The graduates who will never pay off their student loan

[Tonty]

The graduates who will never pay off a student loan

The White Paper released on 20th October introduced some major shifts.
I think the introduction of V'Levels is a positive move, offering vocational qualifications alongside A'levels giving young people a chance to diversify their skillset beyond purely academic routes.

My question, particularly to those working in higher education is this: How will universities realistically enforce clearer minimum entry standards, given that 'minimums' often flex when seats need filling?

I also disagree with the assumption that low A'level attainment inevitably leads to a lifetime of low paying jobs. Personally, I had a rough time with A'levels but eventually found my way into IB. I know others who started with poor results, went to university, and now earn very well, though not immediately after graduating. Yes, it’s anecdotal, but it’s not rare.
As for the proposed reforms targeting higher earners: Accelerated repayment, no cap on total repayment, and a shorter repayment window, I find them excessive.
They risk discouraging people from pursuing high paying careers, or even university at all. Does anyone know if these changes will be applied retrospectively?

It's not that rare, I am one of them. But that was some time ago, and today the whole market is totalling different ... but it isn't the A levels per se, not the results that are the issue but the whole structure of the market is way more challenging.

DD is straight As, great course at a top 10 university and I really worry that finding a decent role will be extremely difficult.

Agree that the bigger problem is the jobs Market. I have an acquaintance in her mid twenties, has a degree and a master's. 85k of student debt. Working in a call centre for a financial service company, applying for other roles left right and centre but not getting anything. Nearly 200 applications for the last role she was really interested in. How will she ever pay off those loans?

The White Paper also promises stronger employer involvement through partnerships between universities and colleges to help shape curricula and placements. It mentions Local skills Improvement plans to guide course funding based on regional economic needs, and priority funding for emerging sectors like AI and sustainable technologies.

But honestly, the first two proposals don’t feel like they address the real employment gap. They sound like recycled ideas, universities already boast about employer partnerships and placement schemes. These aren’t new, and placements remain extremely competitive. So unless something shifts structurally, it’s hard to see how these plans will make a meaningful difference for most graduates.

As for the loans, it seems like a trap either way. Low earners carry the debt for decades and high earners face aggressive repayment terms.

Hmmm - when the data quoted is inaccurate and comes from an organisation that purports to be a lobby group, yet has no internet presence whatsoever, I can’t say anything that comes from it is convincing….

There’s already a thread about the HE white paper in the HE topic if you’re interested.

What's the name of the thread? I've had a look but can't find anything about the White Paper. Thanks.

@Tonty The link in your op goes to a Telegraph article, not to the White Paper. First hand sources are always best in my view, so I searched for the White Paper online and, after wading through press releases, found it here: https://www.gov.uk/government/publications/post-16-education-and-skills-white-paper

My HE employer is already embracing some of the principles in this in their 5 year strategy.

She probably won't pay off her loans. The amount you pay back depends on your salary not on the size of your loan. You make payments for a fixed number of years. DC1 owes something like £85k and has to pay for 30 years and has guesstimated they will pay back around half of that.

This is not right. The total amount you pay back depends on what you earn and how much you borrowed. The monthly repayments are linked to what you earn, but the number of years you are repaying is linked to how much you borrowed. If you have paid it all back after say 20 years, you stop making payments. At the end of the loan period (30 or 40 years) the remainder, if any, gets written off.

The current loans (Plan 5) don’t get written off for 40 years. That extra 10 years makes a significant difference in the proportion of students who will end up repaying their loans in full.

@fusspotz What began as a read through of the article quickly shifted, & found myself more engaged with the white paper’s proposals. My original intent was to discuss the Telegraph article. I've got a few tabs open and switching between them, it got a bit muddled.

What aspect of the reforms is your employer embracing in it's strategy? and what's your view on it?

@dizzydizzydizzy Surely it's reasonable to expect people to increase their income over time, rather than remain stagnant just to avoid repaying loans?
If striving for more leads to financial penalties, then perhaps we’ve reached a point where ambition itself is discouraged, which echoes my earlier concern.

@Tonty "What aspect of the reforms is your employer embracing in it's strategy? and what's your view on it?"

Well the strategy isn't published externally yet, but SLT are very excited by it and committing funds and effort towards it. It relates to the learning for life aspect of the white paper - the ability to combine multiple courses, potentially from multiple institutions, and over multiple years, into a single qualification.

And a lobby group that has a very clear agenda according to the article.

Fewer people going to university and told to be bricklayers instead.

I do wish the people who staff these "think tanks" would take their own advice and go off and do some more useful job instead...like bricklaying. But those jobs are for other people.

p.s. @Tonty this is the part I mean:

"^We will expect providers to offer more flexible, modular provision and strengthen
progression routes from further education into higher education, supported by
transferable credits.
We will consult on making student support for level 6 degrees conditional on the inclusion of break points in degree programmes. This marks a significant shift towards a more inclusive and adaptable model of learning, empowering individuals to tailor their educational journey. The introduction of break points will ensure
that learners are acquiring vital, usable skills in every year of higher education. It will give
them the option to break down their learning, achieving a qualification at level 4 after the
first year and level 5 after their second year of studies, while also ensuring institutions are incentivised to support those who wish to continue their studies. This will enable young
people to ‘stay local and go further’ by connecting local provision at level 4 and 5 with internationally recognised degree level providers, unlocking opportunity and ambition across every region.

