Clegg's apology over tuition fees

[longfingernails]

I think it is very risky, but probably the best way out of the Lib Dems (and his) enormous credibility hole. It was always a stupid pledge to make, frankly, knowing that both Tories and Labour were committed to the Browne review process.

But by subtly reminding the Westminster village that it was Vince Cable who was in charge of actually drafting the tuition fees legislation, Clegg can dramatically reduce the credibility of the quisling socialist responsible for the anti-Business Department. See how Cable was made to squirm by Paxo tonight! And now that Laws is back, the Orange Bookers can rise ascendant over the SDPers...

At the same time, there is a mindless section of the British voting populace, who feel "moved" by politicians undergoing the masochism strategy (see Tony Blair's temporarily semi-successful detox over Iraq). I don't understand it myself, but it obviously works.

What is good is that the current political atmosphere seems more coalicious than in recent times, and there accordingly seem to be progress on several fronts (most notably, more excellent work by Gove, ably assisted by Laws, on exam reform).

The Lib Dems need to realise that their ridiculous obstructionist strategy DOES hurt the Tories, yes, but it also hurts them. If they can be seen to be more responsible, and acting in the national interest rather than fighting like ferrets in the proverbial sack, then they might be able to build upon the (very shaky) plateau afforded by Clegg's apology.

[dotnet]

niceguy2 I just looked for where I could see your most recent post listed as I wanted to let you know, following your question at the end of August under a different topic heading, that 'my' 80 year old retired trawlerman had fallen through the benefits net (see what I did there?)
He is now 81 and is getting pension credit incl housing benefit, backdated by six months.
I hate to think of all the people who don't get the help and support they need, especially when I know about the exploitative businesses paying staff little over £6 an hour, employing 'internees' (slaves) for no money, evading corporation tax, etc. etc.
Incidentally a Lithuanian man showed me his last (temporary) contract of employment the other day - it had been for a two month stint, working for an engineering company. The company has now extended his term, but the contract he showed me (expiry date: September 12th just gone) shows his rate of pay as £6.12 an hour, This was for a thirty year old family man.
Does the company need reporting, or is this rate legal if you're a foreigner on a temporary contract?

[niceguy2]

I do understand where you are coming from but like I said, the whole thing needs a mindset change. Once you make the shift, it's not actually too bad.

The state has 'invested' in your child's education and is expecting it's return on investment in the form of more taxes if/when they earn more. It's a win for your child in the sense that if they don't earn, they don't pay and the govt loses. If they earn the big bucks then everyone wins.

You said you are questioning the whole thing. What is it you are questioning?

For me the logic goes something like this:

1. Ideally I want my kids to get their uni education for free. That isn't realistically going to happen.
   
   
2. The current system looks ok if you forget the headline figures and focus on the monthly repayments. Not ideal but there you go.
   
   
3. Statistically my child will earn more money with a degree than without.
   
   
4. My job as a parent is to give my kids the best opportunities I can give them. After that they make their own way in life. Given 3), it seems better than expecting them to get a job at 18.
   
   
   The other side of the coin is that you can't make the mindset change and encourage your child to just go to work since uni is expensive and hope for the best.
   
   One thing the new system will do (and about flipping time) is to make students & parents concentrate on degrees which will be useful in the real world. Over the last decade there was an explosion of degrees which were designed to attract students but arguably had very little value in the real world. Ie. Is that 3 year philosophy degree going to be good value for money? What job prospects will you have at the end of it?

[dreamingofsun]

niceguy - i have no problem with my children paying more tax, the more they earn - someone quoted on here that something like 80% of tax revenues come from those earning over 50K. What I do object to is that they have to pay a separate tax on top of this - ie graduate tax.

[niceguy2]

but does the current situation provide enough return given the risk is all on the individual - a young and financially inexperienced one given the stakes.

By the risk - I mean the extra money you need to source via credit cards and overdrafts as loan will only cover fees and partial rent (not everyone can get a bursary).

But that's always been the case. Even back when I was a student and didn't have to pay fees, my grant just about covered digs and a little bit extra I guess. But we all still lived on our student loans and overdrafts.


as a parent of kids who are at/about to start uni i always thought i'd be encouraging them like mad. now i find i am questioning the whole thing.

My DD will be going to uni in a few years. Once you look past the whole "staggering sum of debt" then it actually isn't bad. Like I said, look at it more as a monthly outgoing like a pension payment. In reality your child probably won't even notice the deductions since they are made via the payroll.

if my kids went to uni and only ever earnt £23k

Yes me too. BUT we all start somewhere. I left uni and started at the bottom. I fully expect my children will too. I don't expect them to land a graduate fast track position cos they are rarer than hen's teeth nowadays.

