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Higher education

Talk to other parents whose children are preparing for university on our Higher Education forum.

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Original poster

Government to lower threshold for repaying student loan

303 replies

whatareyalaffinat · 27/09/2021 08:07

Article in the Financial Times late last night, reporting that the government is considering a number of measures relating to student loans. They want to lower the point at which a graduate starts repaying their loan to £20k down from £27k.

This is to push more people into ‘useful’ and vocational subjects. They want to decrease the amount of debt that is never repaid.

This is not a graduate tax, this is another slap in the face for our young who have given up so much these past few years. This also hits those most who don’t come from families with wealth. This is in essence a tax on being poor.

What other loan contracts can be changed by the lender at a second’s notice?

The government can borrow money at 0.5% but student loans are 6%+ and set to rise.

A complete farce.

OP posts:

spotcheck · 27/09/2021 08:09

To be fair, 27 grand is a very generous threshold.
I wonder if they will also change the percentage paid.

ofwarren · 27/09/2021 08:11

I agree with lowering the threshold 🤷

toomuchlaundry · 27/09/2021 08:12

Why is it a tax on the poor? Most families don’t pay the fees upfront and take up the loans.

Mollymarvelous · 27/09/2021 08:13

Well we can’t say we didn’t see it coming. Whack up the price of education but say ‘look it it’s ok you won’t pay it back’ ..

Higher education will become unachievable for many . Undoing all the work labour did to improve social mobility. University goes back to being for the rich. Working class kids need vocations because we sent away our EU workers that keep things afloat.

HungryHippo11 · 27/09/2021 08:13

@ofwarren

I agree with lowering the threshold 🤷

Me too. Nobody ever pays back their student loan otherwise. And if the interest is high then starting to pay it back at a lower wage means payments starting sooner and less interest

VanCleefArpels · 27/09/2021 08:15

Ridiculous to say it’s a tax on the poor. By definition it’s a tax on those that earn above the threshold which at the moment is above the average wage.

Mollymarvelous · 27/09/2021 08:16

Interested to know if MN pro lowering the threshold have student loans or went to university/ kids have gone . Just interested to understand this perspective.

VanCleefArpels · 27/09/2021 08:17

@Mollymarvelous why will HE be “unachievable” ?

RoseAndRose · 27/09/2021 08:17

Yes, changing the threshold and altering the interest rate were always aspects of the loan that could be changed.

It's a bit of a bugger if you've done your calculations based on one set of assumptions (ie that the costs of repayment terms will remain similar)

cptartapp · 27/09/2021 08:18

I agree with it too.
And I say that as someone whose DC has just gone off to uni.

VanCleefArpels · 27/09/2021 08:18

And yes 2 kids one graduated one in final year at Uni

Newgirls · 27/09/2021 08:18

Of course they are. Martin Lewis needs to change his rhetoric.

The student loans are high % and need paying back. This was a Tory policy by stealth from years ago.

HungryHippo11 · 27/09/2021 08:20

@Mollymarvelous

Interested to know if MN pro lowering the threshold have student loans or went to university/ kids have gone . Just interested to understand this perspective.

Yes I went and I have a higher rate loan, so this would have affected me.

Mollymarvelous · 27/09/2021 08:20

Already lots of kids from low income families struggle to go to university with the cost of living if not topped up by parents. Would this not disincentivise them to not go even more?

SellFridges · 27/09/2021 08:20

It used to be £21k. And actually I think when the loans first came in it was £17k. The repayment cost won’t change (in fact the amount of interest paid should be lower if people start paying it back sooner), so I can’t get worked up about it.

HungryHippo11 · 27/09/2021 08:21

Higher education will become unachievable for many
Why? You only pay it back when earning over 20k and then it's a percentage of your earnings over that. If you're earning over 20k then you're not "poor"

Honeyroar · 27/09/2021 08:21

I agree with it too. I thought they should’ve done it 20 years ago. I paid mine off long before I earned the salary requiring me to pay it off.

Plantstrees · 27/09/2021 08:25

@VanCleefArpels

Ridiculous to say it’s a tax on the poor. By definition it’s a tax on those that earn above the threshold which at the moment is above the average wage.

This. The whole point of student loans is to help people get into higher paying careers. £20,000 is a good salary for a graduate starting out so why shouldn't they be paying back when they reach that threshold.

Unfortunately every career now seems to need a degree and I think that is where the system falls down. There should be more on-the-job training available to avoid the need for everyone to do a degree.

ofwarren · 27/09/2021 08:27

@Mollymarvelous

Interested to know if MN pro lowering the threshold have student loans or went to university/ kids have gone . Just interested to understand this perspective.

I have a student loan, as does my husband and my eldest is due to start in September.

TokyoTammy · 27/09/2021 08:29

A family member of ours repeatedly said she would avoid being paid over 27k so she never had to pay it back. At least this would encourage people away from that outlook.

Also this is tax payers' money, why shouldn't it be paid back if its been borrowed?

There are plenty of other routes to a degree that do not involve going to uni full time. It might encourage our younger generations to avoid high levels of borrowing and look at working and doing a degree part time, like a lot of other cultures do very successfully.

puseyst · 27/09/2021 08:30

On what planet is £20k considered a good salary? Have you seen the price of houses and the cost of living these days?

I agree it is a tax on the poor. Students with rich parents won't have taken out a loan, and so for part of their income, this is an extra 9% tax for those without wealthy parents.

HappyTimeTunnelDinosaur · 27/09/2021 08:31

I don't agree with this at all, the interest rate is already ridiculous. It should definitely not apply to those who already have a loan, or will it just be new loans? It's not reasonable to change the terms as they go along, they need to at least be upfront about it.

Newgirls · 27/09/2021 08:32

How many of those on here saying it’s ok will just quietly pay for their kids uni anyway? Do you know any people who lower earners?

gogohm · 27/09/2021 08:34

My kids will have over £110k of debt between them. They signed a contract for that debt on certain terms, if the deal is to be varied it should only be on new loans

Elephantsparade · 27/09/2021 08:34

The main issue I have with this is at 20k that scoops up a lot of jobs that when i first started work, were A level entry but now require a degree because employers can ask for one rather than the job needs one so if forces people to take on debt. Full time work at minimum wage for a 23 year old is 18.5k so not far of this threshold.

But i do see the current issue with student loans is that a lot arent paid off and the way it works is we've sort of pushed the debt to a future set of tax payers to pay off when they reach the point at which the debt is written off. Are we at 30 years of the loan system yet?

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