of Education)

Mary Claire Halvorson (Goldsmiths University of London)

Harinder Lawley (Diversity Works)

[talkinnpeace]

generally the interest rate can change
but from my reading of other sources it stated that he threshold would rise in line with inflation - leaving the government to pick which inflation figure

now admittedly inflation is zero this year
but using that as an excuse to freeze the next 5 years is a bit rich

[Decide4Yourself]

I thought there was something dodger in the original loan agreements saying that the terms and conditions may change.

[talkinnpeace]

Retrospective changes to loan terms are illegal for all other forms of loans

I suspect that once the detailed Treasury papers come out on 6th December there will be
(a) very careful backtracking to stay inside the law
(b) legal challenges to a precedent that could impact on many, many agreements

[Kez100]

That might be because the sales pitch has been what it has been. If the sales pitch changes so that students can't trust the agreement to not change retrospectively then it could well do. Perhaps not those who will attend very high achieving unis but the lower ranking ones. Especially if more apprenticeships are created.

[titchy]

When fees trebled overnight in 2012 to £9000 a year the number of applicants was higher than in 2010 (2011 was a bumper year, but artificially so, the pattern was still an increasing one.) there is no evidence at all that freezing the threshold will affect applicant behaviour.

[DeoGratias]

I certainly don't like the principle of changing rules. I don't trust the state and I've lost all faith in pensions as they keep changing the rules too. When I took out my pension the state said I could take it at 50 and then changed that to 55 and it's going up even older. They in effect breach their contract or compact and lose the trust of people when they do that.

[Secretus]

Martin Lewis is taking this personally Hmm. Me too.

titchy I believe it does put students off. Maybe not the DC of Mumsnet but certainly some of DS2's cohort who don't have a family history of HE are very much put off by the entire cost of going to university.
In my case I suspect both DC will fall neatly in the middle ground of those who will earn enough to repay but not such stellar salaries that will make it easy.

[raspberryrippleicecream]

As I understand it, they are proposing to go back on original deal to raise the salary point at which you start repaying the loan by inflation each year. So in effect you pay back more each year.

Martin Lewis is taking this personally, and there's lots of info on MSE.

[titchy]

The salary threshold at which loans become repayable is being frozen for five years, backdated to 2012, rather than increasing with average salaries.

It will not put potential students off, I can guarantee.

[Kez100]

Martin Lewis also said some time ago he would make representations if terms were changed. I think he said that was because it was always clear they could change their word was they wouldn't in retrospect as students were otherwise nervous of agreeing anything and would be put off going so there needed to be some sort of fairness to the potential for change.

On a personal note, if they do, watch university application places fall like a log.