As I have told my daughter, having a degree is not a guarantee of a good job. Much will depend upon her own work ethic and to a certain extent blind luck. BUT statistically you will still earn more over a lifetime than without. Of course she could be the next female equivalent of Richard Branson but the odds are against her.

So if you want a good job with good pay, what you gonna do? Go to uni and join the statistically more likely to succeed group? Or not go and take your (smaller) chances?

and its £165 at the lowest repayment level and steps up proportionally - and hugely!

But even when you are earning £50k which is a take home of around £3k per MONTH then your repayments are around £217. It is more but it is still very affordable. If you are against paying more as you earn then you must also be very against the higher rate tax of 40% & 45% then.


Lastly and this is aimed at nooone in particular. I find it sort of ironic that when it comes to taxes we hear that those who earn more should pay more. Yet when it comes to their own child paying more (because they earn more) that all of a sudden that looks unfair. It seems it's ok to ask those with to pay more towards benefits but not their own education?

[dotnet]

Reallly sorry for your situation Timeforabiscuit. What it really boils down to is that this posh boy English government doesn't understand how ordinary people think. To them, a borrowing of £27k for education is a mere bagatelle. Posh boy Nick Clegg dragged down his party by reverting to type under the influence of pudding face. He's apologised - but how does that help our clever sixth formers?

[Timeforabiscuit]

I do earn over that amount and pay out two lots of childcare, am not making repayments and seeing this debt and it is a debt ramp up and up with the interest.

and its £165 at the lowest repayment level and steps up proportionally - and hugely!

[dreamingofsun]

somebloke - i find your attitude somewhat strange. as a parent of kids who are at/about to start uni i always thought i'd be encouraging them like mad. now i find i am questioning the whole thing.

i realise that its currently not proposed for A level students to pay - i guess most people realise this.

if my kids went to uni and only ever earnt £23k i would be grossly disappointed. it would have made the whole experience and cost pointless - both for them, us and the country at large. they could have earnt this amount working in the local supermarket with no qualifications at all.

why are you talking in terms of losing jobs? whats the point in the country paying for people's degree's if they can't keep a job? we should be thinking more in terms of educating talented young people in areas where we need graduates.

[somebloke123]

It could indeed be used for A levels - in fact for any education beyond the minimum school leaving age - but that's not currently proposed.

No one need be deterred from starting a degree course on the basis of needing to repay the fees. They will only pay back anything if they start earning more than a certain amount. IIRC its 11% of anything they earn above £21500 (gross) and the repayment is deducted before tax.

So if you earn £23,000 you will pay graduate tax of 11% of £1,500 which is £165 per year or under£14 per month (paid before tax)

Compare with the cost of a TV license, which I think is about £145 per year, paid after tax.

The difference is that if you lose your job or your income falls below £21500 you will no longer be required to continue the loan repayments but you will have to continue paying your TV license.

People (not you) who go on about graduates being "saddled with crippling debt" or other alarmist outbursts are doing potential students a great disservice.

[Timeforabiscuit]

The only reason that business doesn't pay is because it would hit Local Government, NHS and Teaching far far harder than the government would like.

The most likely career for a Geography Graduate is a secondary school teacher.

[Timeforabiscuit]

I would argue that the current system works far too much in the favor of employers.
A degree is more often seen as shorthand to have candidates of a certain level educational rigor.

If degrees were not generally needed - they'd simply advertise must have 3 a-level A-C, but employers put the emphasis on degree - why is this??

The benefits of qualification should be met by those principally seeing the benefit - employers!!!!

[dreamingofsun]

somebloke - graduates generally will pay more in taxation anyway and the whole population will benefit from their expertise (or at least that from some of the courses). people on very low pay had/or should have had the chance to go to uni - possibly they decided they didn't want to commit to the work involved.

if we are to have a professional, world leading workforce then we need qualified and bright people. deterring them from study seems to me a backward step. how are we to have leading organisations to sustain the economy if we as a country aren't prepared to train people - and its these people who will provide the jobs for the lower paid.

all the arguments please use to justify student loans, could in effect be used for A levels as well. Why shouldn't people pay for these if you use the same logic?

