Is it worth switching from independent to state for A level if applying for a highly competitive subject?

[rougheredges]

DS is in yr 10 in an independent school. He’s really happy there- we’re pleased with the academics and he’s got a lovely group of friends. He’s currently predicted grade 8/9 in 9 of his GCSEs (and a 7 in DT which he’s doing because he loves if!) He’s managing this pretty effortlessly.

Currently he’s thinking he’d like to study Economics at one of the tougher universities to get an offer from. He knows he’ll need lots of extra/ super curriculars as well, but his friend’s dad told him today that he might find it harder applying from an independent school. Apparently there’s less wiggle room and the bar is higher.

I’ve looked online and there’s a lot of conflicting information. Most of what’s out there seems to refer to contextual offers which isn’t relevant. I’ve read that it does matter/ it doesn’t matter/ they take where you did GCSEs into account so it’s too late/ they prioritise state schools/ it’s all about grades and PS.

I fear the answer may lie somewhere in the middle of all that but is there anyone who could give more guidance? His current school are keen to keep him (he’s currently an academic scholar with a princely 5% bursary!) so I’m not convinced they’d give unbiased advice.

(Local state school is great. He’d have gone there but it’s C of E and we didn’t qualify being disorganised atheists who figured it out too late. They remove the church attendance requirement at A level.)

Does anyone have any info?

Private universities each have a flat tuition fee rate. Thus there is no category of ‘Overseas’ tuition fees. @poetryandwine

But in the US, most scholarships and financial aid (which cover quite a significant chunk of tuition fees) go to home students, and they’re really rare for international students.

This is true of private universities, except the most elite. They are less likely to make a distinction. Eg most of the Ivy League do not.

Public universities tend to reserve much of their aid for in-state students. Also a lot of aid comes via government grants and loans, restricted to Home students.

Shows a complete lack of understanding of how SFE works, which is part of the problem.

Interest (at RPI + 3%) started accruing the day she took out the loan. So by the time she graduated the loan had already increased to £64,000. She currently repays £300ish a month and doesn't even touch the interest, so the loan just keeps on growing. Every year it gets bigger and bigger despite her paying a fair wack of her salary into it. Think it's currently about £83,000.

She won't be able to start getting the capital down until she earns over £90,000. So she'll never repay it. And it will be closed after 30 years. So no, her education is not subsidised by anyone, because it has not cost £250,000 to train her.

Meanwhile, her friends with wealthy parents are not paying anything.

@mumsneedwine So she'll never repay it.
Exactly. So she won’t have to pay it back at all later on. If she only earns a modest income over the 40 years, the entire debt will just be wiped out completely, no matter how big it is. If she ends up becoming very rich, then she does have to pay a lot back—but that’s not really a big problem.

Meanwhile, her friends with wealthy parents are not paying anything.
They pay nothing because their parents are paying everything. First of all, I don’t think these parents are necessarily wealthy—they might just earn more, give their kids more financial support, or have saved up more. It is a similar situation: some parents with modest income just choose to send their children to private school, while other families on similar incomes decide to keep their kids in free state school and spend money on something else. If that’s what unfairness means to you, then so be it. Surely it's unfair to those children whose parents have fewer means and less willingness to give them more financial support for their education. But the unfairness does not come from the student loan per se.

Well she will pay off the £58,000 she originally borrowed. But in total it will have cost her £250,000 in repayments. Terms have been changed since she took it out (there was a guarantee that the threshold would increase each year - but it hasn't).

If you think paying £250k for a £53k loan is fair then I have no words. I call it loan sharking.

because it has not cost £250,000 to train her.
@mumsneedwine

£250k is just a number. Whether it's £250k or £1 billion in debt, it doesn't matter and does nothing to her at all, as long as she doesn’t have to pay it back and the debt will be wiped out after 40 years.
If, in the statistically unlikely case, she does end up paying off the full £250k, that means she would already have become a multimillionaire. Which really just goes to show that her university education might well be worth £250k to her, given her huge income.

It v much does matter to her. If she's borrowed £53 at 3% then she'd only repay about £90k. So in a few years she'd have more money in her pocket for buying a house maybe. But no, she'll be paying SFE an increasing amount every year until she is 48.

Maybe £250k isn't much to you, but it's a lot for most people who have borrowed £53k. She WILL repay ALL of the original loan, with £200,000 of interest.

How anyone with a brain can think this is a just way to treat our young people is beyond me. And we wonder why they are leaving.

and debt is 'wiped out' after 30 years on plan 2. Plan 5 is 40 years but much lower interest rate.

And how on earth do you think this will make her a millionaire 😂. She won't be paying £250k a year !!!

