You don't need to be an 'investor' to invest in Singletrack: 6 days left: 95% of target - Find out more
Thats what it is tho. Its a debt that will hang over you for decades.
It's a graduate tax, really.
No it is not molgrips - stop calling it that
!) there is a set amount to pay back which is the amount you borrowed
2) once you have paid back that amount you no longer pay it
Both of those things make it a loan albeit a one with conditional repayments
Graduate tax would be a % on basic rate for all graduates
Its a debt that will hang over you for decades.
No it is not TJ – stop calling it that
1) there is a set percentage of your salary to pay each month which is completely unrelated to the amount you borrowed
2) if you earn less than a certain amount, you dint need to pay this tax at all.
Both of those things make it a tax albeit a one which certain high earners will avoid ( plus ca change)
Both of those things make it a loan albeit a one with conditional repayments
Ok, it's a loan that you never have to pay back if you can't afford it, and your repayments are on a sliding scale dependent on your income. These are massive differences between student loans in their current form and other kinds of unsecured loans.
The 'all credit is bad' line is silly, otherwise however would people buy houses? There's credit and there's credit. If you pay monthly for your mobile phone, you are using credit. Debt isn't bad - BAD debt is bad.
As you say, people are put off university by words like 'loan' and 'debt'. This is very a bad thing, in my view, because people who might benefit greatly from university don't end up going. Mrs Grips is talking to students all the time who aren't aware of the lenient repayment terms. They are afraid of debt, but then when the repayment terms are explained, they realise it can constitute a worthwhile investment for their goals in life.
So please, don't call it a loan. It can end up limiting people's lives.
It's not a tax. You opt into it, receive funding, are charged interest, and then make payments that stop if you've paid back what you received (plus the interest). The debts can be bought and sold. The interests rates change. You pay a private company, not the state. It's a loan with rules around repayments designed to protect those who still owe while they are on lower wages. It is a loan.
So please, don’t call it a loan. It can end up limiting people’s lives.
It is a loan - one with conditional re[payments and of course its intended to disuade poor peopkle from going to university
Call a spade a spade FFS. Otherwise you are letting the tories get away with it
So please, don’t call it a loan. It can end up limiting people’s lives.
So does getting into masses of debt (because it is a debt) for the vast swathes of degrees out there that are useless.
And by normalising the useless degree it makes an easy target for lazy employers to cut down their huge application pools.
Lots of people are life limited by the stigma surrounding getting a trade and end up getting a poor degree from a crap uni because it's socially acceptable to go to uni and do any degree without an end goal
But one things sure. It's a loan it's a debt and its terms are getting worse every iteration
It's not a loan anymore, it's a graduate tax plain and simple.
I graduated 4 years ago into a well paying engineering job and my student loan has actually increased despite paying around a hundred quid a month into it.
It's not designed to ever be paid back - just have to accept you'll pay it for 30 years then see it wiped. It's honestly unjust to call it a loan when the vast majority of university leavers will never pay it off.
and my student loan has actually increased despite paying around a hundred quid a month into it
so it is a loan then with interest applied. Its not a graduate tax in any form A graduate tax does not have an amount owed nor interest nor is it a payment to a private company
so it is a loan then with interest applied. Its not a graduate tax in any form
Yes but it gets wiped after a certain time UNLIKE ANY OTHER LOAN.
And by normalising the useless degree it makes an easy target for lazy employers to cut down their huge application pools.
That's a different argument.
So - its an unusual state backed loan with conditional repayments. Its still a debt and a loan
Molgrips - if you cannot understand why folk have this attitude to debt then at least accept it exists. I had to. Its hard to understand the fear of debt unless you have lived it.
also understand that this is a deliberate ploy to put off folk from poorer backgrounds from going to university
also understand that this is a deliberate ploy to put off folk from poorer backgrounds from going to university
Nah. It only penalises the lower middle classes.
It's means tested based on your parents earnings for the majority of entrants. If your parents earn well but also have high outgoings such as a mortgage on a. Small family home..... You going to uni can cripple them Vs if your poor you can still access grants and scholarships.....
It’s means tested based on your parents earnings for the majority of entrants
Only for the maintenance loan bit. Tuition fees are £9250 a year for everyone, and you get the full loan for that.
And I'm not sure people who "earn well but have high outgoings" are traditionally considered to be "lower middle class".
I consider myself to have had a lower middle class upbringing and for it me was more like "earn poorly but listen to radio 4 and don't let you watch the A team"!
Well, I've just filled in the finance and income details for MCJnr's Student Finance for next year.
On checking my P60 I see that they seem to have missed 6 months income.
It's not like I work for HMRC or anything......
Well since the entry level for general middle class seems to move up every year
It's possible you were an 80s kid.
Mean while I was being facicious that the cost of living has gone up so much that even having a modest house means that if you are considered to earn well your still in the lower societel standings in terms of wealth compared to folk doing your job in years gone buy. Those are the folk that are hit the worst by the student loan system as oppose to the actually well off or those below the threshold.