[somebloke123]

Taxing people for wanting to learn is just plain sht

Well if education is not to be funded through taxes then either you have to

1. Rely wholly on the private sector to fund it e.g. through sponsorships and scholarships, or
   

1. You have to persuade all university staff to work for free. Good luck with that.
   

If it is to be funded through taxation, the alternatives are basically:

1. Full grants funded from general taxation, so the David Camerons of this world doing their Oxford PPEs are paid for by all taxpayers regardless of whether they went to university, which will include quite low paid people in menial jobs, or
   

1. Taxes paid by those who both did go to university and also get more than a certain amount i.e. the present "loans" system, which are not loans in the normal sense but a sort of graduate tax.
   

1. Not gonna happen
   
2. Ditto
   
3. Grossly unfair
   
4. Worst option with the exception of all the others.
   

I do agree though about current loans only covering fees and some of accommodation, so that extra living expenses are needed.

[Timeforabiscuit]

Absolutely - education should be seen as an investment, but does the current situation provide enough return given the risk is all on the individual - a young and financially inexperienced one given the stakes.

By the risk - I mean the extra money you need to source via credit cards and overdrafts as loan will only cover fees and partial rent (not everyone can get a bursary).

My subject was Geography - I am passionate about it, get me into a room discussing mapping and Geographic Information Systems and i am a pig in muck , i drifted onto the course as at 18 I had no firm direction.

The current system works very well for those who are very driven and focused - they will get what they want because they are built that way.

This system weeds out the 2:2 and below.

If I was to go through the system now I would probably baulk at a degree -and I think that's wrong because I would never be able to pay it back, never.

There is shame in owing, and there is massive shame in looking at my bright 4 year old daughter and thinking that I will still be paying off my loan when she is just starting to look at her options at 18.

Taxing people for wanting to learn is just plain sh*t

[somebloke123]

Grants are indeed best - for the student that is.

However they do have to be funded from taxes. When I went to university (so long ago that they weren't even called "unis" - that's how old I am) I did get a grant, but at that time only around 5-10% of school leavers went on to university.

One can certainly argue about whether it was the top 5% or just the most fortunate - and also whether it was right in any case for them to be grants rather than repayable loans.

The reality though was that for such a low student population it was at least doable economically and politically. With 30-40% now going to university it just isn't. Well - maybe it is for the Welsh and Scottish because they have relatively low populations and are subsidised by South East England.

With the vastly larger student population now the new system seems reasonable enough to me compared with any feasible alternative. As has already been pointed out it's more in the nature of a graduate tax rather than a loan. And if after graduation you become a poor artist living in a cold garret you will never have to repay a penny. You will have got your expensive university education absolutely free courtesy of the taxpayer.

Also if we're talking about jobs which are greatly in demand, and for which there is a shortage of applicants, whether it be engineers, translators or whatever, the salaries offered will have to be adjusted to match in order to attract suitable candidates. Since it is ultimately take-home rather than gross pay which matters, it may be that the market will have to adjust to accommodate any loss in net pay due to loan repayment.

[CogitoErgoSometimes]

"The drop in university applications by students in England surely speaks volumes? "

I think it actually says that young people are looking at FE more critically, not just rolling out of A-levels into degree courses just to kill time. That was always the down-side in the old days.

Do you really think there's any shame these days attached to debt? My view is that the buy now pay later culture is very firmly entrenched, unlike 20 or 30 year ago when saving was encouraged over borrowing.

[dotnet]

Grants were best, the 'old' system was less bad than the recently imposed one. IF I'd needed to borrow £3,250 a year for tuition fees (approx the amount last year, if I remember) - well, that's not great, but as I think it's important to clear debts ASAP, I'd be prepared to start paying back once I earned £15k. The over all amount owed would be much, much less under the old system.
If you've been brought up to pay off what you owe, then the failure to pay anything because one's wages don't reach £21k will feel shabby - like declaring oneself bankrupt. People who are honourable about debts hate the feeling that arrears aren't being dealt with.
The drop in university applications by students in England surely speaks volumes? Loads of decent young people hate the idea of becoming grand scale debtors.

[niceguy2]

Timeforabiscuit. You are in a very similar position to me except i still got a small grant since they were being phased out.

The thing missing here is a change of mindset. You are looking at this as a £65k debt for your 21 year old and thinking "OMG that's terrible". But what if they went out and borrowed £200k for a mortgage? Would you look at it as "OMG that's terrible that they have a £200k debt!" Chances are you wouldn't because you'd see it as an investment.

The uni education should also be seen as an investment. One which crucially you repayments are based on your ability to pay.

The other thing that is very important to bear in mind is that the repayments are structured such that the monthly amounts are lower than under the old system. So in actual fact the monthly burden is less.