We will make it easier for providers and awarding organisations to offer standalone
high-quality, occupationally focused higher technical (level 4 and 5) courses.
We will work with the Office for Students to develop new Higher Technical Qualification awarding powers for providers, as part of the Office for Students’ wider review of degree awarding powers. In addition, we are reforming the process for designating Higher Technical Qualifications. We will make the design more flexible so they can meet a wider range of employer and local needs, and we will develop a process for licensing awarding bodies, including providers with awarding powers, to brand their level 4 and 5 qualifications as Higher Technical Qualifications. Taken together, this will empower providers and awarding organisations to create bespoke higher technical offers in response to skills needs in their areas."^

@HPFA I wonder how many female bricklayers we actually have? Very few so what will women do? I suspect not bricklaying.

@Tonty Plenty of people have static earnings. Those on benefits and those who work part time often aren’t getting promotion and possibly don’t want it. Higher personal taxation will probably stunt ambition too.

40 years paying the loan brings in lower paid people and they will pay more as the interest grows. 20% are still expected not to pay it off but 50% don’t pay it off now. So the tax payer (government borrowing) might see an improvement on the £250 billion students owe.

My DDs are both on the scheme that wipes the loan after 30 years. DD2 has been working for 14 months, so has been paying back since April. Whilst it's a graduate STEM job, it's not a massive salary at the moment, although has the potential to rise. I doubt she'll pay it all back.

DD1 graduated with a PhD a couple of weeks ago. She is working, earning more than her sister, but owes a lot more due to the interest accruing over more years. She intends to go abroad after this contract ends and was offered post-doctoral work in the USA but won't go until there is a change of government. If she goes there, she won't pay it back.

I'm not bothered by it and nor are they. If they pay it back, ok. If they don't, ok.

I thought the loan still had to be paid back even if the person moved abroad Malbecfan

Wouldn’t surprise me all with the amount of worthless tinpot degrees that are no use

and the people who go to uni because it’s ether expected or they fancy the idea of uni experience with no plan on how the subject they are studying is going to get them a career

I know an enormous amount of people who have degrees and are in run of the mill jobs like the rest of us

@Malbecfan @CousinBob loans do need to be paid back if you work abroad, but the salary threshold is different for each country: https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2024-25

@CousinBob @fusspotz oh dear. Well as one DD is now in academia, I doubt she'll earn enough to pay it off in full.

What is a ‘useless, tinpot degree’? Why do you think education is of ‘no use’.
What is a ‘run of the mill job’? And why is that seen as a bad thing?

I assume she meant "low value" or "rip off" degrees.

The previous Government defined a low value course as one where, 5 years after graduating, students still aren't earning enough to start paying back their loan.

The current Government prefers the term "rip-off degree", which is a course with high drop-out rates and/or poor employment outcomes.

These courses are a problem when they are funded by the tax payer, who needs good value for money.

Maybe the onus should be with the recruitment team at Uni to ensure more graduates get into roles? If they could find companies willing to give work experience while at the Uni one of the barriers to their cv would be lifted. I know far too many people who have degrees working in admin, which is now being taken over by AI. That is where the government needs to have a think tank; what will we do with all of the 20-40yo who are going to have a lifetime not being able to work because there is no longer any ladder or flexi-options for working when you have a child.

Speaking of work, "Carol" 's post yesterday got me thinking how nice it would be to be paid to be on Mumsnet every day, posting threads. Do you think the Russians ever actually start threads about things going on in their real life? Are they monitored very closely, or can they ask how to best get chip fat out of their uniform, for example? Maybe ask advice on situations in their "workplace" with an overbearing boss?

Every university in the UK ( if not worldwide) has a Careers and Employability Service which often incorporates Employer Engagement and placements.
Graduate Outcomes is already a key strategic KPI for these teams and universities as a whole.
Universities are already doing this but the biggest challenge is student engagement. The service is there but students need to be the ones engaging with it and making the most of the opportunities on offer. That's one of the biggest barriers.

I'm aware of all of this. I was being facetious as I often find people who refer to 'useless' degrees don't actually understand the graduate labour market. At least they didn't call it a Mickey Mouse degree I suppose...

It sounds that model needs a rethink then.
In my degree we were told at the start there would be placements, then in Y2 we were told it had been dropped because the year before us didn't bother turning up! By that point we were all stuck on the course and so lost a valuable part of why we had begun it. I suspect my Public Health degree would be what a pp called rip-off. Maybe it was because we were meant to have placements so I didn't pay attention to it, but I don't remember ever hearing about a careers service or department (2017). One girl who got on well with her tutor was given a job with a company the tutor knew but that was the only help given with actual employment. I was very jealous at the time as we were both single mothers and it is hard to find part time work that fits around the school run.

If the careers service contacted all leavers regularly to showcase relevant roles the university would presumably have a better polling when it comes to whether their degrees are rip-off as the previous poster said, so it would be in their interests.