Student loans - anyone changed their view recently?

[jeanne16]

Following the recent furore over student loans, has anyone changed their view about whether to try to fund their DCs university via a route other than a student loan?

To be fair if they'd started in 2011/12 they'd be in their 6th year - that's a lot of maintenance loan.!

Except it was a grant prior to 2016 start! Exchanged for an interest bearing loan!

It was only a grant for those on the very lowest income. Most parents will be supporting financially - always have.

It's not great I realise, but when systems change there always has to be a cut off point.

I realise that. I have a personal issue that makes me jump on my soap box!
My child would have been entitled if it had stayed a grant, if my personal life hadn't changed I would have been able to contribute so it makes me particularly vexed!

"Although if you move abroad they have no way of enforcing repayments. "

I thought technically they did - in fact that is the reason they are structured as debt rather than a graduate tax, so that you can't escape paying by going abroad. Although I have no idea whether or how much SLC does pursue people who have gone abroad. I think every now and again an MP or Select Committee may ask a question about this, but I can't remember the answer!

EEA students are entitled to the loans i think, so there is quite a substantial number of people repaying from abroad.

I think someone mentioned that the RPI + 3% rate can't change - I thought (though may be wrong!) that it could if the government legislated. This year's booklet says

"The regulations may change from time to
time and this means the terms of your loan may
also change. "

As pp have said, whether it is worth borrowing, or repaying early, depends on each individual's future earnings - not easy to predict! But the fact that there may be changes to the terms and conditions over the next 30 yrs makes it even harder. At the moment the political climate is not favourable towards making the terms more onerous, but that may well change at some point during the next couple of decades.

Indeed - when Corbyn might have won the election and would not have charged my twins fees in September I was ready not to fund the twins' fees this September after all. As he didn't get in I am going to pay them. I very much doubt if he gets in in 5 years' time or sooner he will write off loans already taken out but like investing in a property a student loan and issues around it has risks and you need to make informed choices (those lucky enough to have any choice about funding or working full time to help fund a child)

awishes
Not sure if it's changed, but when DC first went to university, student loans assessed that they were entitled to a grant as well as their loan. However, the loan was reduced by half the value of the grant so in fact, there was still a shortfall between what DC was assessed as needing and what was actually awarded. Despite the fact that our income was low enough that DC was technically entitled to a substantial grant, we still ended up having to help out. Of course, it was better than nothing, but not quite as helpful at the time as if the whole grant had been paid to DC.

lucy although labour have now said that there was never an intention to get rid of tuition fees.
Just a pledge to investigate the possibility.

It was very unfair of the Tories to imply Corbyn ever suggested writing off older fees. He never said that. He just said those starting this September would not pay or get a refund (and would look at past debt). I am not a Corbyn supporter but the press unfair reported him on that. Had he won the twins may well not be paying fees this coming year so that was why the issue was relevant to us. I can see no way if the twins start this September they will not have a liability for student loans so am happy to take the risk the loan might be wiped out or they will never earn much, and will fund them fully. They are very lucky I am prepared to do that.

Agree with lucys last post

That's interesting, thanks for letting me know. I hate the fact that we seem to be heading back to the days when only the rich and privileged studied medicine and law.

Written off after a few decades
Repayments as a % of earnings
If you earn under the threshold no repayments are made
Does not affect mortgage

= NOT A LOAN

How many more threads about this? It is a graduate tax, the govt simply didn't want to call it that because it was so unpopular. It was all over the media when the discussion about introducing university fees was going on.

It's a thread about an evolving system.

Anyone who has the option to pay as they go along should look into it and make their own judgement imo.

What worries me is that the goalposts may change as we go along (like state pensions), 'loopholes' may be closed as a pp said has happened in Australia. The interest will go up, the cost per year will go up, the 30 year limit may be scrapped, the £21,000 cut-off will no doubt stay the same.

The laon system makes it easier to become a lawyer not harder. In my day if your parents did not make up a full grant you couldn';t go to university. Nowadays even if your rich parents are utterly mean you get a loan and you can usually through a summer job cover the difference between the full loan and rent without parental help if you rent carefully and work hard. Secondly with law there are paid internships in university holidays payuing £400 a week from which most people are recruited. If you are recruited then the law firm pays your year (or 2 years) of law school and maintenance. The very brightest therefore cna do law much more easily than say getting into fashion or journalism which tends to have unpaid internships and relies more on contacts.

Have funded ds through his BA, and now one more year to go for his MA. I would not touch a loan with the Ts and Cs of the student loan with a barge pole.