Like I said before, the days of free uni education are gone and sadly about as likely to return as Lord Lucan. Once you look into the actual details and not the rhetoric, it's actually a fairer system than the one it replaces.

[UnimaginitiveDadThemedUsername]

But as niceguy2 points out, new graduates aren't going to be in the same financial position as you, Biscuit. And it's not debt in the same way as a credit card debt is debt.

[Timeforabiscuit]

I voted Lib Dem purely on their Student Finance position, I was one of the first intake to have no Grant and all Loan.

I have a middle ranking technical position (which needs a degree), and brings in a reasonable salary.

BUT if I continue having the payments deducted from my salary as stands, it will never be paid off.

I have a mortgage (much cheaper than renting in this area), two children in full time childcare, redundancies and all the normal "stuff" - oh and apparently I need a pension .

The choice was simple for me - when I was earning enough to repay student loan, I stopped my pension as I was on a council pay freeze and childcare went up. I think this is what many people in my position do in the short term.

It is an extra tax - but mine is around £19,000 ballooning up to £24,00 (the low pay years piling on the interest)

I cannot imagine a £65,000 debt for a 21 year old, it's reprehensible.

[CogitoErgoSometimes]

I didn't get a grant, didn't get any cash from parents & never got any interesting holidays either. :) Worked like stink to pay rent to various landlords and was one of the few that didn't have a big overdraft at the end of 4 years.

I don't seriously think any student is going to 'forget' about their student debt any more than my old uni mates 'forgot' about their overdrafts. They'll be getting annual statements presumably and they can choose to work summer jobs and so on if they want to bring down the balance a bit quicker. From what I hear from friends with kids going to uni this year the standard of tuition and facilities are certainly much more clued up than they were in my day when we were seen as a bit of an inconvenience rather than a valued customer. ...

[dotnet]

How odd that you didn't appreciate the student grant system - I certainly did. Yes, we mostly needed to get jobs during the summer and at Christmas, but that was our own choice so we could take an interesting holiday camping abroad or something once a year.
I know the idea is that this year's students are supposed to 'forget' that they have put themselves into debt, and not worry about it, but personally I think that is a really bad attitude to inculcate.

Borrow - and then forget about it; that's a bad, bad mindset for adult life.

[CogitoErgoSometimes]

When I was at university back in the eighties I wish someone had told me we were enjoying the halcyon days of free education!!! There may have been no tuition fees but there were plenty of other costs to contend with as a student. Despite being the DD of parents on low income I didn't get a grant because they had savings. Even those that got a grant ran short. So I and many other working class kids in a similar situation made ends meet either working nights, holidays and weekends or with massive overdrafts, all of which had to be paid back at the going rate whether you had a job or not. Children from wealthy families could just call Dad for some extra cash when they ran out.... same as they do now.

I think the system in place today where the loans are at preferential rates and where it doesn't have to be paid back if you're not earning may look expensive on paper but is much more up front and affordable.

[dotnet]

I don't trust the claim that the threshold of £21k earnings before starting to pay off the debt, will rise with inflation. Sooner or later some b......d in government will have the spiffing wheeze of freezing the threshold, thus calling to account more and more people whose earnings are further and further below the national average wage.
The whole thing stinks. My dd's cousins are Scots, so I'm very very aware that our kids didn't have to be treated this way.

[niceguy2]

Yes dreaming, I take your point on free uni fees in Scotland & Wales but I was simply referring to the fact that as someone living in England, with both main parties committed to charging fees and the lib dems who probably will run away screaming at any future votes on anything to do with students, i think it's unrealistic for me to hope for free tuition. Like I said, personally I think it should be free but that's a personal opinion.

As for key jobs in London, I don't think it will have any impact at all. Why? Because under the new system, monthly repayments are actually lower than the previous system.

Let me give you an example. Let's say a teacher is earning £40k. Some earn more, some earn less but let's just go with it as an example. Under the old system they would have been repaying £181 per month. The new system, they will repay £142 per month.

So they repay less but over a longer period. And let's face it £40 living in London is neither here nor there if you were planning to buy a house.

People are understandably struggling to get their heads around the size of the debt but are not fully understanding the nature of the system.

As Martin Lewis more eloquently puts it than I can:

"It?s time to stop calling student loans 'debts'. They are not really loans at all ? what we really have is no-win, no-fee higher education."

source

[dreamingofsun]

niceguy - agree with some of what you say. Free degrees aren't unrealistic in wales and scotland though.

you've also not commented on my suggestion that it will affect the supply of people in key jobs that people don't need to do in the south or london, eg teachers.