Only for the maintenance loan bit. Tuition fees are £9250 a year for everyone, and you get the full loan for that.
Well best hope you live in a university city and don't need to move out or pay digs to your parents then. Is there still even a flat rate maintainance ... When I was at uni you could apply for flat rate and it would cover about 3 months rent.....- you had to find the rest else where.
It’s means tested based on your parents earnings for the majority of entrants.
Well, it's mean tested as in you can take out a bigger loan if your parents are low earners. Of course, if you have very rich parents you can choose to not take the loan at all... and then not repay anything, or have any interest to pay (ie, it is not a tax).
If that's what you took from my post.
I wasn't really replying to the whole of your post, sorry. Those who get the bigger Maintenance Loans also struggle (as do their parents in supporting) not just those who don't. Sorry for crossing the streams as regards loan/tax "discussion".
Molgrips – if you cannot understand why folk have this attitude to debt then at least accept it exists. I had to. Its hard to understand the fear of debt unless you have lived it.
Of course, I can understand why people think like this but it's not necessarily rational. People are afraid of something being bad when it's not that bad and it might be worth it for what they want.
Hard fast rules regardless of circumstances are foolish, IMO. Debt can be good, it allows you to get things you never would be able to otherwise such as houses, and in this case degrees. The reality is that people need to understand that student loan debt is not as bad as other kinds of debts, and it should not put you off university if you really want to go. That's my view, I don't want to argue about it.
The reality is that people need to understand that student loan debt is not as bad as other kinds of debts, and it should not put you off university if you really want to go.
Agreed. But it is debt, and it isn't a tax.
Molgrips – if you cannot understand why folk have this attitude to debt then at least accept it exists. I had to. Its hard to understand the fear of debt unless you have lived it.
Having spent most of the thread refusing to see anyone else'e point of view, how ironic!
so it is a loan then with interest applied. Its not a graduate tax in any form A graduate tax does not have an amount owed nor interest nor is it a payment to a private company
It's a loan only in name, and a tax in practice. It's designed to be effectively impossible to pay back for the vast majority of university leavers. At the moment I recall the break even point where I pay off more than the interest is about £55-60k a year. And that sort of money is over a decade away at least for me, and potentially never for many people who went to uni. So in the meantime that break even point is ever increasing with the incredibly high interest rate (set to top 12% this year, usually around 4-6%). Unless you go straight into a £50k+ job and continue up the ranks quickly you'll never pay if off.
A loan in the traditional sense will have repercussions if you can't make repayments - you'd have your house repossessed or have court proceedings against you. If you loose your job the SLC won't be knocking on your door asking why you're not making repayments etc.
What loan do you not have to pay back if you're earning under a threshold, or wipes itself after 30 years? It's a graduate tax in that if you earn above roughly the uk median, you pay a 'tax' to offset the costs of your higher education as you have a decent paying job as a result (aware the 'tax' goes to the privatised SLC which is another frustration of the system).
I understand it can be presented as a loan or a tax. It doesn’t however fit either perfectly in their traditional sense, so perhaps should have its own name.
The key for me, and the argument for not calling it a loan, is that you can’t default on it and it doesn’t show on your credit file. A student “loan” won’t bankrupt you if you don’t repay it, and won’t alter your traditional credit worthiness.
Whether the anticipated outcomes from your education (career entry requirements, increased earning potential, experience, friendship, social status) are worth the ongoing cost (which is significant) is a decision for the individual. Those benefits could be achieved by other means, depending on the individual and their vocational or professional preferences.
This is what prospective students should be considering above all else, without the stigma attached to debt clouding their decision.
Of course, I can understand why people think like this but it’s not necessarily rational.
sorry Molgrips - this statement just shows that you do not understand as you dismiss it as irrational. Thats pretty offensive given that I used my Julie as an example - basically you are calling her irrational.
footflaps - why should I agree with folk who claim it is a tax when it clearly is not? A graduate tax would be applied to all graduates and would not have interest applied and would not stop once you had paid a certain amount and would not alter depending how much you borrow.
If you have the money, you don't have to borrow it, and then don't have to pay it back (with interest). So it's not a tax. There absolutely are situations were you don't have to pay it all back... that doesn't mean it isn't a loan, it just means it has exceptional terms. But, like the changes to the interest charged on it... borrowers (sorry, those students who have to take out the loans) do have the worry that those exceptional terms will be eroded over time by successive governments. And if we have a series of Conservative governments... that fear could be well founded. Meanwhile, those graduates who had the means (from their parents, sponsoring company, armed service or wherever) not to take out the loans... don't have to worry about paying anything... don't have to worry about interest rates changing on them... don't have to worry about repayments thresholds being changed (or not keeping up with inflation)... don't have to worry about terms being switched on them... yeah... it's not the same as other debt... but in some ways it very much feels like it. So much is out of your control, and you have worries that those who don't take on the debt (due to inheritance or whatever) do not. The protection the law/government gives you from the company you owe money to never quite feels like a real unbreakable guarantee for the life of the loan.