We moved our son from an independent school to state sixth-form college. The main reason was for him to be able to work independently rather than handheld through his A'levels. It's a good foundation to a university education. Other reasons were: closer to home; no more school fees; and academic excellence of the college.

She only has to pay 9% of her income above threshold. A simple calculation shows that her 40 years income minus threshold has to be around 11 times the total repayment amount. So, if the total repayment hits £250k, she would already have earned multi-millions over her lifetime.

Isn’t that how all loans, including mortgages work though? I’ll have paid maybe £3m in mortgage repayments - my house is worth half that. That’s compound interest!

I think you have a medic? I would argue that anyone on medicine, nursing or teaching, maybe others allied to health, who works in those areas post-graduation, should have some sort of loan forgiveness.

And don’t forget plan 5 interest is RPI, crap measure of inflation I agree, but there is at least an attempt to make it so graduates pay back the real, not compound, value.

Edited to add: I suspect plan 2 loans will see their interest rate capped closer to RPI at some point as well.

Just to clarify something I said earlier @mumsneedwine I shouldn’t have used the word multimillionaire. What I really mean is, for her to pay off the full £250k loan, her total lifetime pre-tax earnings would have to be in the multi-millions of pounds.

??? Earning a million over your working life does not make you a millionaire!

If she earns an average of £70,000 over her those 30 years (assuming she is a consultant by 32) she will earn £2.1 million. But half will go in tax, more in NI and 9% ish on SFE. Then there's rent, bills, indemnity, GMC, exams etc. Love the idea this makes you a millionaire. It's a good salary, and she saves hard, but a millionaire she will never be.

And I have never understood why what an 18+ adults parents earning are should have any affect on what a grown adult pays. Everyone should pay 1% as a graduate tax for life. Would actually get a bigger income for revenue and be a fairer system.

Off to see said child for lunch.

Cross posts. Most people will earn over a million in their working lives ? You only need to earn an average of £25,000 over 40 years to earn a million.

Yes, but not at RPI + 3%. That's the issue, not repaying the loan with a normal rate of interest.

And mine would live to have a mortgage, but doesn't have enough take home pay to get one (unless she wants to live in a shed).

If you think paying £250k for a £53k loan is fair then I have no words. I call it loan sharking. @mumsneedwine

Actually, you can take out whatever you consider the fairest loan to pay off your entire student loan and opt out of the government plan. However, you would lose all the government protections for young people, which is why almost no one sensible would actually do it. And even many wealthy families choose to take out the student loan anyway, even if they can easily afford to pay tuition themselves. I leave it to you to think why they would do that, if it really is as bad as a loan shark, as you see it.

It's weird that the government say doctors shouldn't use RPI when talking about the way their pay has been eroded, but it's a perfectly fine measure to charge them interest !

Plan 5 is better. Unfortunately a huge amount of people are on plan 2 and being shafted. They have just capped it at 6%, but still much higher than RPI/base rate/any other loan on the market.

No, you just introduce a graduate tax of 1% for life. Fair, v easy to administer and would raise more money.

And who is going to lend an 18 year old money ?? Where can they get a £15,000 a year loan - please tell me as that would be great. Wonder why it doesn't happen

This. The 'levelling the playing field' is pretty minimal.

Some places take into account school or home postcode. Or parental income. Or parental education. Or lots of other things. It varies. Not all state schools qualify. Might mean one grade lower in a subject at offer. Private school typically buys more than that.

The only way to know is check the online calculator.

And who is going to lend an 18 year old money ?? Where can they get a £15,000 a year loan - please tell me as that would be great. Wonder why it doesn't happen@mumsneedwine

They cannot take out such a loan themselves, but you can do it on their behalf or act as a guarantor, and you will find that the interest rates are much worse than those of government student loans.

I guess the original sin is that university tuition isn’t free, which is fair enough, but living costs aren’t free either, and half of @mumsneedwine 's DC 's £58k loan goes towards living expenses that have nothing to do with the university or the government. I find it hard to call student loans unfair, as they are meant to help with those costs, and the market rate for similar private loans is far more expensive.

Bless you. Yes, most parents can afford to take out £15,000 minimum every year. For at least 3 years. Where are these v generous lenders ??? The only way most families can afford for their kids to go to Uni is SFE unfortunately- otherwise they wouldn't do it !

How are interest rates higher than 6% ??? I can currently take out a loan of 4.8% with my bank.

This country used to have a fantastic system. It was not only free we got grants to go. Meaning no debt when graduated. Yes, less of us went but I've never understood why 50% was a sensible figure. It's going to stop naturally anyway now as do many kids don't see the point in Uni as it's so expensive. Apprenticeships and just getting a job are more popular- hence the job losses and closure/merging of Unis and many courses.

oh and the majority of that £58k is fees. Not living costs.