Plan 2 Student Loans- much higher interest, Times article - parents pay off

[fluffythecat1]

Our son is potentially heading to university in a few years. I follow Martin Lewis for his excellent financial guidance and have been concerned about his advice on student loans. Before, it was advisable to get a loan and in likelihood not pay off the full amount under the old system, now it seems the interest on them has changed as discussed in this Times article from yesterday, meaning that even with a good job, there is a significant long-term burden for graduates.
What are people’s thought? Gap year to earn some money before going? Put any money in a child trust fund towards it? Reducing the amount of loan taken looks key.

I had £21k student debt — why did my twin owe £40,000 more?

https://www.thetimes.com/article/8598d6cf-cb9e-4e78-9a51-7b1023ce53a6?shareToken=e66982418968f371f402de3a5c210f99

@OhDear111
What did I write that is total nonsense ?

Yes, I went to university in the mid 80's

BUT
If you actually think that the people taking
Ancient History or Classics or Art History or Medieval English Literature
at Oxford and Cambridge and St Andrews and Durham
are in any way going to get jobs linked to what they studied
you are kidding yourself.

and as @boys3 rightly says
if tax rates went back up to what they were under Thatcher
University funding would work more as it does across the EU

@Talkinpeace Where did I say that?!! I’m keen on employability. Of course I don’t see all degrees as vocational! Dd did MFL and converted to law. I’m well aware that dc do what they are best at but I’m still advising dc to do a degree that has a strong possibility of leading to a job because it has transferable skills.

We have narrow degrees, poorly constructed degrees and degrees that barely equip the grads to work. They have poor outcomes. If you are borrowing money, doing due diligence on what might lead to a job makes sense. The days of every grad getting a job are gone. My dsis didn’t even get one in the 80s due to refusing to move from uni city and she was happy on benefits. Who actually thinks that’s a good use of state funds?

Narrow degrees that barely equip the grads to work.

You are so right
https://www.ox.ac.uk/admissions/undergraduate/courses/course-listing/classical-archaeology-and-ancient-history
so utterly right
https://www.st-andrews.ac.uk/subjects/classical-studies/

@boys3 when I graduated loads of people were in negative equity as interest rates were 15%

Again, my DD is a doctor who borrowed about £80,000. She will repay over £250,000 during the 30 years std has the loan. After 2.5 years and nearly £7,000 of payments the loan has increased, £26,000. Every year the loan will increase until
she earns over £68,000.
She's lucky she has a job. Many of her friends are not currently working as doctors as there are no jobs - still paying student loan working 9-5 in Tesco.

Good point @mumsneedwine . My youngest dd isn’t a natural scientist / mathematician and came home full of despair yesterday as her school had shown her class a graduate earnings chart that basically said you’d be in penury forever if you didn’t become a doctor or dentist. I pointed out to her that the horrendous debt from their extended degree would wipe out a big chunk of said doctor or dentist’s earnings for the best part of forever!

One of my children is tangentially using their degree subject.
The other is not but has a cunning plan.

Degrees are about learning how to learn.
And its sad that British governments have chosen to widen but then devalue university

The issue around Medic degree spaces and jobs and placements is insane.
I do not understand who benefits from the artificial shortages

and I remember my mortgage on my first house hitting 15%
that was before the first big tranche of negative equity

A colleague has done a BA, MA and a PhD in Ancient History and works in a zero hours casual role. It’s in her field, however she is saddled with debts of at least £80,000. She’s jokey about if, but she can only work in her chosen field because her partner’s income is subsiding hers. I know of other people who have followed a similar path and not got an academic job, which really makes the whole expense of it pretty fruitless.

@OhDear111 - but MFL then law conversion course is a very middle class route. For the majority these days, MFL degrees generally give a very poor return on the fees paid compared to other degree subjects, despite the lack of people applying to do them, so it’s not as if there is an oversupply of MFL graduates. Given that your dd did MFL, I would be interested to know whether you think MFL degrees fit your view of degrees that generally have poor payback? “We have narrow degrees, poorly constructed degrees and degrees that barely equip the grads to work. They have poor outcomes.” Did your dd choose such a degree? Or are you arguing that most MFL degrees are rubbish, but not the one your dd took? Or that you can’t polish a turd, and many of the university students doing MFL are “turds”? Or that employers are idiots who don’t understand how to make use of valuable skills?

@Walkaround No they don’t according to the IFS. Better for men though! Significantly better than English.

What the best degrees do is equip dc for work but dc have to be motivated to walk through the door and plan a career. I’m not apologizing for DD being good at MFLs either. They are taught in all schools but lots of dc cannot be arsed. She could. Converting to law is a risk but scholarships are available. You are making a lot of assumptions about MFL degrees. Plenty of bright dc do them and the year abroad enhances their CVs.

You have made the assumption that MFL grads are turds. Not me. I do believe it’s an academic degree that can be used to successfully navigate entry into a good job. It’s like history or classics. Not all dc can do stem degrees so working out what degrees can lead to what you want matters. A good academic degree from a very good university gives options - but many don’t want additional work or want a good career enough. My DD really wanted her career. She’s met many like her but also many who are not that bothered about what follows their degree. However we didn’t pay her fees and she wanted to prove she was good enough for her job. And MFLs didn’t stop that.

@OhDear111 - I think you’ll find you are the one making assumptions. I asked you questions based around what you have previously said, I didn’t tell you what I personally think about MFL, only that, statistically, it doesn’t stack up as a degree someone would pursue if wanting to be sure there is “payback,” despite you being the one emphasising the importance of that to the taxpayer. It seems to me, you are quite happy to denigrate degrees you plainly know nothing much about (eg “theatre,” as you call it), and to make general claims about them, but don’t like the same said about your dd’s degree, about which you “make no apologies.” Meanwhile, your dd has had some lovely experiences, studying a subject she enjoys, spending a year abroad - almost like a great finishing school for the affluent middle classes who don’t really have to worry so much about what they study, because they expect to be believed when they say to people like them that their degree “taught them how to think,” unlike the “theatre” graduate, who, apparently didn’t learn how to think much at all.

@Walkaround You are rude and ignorant! You think the mandatory year abroad is a finishing school? Bonkers!

@OhDear111 - no, I think a MFL degree is brilliant. You, however, are rude and ignorant, and denigrate degrees you can’t even name properly.

@Walkaround?

Totally agree with you!

My kids won't be taking loans.

I would not encourage or support them to attend university at all unless targeting a higher paid job where they would expect to pay it all in full, so have saved to pay for it since they were born. I appreciate how lucky i am to be able to afford this. If i couldn't I'd be encouraging alternative routes such as degree apprenticeships or training for a trade. I'd also encourage them to take a year betweem school and university to work and earn money to contribute to the living costs. When you are paying you think more carefully about whether its really worth it.

@Peridoteage my DD is a doctor. She's worked since she was 13 and saved money for Uni. But her loan was £14,000 a year so doesn't even touch the sides. Interest has increased her loan by almost £20,000, despite 2.6 years of repayments every month.
Maybe only rich people should get to do degrees. Welcome to the 1950s.

Just a heads up. If your child intends to study maths they will find that a gap year is not encouraged by some universities. I can’t comment on other subjects.