'why should I agree with folk who claim it is a tax when it clearly is not? A graduate tax would be applied to all graduates and would not have interest applied and would not stop once you had paid a certain amount and would not alter depending how much you borrow.'
It functions as a tax for the vast majority of students, therefore it's unjust to really call it a loan. You have to 'borrow it' unless you're sponsored by a company (fair enough), or have ludicrously rich parents (i.e tory doner material), you will be paying that 'loan' for 30 years with no real chance of ever paying it off.
Actually, they've since changed it to 35 years for new students - it's becoming even more of a tax for the majority of your working life.
Honestly, a blanket tax applying to all would be fairer really, maybe with some exception for sponsored students. At the moment if you're born to rich parents you can walk out without owing a penny, whereas everyone else will be paying a 'tax' for the next 30-35 years. Especially now they've scrapped maintenance grants and added them to the total owed.
Sad thing for me is talking to sixth formers "what do you want to do at Uni" "accountancy" "what! Really".
Very very few just do a subject they enjoy anymore....
a blanket tax applying to all would be fairer really
And would be a tax. The system we have is not a graduate tax. It is a loan system with terms designed to protect those who borrow and can’t pay the full amount back long term (and this could change). It is not a tax.
Very very few just do a subject they enjoy anymore….
It is very sad. I’ve advised every young person who has asked (including my own kids) to go to uni and study something they want to learn about. Don’t use it as training, use it as education. The current funding system is designed to put people off doing that, and to consider too heavily the finances when choosing their education. University funding should be hidden from students, just as it is for schools and sixthforms. Maintenance grants (not loans) should be there for all. We should all be paying for that via taxes on wealth, inheritance, earnings and spending based on ability to pay. The cost of education should be born by us all and divorced from the choices students make.
Honestly, a blanket tax applying to all would be fairer really
Of course it would. Having a well educated and highly skilled workforce very obviously benefits the economy of the whole country. And statistically graduates earn more and end up paying more tax anyway.
@tjagain I apologise for coming across as insulting, it's not meant to be. Everyone is irrational - me, you the entire human race on a systematic level. We just vary slightly in how we apply that.
Sad thing for me is talking to sixth formers “what do you want to do at Uni” “accountancy” “what! Really”.
According to my Mrs, there's different categories of applicants:
1. Those that want to earn lots of money and don't really care what job it is. Which is legitimate, really. If you don't really care for any of the subjects on offer, but you still have to make a living - why not? I mean if your passion is cycling you can't do a degree in that, so might as well do accountancy so you can get rich and buy nice bikes.
2. Those whose parents are pressuring them into a particular profession.
3. Those who have no idea and are just going along with it because what else is there to do? These are the ones who answer 'dunno' to all her questions.
4. People who actually are really interested in a subject and want to study it, either for a career or not. The majority of these seem to be gamers who want to work as game developers so study computer science.
I mean if your passion is cycling you can’t do a degree in that
Sports science?
Though, to be honest, for 95% of graduates the money is so terrible that you can't even afford nice bikes (or any bikes in some cases).
TBH, looking at the current system of loans, if i was even 10 years younger there is no way on this earth or the next i'd have gone to uni.
Parents couldn't afford it even when i did go due to reasons. Due to similar reasons I ended up with 4 times the average debt when i graduated, 90% of it spent on food, rent and degree stuff. Glad that tuition fees were covered. Still only took me 7 or 8 years to pay it off. (Most of the money was bank loans with 5-6-7 year repayment terms).
And i lived with someone for 15 years who was pathologically opposed to debt in any way shape or form due to her upbringing, both parents in low paid jobs, living (almost) hand to mouth. It made her *very very* nervous when we committed to a very modest mortgage, 30 years of debt. Even though (at the time) the household income was in the top 10% nationally. She spent months stressing about covering repayment and interest.
Good debt is debt for investment with return. Bad debt is debt for buying shit like a nice car a sofa etc.
It's a loan if the investment in the degree results in you earning more (after tax and loan payments) than you would have if you had taken a different educational route.
If you never pay off the debt then the chances that you're income (after tax and loans) is probably not going to be more than if you had taken a different educational route. At this point although still a loan it is effectively a tax. Just because it stops at a set time it can still be effectively a tax. See NI which stops at 65 or 66 or whatever.
The problem with the statistics of graduate Vs non graduate life earnings is
1. It uses older data
2. I compares graduates with non graduates, so there is a significant number of people without any or very basic qualifications being compared against graduates. If you are choosing to go to uni or not it's probably between go to uni or do this course, or this apprenticeship etc not go to uni or do nothing so a better comparison is uni Vs people who have had some form of post school training.
Don’t use it as training, use it as education.
And this is how it should be considered.
Education is to allow you to understand the training that you may wish to undertake after uni.
Personally I wish I had done what I wanted to do after uni which was become a builder but felt it was a waste. Now I have spent 20 years hating my job instead.
22 years on and I still owe mine. No surrender!!!!