Government to lower threshold for repaying student loan

[whatareyalaffinat]

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.

@TizerorFizz

The cost of the best universities in the USA exceed $20,000 per semester. There are 8 of them. Degrees from the best universities here are a bargain.

When degrees were fully paid for by taxation, far fewer people went. We don’t like that model either.

My DD has a mortgage and her grad tax was NOT taken into account. She got 4 times her gross earnings.

Of course it was taken into account. They'll give a salary multiplier then stress test her outgoings (which they are mandated to do by the regulations since the credit crunch, so there is no way they didn't do this)- student loans are counted in the outgoings calculation. She might have got 4.5 X salary if she didn't have a student loan.

@TokyoTammy

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.

This supports reducing the threshold - people seem to think everything should be "free money"

This thinking suggests uni was a waste of time for your friend - why would you PLAN to never earn more than that amount when most work for 45/55 years. Why did she bother going?

@Mollymarvelous

I think this is a divide between people who fundamentally believe education should be heavily subsidised/free / available to everyone for the good of society/ economy ( which in reality we know to be ‘unaffordable’ versus those that see higher education as an option for those that ‘deserve it’ that should be paid for by the individual and a private service which is what the loan system is now moving us towards

I agree it should be free but not higher education past 18 years which is specialised & not needed for many jobs.