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Higher education

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

Student loan - do you worry about debt?

106 replies

Paraela · 18/10/2024 15:38

Do you worry about how much debt are your children accumulating with the student loan?

OP posts:
TizerorFizz · 23/10/2024 19:32

@Words I said Government Borrowing. That’s NOT debt. See attached from ONS.

@HasaDiga You must pay your mortgage come rain or shine. You also must pay it back. Neither is true of the student loan. I entirely agree students should be careful about what they do but the student loan is not a mortgage. I’m afraid M Lewis is better informed. The notion so many have that loans must be paid off is entirely false. An amount in tax must be paid from salary. That’s not the same thing.

Student loan - do you worry about debt?
HasaDiga · 23/10/2024 19:40

TizerorFizz · 23/10/2024 19:32

@Words I said Government Borrowing. That’s NOT debt. See attached from ONS.

@HasaDiga You must pay your mortgage come rain or shine. You also must pay it back. Neither is true of the student loan. I entirely agree students should be careful about what they do but the student loan is not a mortgage. I’m afraid M Lewis is better informed. The notion so many have that loans must be paid off is entirely false. An amount in tax must be paid from salary. That’s not the same thing.

That's rather patronising as a post. However Martin Lewis himself has said that his advice is changing due to the changes to the loans and whether or not you think he is better informed (I'm sure he is since he's built a career around it as opposed to mine in law), the fact is that it is harmful to view it as anything other than debt since it has a high interest rate and you have to pay it back unless you are in very low paid employment. If we don't view it as a debt we perpetuate the problem with children going university with low grades to do degrees which are not going to improve their employment prospects. Calling it a tax is absolutely false and misleading.

Words · 23/10/2024 19:42

Apologies @TizerorFizz . You are quite right.

AutumnLeaves5 · 23/10/2024 19:46

If you’ve got the money, I’d prioritise using it to support your children getting on the property ladder post Uni rather than paying off the student loan.

Words · 23/10/2024 21:19

Just want to clarify something.

Of course, re student debt, middle class savvy parents will do the sums and financially plan accordingly.

My concern is and I clearly should have made it more obvious, is the wider economic damage .

In simplistic terms: the money funding these hundreds of billions of loans has come from somewhere and will need to be repaid somehow and at some time.

Most of it will not be paid by the debtors as (the majority?) will never have the capacity to repay, or even to begin to repay.

Because it should never have been suggested to them that university should be their goal in the first place. Equal to the Iraq war, I think this was Blair's worst mistake.

It is true that this is not their personal problem, but it will be ours, collectively as a society.

This is surely a massive boulder, gathering speed and weight, as it careers down the mountain in ten, 15, 20 years' time.

That is aside from the separate issue of the whole strategy being wrong headed in the first place.

We all have different skills and strengths. I can barely change a light bulb ( not proud) and am terrified when batteries give out on my older devices as I can't ever recall the way they are supposed to go and it never works - but I also have a responsible professional job.

I rely on a small band of highly skilled people to fix my roof, my gutters, my boiler, my kitchen tap, my plastering, my computer, my rotten decking.... and so on.

We need more people like that.

Xenia · 23/10/2024 21:26

Indeed. It is why the top 10% - over £70k a year income currently have the highest tax burden for 70 years.

Paraela,. the tax set off against university costs paid by a parent was only available in about 1980 when I went for a few years by way of a "covenant" to pay your adult child some money for a few years. I think it is a pity that right of a parent was abolished. There is so little these days particularly higher earners can do - many of whom do not even get a personal tax allowance these days never mind child benefit nor the 30 free hours of childcare. The state hates those of us who pay it loads of tax and by the end of the month the hatred will be even clearer.

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