It is lucky if you can afford to pay rather than having the loans. I have said on a previous thread , a visiting US student who spoke to DS thought the UK system was fabulous.

Ds is fortunate that he has and will be funded in full. It was worth it for the BA - he got a First.

I think it's too easy for the Ts&Cs to be changed, and as I've pointed out before, it's an efficient and legal way of reducing the IHT bill as money used to fund your child through education doesn't count as a gift and is IHT exempt.

Have funded ds through his BA, and now one more year to go for his MA. I would not touch a loan with the Ts and Cs of the student loan with a barge pole

Scaryteacher - so what would you have done if you couldn't afford to pay upfront? Would you (or rather your DS) have considered a student loan then? Or would he not have gone to uni because you wouldn't touch a loan 'with a barge pole'?

Many people don't have an alternative (my family included) so it's irritating to read sweeping statements like yours. By all means berate the system, but your comment above implies that the rest of us are mad to consider loans. What else can we do?

We can't pay dds. I've looked at every which way and there is simply no realistic option for us.

Stonecircle We would have extended the mortgage....it would have been far cheaper than the rates on the student loan. I had an old style minimum maintenance loan for my PGCE in 2000/01...it took bloody years to pay off, the threshold changed, and it took a year for HMRC and the SLC to sort out repayments, despite weekly phone calls from me. I was 35 at the time and had worked in Local Government before retraining, so was used to the sloped shoulder admin dance, but even I could feel my patience slipping.

When the loan was paid, I had to point out I was moving abroad to get any action on a refund. The loan was taken into account for a re-mortgage as well, so all in all, having worked out that nothing would have improved over the intervening years, we paid for ds.

I also have issues with the student being the borrower, but the loan being contingent on parental income. The same amount should be loaned to everyone.

My God daughter decided when she was at sixth form that she didn't want to study anything enough at uni to make it worth her while taking the loans. She did some other training, and has been very gainfully employed for a long time now, and gets paid to travel to wonderful places. She can afford to buy Louboutins on the Champs Elysee!! University is not the be all and end all for all kids. My db didn't go back in the 80s, yet has managed an MSc whilst working full time, and has a good career.

Scaryteacher. I absolutely agree that university is not the be all and end all. One of my dcs decided not to go and I don't think he would have gained anything from university. My other two dcs will overlap. But like your DS presumably, some people do benefit from university.

We have paid off our mortgage, DH has retired and I won't be working long enough to pay for a remortgage.

It's very easy when you have options (especially those that put you in a position where you see paying tuition fees as a means of helping to reduce IHT ..) to be scathing of those of us who see no alternatives.

I'm sure it's not what you mean, but some of your comments seem to suggest that people whose offspring take out student loans are stupid and need to think long and hard about whether they should be at university in the first place....

Yes, I often don't want to come on these threads as it must be prety annoying to hear women ilke I am saying we will ensure the children have no loans when most people aren't in that position (on the other hand I've never had maternity leaves, I've worked full time for over 30 years without a single break, I have no pension (just gave it to older children for housing) and will work until I die. We all make choices (those lucky enough to have any choices at all) and most students manage fine with the loans.

In my view it is easier now to get to university with the loans than it was in the past at various stages. My father could not study medicine in the 40s as his father who had funded an older son doing that was now nearly 70 (he had to wait to have my father until he was 49 due to money issues) and so my father did a BSc. Then grants came out afetr world war 2 and he then embarked on his medical degree after his BSc. My mother taught full time for 11 years and they put off babies for all that time to ensure they could both have enough to eat and to buy a house.

Then in my day only 15% of people got to university and it was pretty unfair 85% who never got to go paid via taxes for us 15% to go (although only about half the cost was paid for many of us and I was lucky my parents made the minimum grant up to the full grant as they had no legal obligation to do so whereas today you get your loan as of right whether your parents want you to go to university or not).

People could certainly quote my older graduate son back at me - he was a postman for 3.5 years although even there he earned over the ceiling to pay back the loan. He is awaiting Ocado confirmation of whether his new job will be driving their vans.... as we always joke his most useful qualification has been his driving licence so far. Bit of a waste my funding his degree although he does say he is very glad he did it so may be ultimately it may be worth it.

I think the loans aren't a terrible option for the individual. A keen and able student shouldn't let it put them off.

Compared with the US tuition fees at the prestigious universities seem good value for money. What is less good for UK students are the same fees charged for less well respected courses/ universities; for comparison US community college is cheaper.