BBC News banging on about student loans, again!
Discussion
Interesting article on the Bbc- I'll leave this summer with about £25k of student debt (that's on fees of 'only' 3.5k) but in terms of it as an investment, if I'll be retiring when I'm 70, then that's only £500/year extra of my working life that I have to earn in order to make it pay off. In return for this I've got a great job lined up, had a fab three years and arguably learned a lot of skills and 'stuff' that I wouldn't have otherwise! 
lazystudent said:
Interesting article on the Bbc- I'll leave this summer with about £25k of student debt (that's on fees of 'only' 3.5k) but in terms of it as an investment, if I'll be retiring when I'm 70, then that's only £500/year extra of my working life that I have to earn in order to make it pay off. In return for this I've got a great job lined up, had a fab three years and arguably learned a lot of skills and 'stuff' that I wouldn't have otherwise!
Best laid plans . . . The one constant is that nothing goes the way you want it to. Life has its ups and its down.
Derek Smith said:
Best laid plans . . .
The one constant is that nothing goes the way you want it to. Life has its ups and its down.
Yeah of course. But I'd argue that that's pretty much down to chance, and going or not going to uni has nothing to do with that. What it does is open more doors- if you choose to use those doors or not, that's up to you, but it won't really have any impact on whether or not things go the way you want them to in terms of 'random events'? If that makes sense...The one constant is that nothing goes the way you want it to. Life has its ups and its down.
lazystudent said:
Derek Smith said:
Best laid plans . . .
The one constant is that nothing goes the way you want it to. Life has its ups and its down.
Yeah of course. But I'd argue that that's pretty much down to chance, and going or not going to uni has nothing to do with that. What it does is open more doors- if you choose to use those doors or not, that's up to you, but it won't really have any impact on whether or not things go the way you want them to in terms of 'random events'? If that makes sense...The one constant is that nothing goes the way you want it to. Life has its ups and its down.
lazystudent said:
Derek Smith said:
Best laid plans . . .
The one constant is that nothing goes the way you want it to. Life has its ups and its down.
Yeah of course. But I'd argue that that's pretty much down to chance, and going or not going to uni has nothing to do with that. What it does is open more doors- if you choose to use those doors or not, that's up to you, but it won't really have any impact on whether or not things go the way you want them to in terms of 'random events'? If that makes sense...The one constant is that nothing goes the way you want it to. Life has its ups and its down.
What I meant was that the loan is a hostage to fortune. No one knows what's going to happen.
In my case I had the last five years of my time in the police all mapped out. Two and a half years from the time I was never going to look back I became seriously ill. I was more or less all clear after four and half. My plans were ruined, the job I was going to do after retirement disappeared and, just to put the boot in, the 2008 recession cost me a lot in share value. A lot. (Nice timing there, lads.) I still own the car I had when I became ill.
But I have no real debts. But I have no real money.
If I had had a massive loan around my neck then all the planning in the world would have been for nought. I would have had a time when I would not have been able to pay it off. After 54 months I'd have been in even greater debt and the loss of capital would have been much more serious.
I'm not bitter. I came through it and when you are ill you form sort of friendships with people in the same situation, those you don't have to explain things to. These friendships demonstrated that I am one of the lucky ones. The very lucky ones. It also clarifies things.
But, and it is a big but, what if this had come just after I left uni, or rather just after this lad who was on the BBC left uni?
I was brought up at a time when being in debt was seen as some sort of chavvy indicator. My parents saved for the little luxuries, like cars, the TV, a radiogram (look it up if you don't know what one is) that sort of thing. Their beleif was that things change. And they were right. This chap might think he has it cracked but he hasn't. This debt might well come back to bite him. There again, he might get offered a job which leads him to become a millionaire.
Of course, if he has a mummy and daddy who can bail him out if times get tough then good on him. Although, of course, parents can have difficult times as well. My parents said that if I had problems they would pay the mortgage on my house for me. I would have to fund everything else. That was a real realief. I worried about the £30.19s.6d pcm.
the thing with student loans these days is that its not really a concern, it such a small proportion taken from your income, and pre income tax.
and if you drop below the threshold level for payment, it stops - so if you lose your job, repayments on the loan stop.
banks dont take much notice of it for taking out a mortgage.
plus the changes to the loan scheme put the repayment threshold alot higher than the just above min wage level that my loan is repaid at.
and if you drop below the threshold level for payment, it stops - so if you lose your job, repayments on the loan stop.
banks dont take much notice of it for taking out a mortgage.
plus the changes to the loan scheme put the repayment threshold alot higher than the just above min wage level that my loan is repaid at.
lord summerisle said:
the thing with student loans these days is that its not really a concern, it such a small proportion taken from your income, and pre income tax.
and if you drop below the threshold level for payment, it stops - so if you lose your job, repayments on the loan stop.
banks dont take much notice of it for taking out a mortgage.
plus the changes to the loan scheme put the repayment threshold alot higher than the just above min wage level that my loan is repaid at.
The loan is only part of the debt they will come out with. Further, there's the interest.and if you drop below the threshold level for payment, it stops - so if you lose your job, repayments on the loan stop.
banks dont take much notice of it for taking out a mortgage.
plus the changes to the loan scheme put the repayment threshold alot higher than the just above min wage level that my loan is repaid at.
My point is that poor people will think twice about taking on such a massive debt, if they've got any sense that is.
Further, it is not a case of banks not taking much notice of it. The only judge of how comfotable you are is how much disposable income you have. Micawber put it succinctly. No matter that it might be only £100 pcm. There have been time in my life when, despite having an above average income, £100pcm would have been a tremendous amount to take.
singlecoil said:
The country benefits when firms invest in new machinery, but by and large they have to pay for it themselves. Education is an investment, no reason why it should be free. Let he who gets it pay for it.
I disagree, unless you're specifically referring to 'higher' levels of education only- education is a massively important social 'good' and I don't think you'd get very far by sugesting that the government shouldn't pay for it! If education just benefited the individual concerned then I could see your point but it goes so much further than that! Well, in most cases anyway...The monthly repayments do bite a large chunk out of salaries...they take 9% of everything over and above £15000 a year....cleaners, factory workers, road sweepers and dustmen earn that...so all this stuff about only paying I back if you earn enough is b
ks....the vast majority will and may find themselves worse off by 9% than those that did not go to uni. Even on a highish salary it bites....well over £200 a month for me...in addition to 21% income tax, 11% national insurance, 6% pension....they might as well take the lot! Then a further 17.5% on everything I buy...more on fuel. Oh and £200 a month council tax...£12 TV licence 'tax' and £60 a monthroad tax on our vehicles. Shocking...the student loan stuff can tip the balance given all that. Now they talk of removing child allowance for couples on £Xxx discouraging the very educated people society ought to be encouraging to bring up children.
ks....the vast majority will and may find themselves worse off by 9% than those that did not go to uni. Even on a highish salary it bites....well over £200 a month for me...in addition to 21% income tax, 11% national insurance, 6% pension....they might as well take the lot! Then a further 17.5% on everything I buy...more on fuel. Oh and £200 a month council tax...£12 TV licence 'tax' and £60 a monthroad tax on our vehicles. Shocking...the student loan stuff can tip the balance given all that. Now they talk of removing child allowance for couples on £Xxx discouraging the very educated people society ought to be encouraging to bring up children.singlecoil said:
Education is an investment, no reason why it should be free.
Although, while I've not got my spreadsheet out, I'd imagine the ROI via extra taxation on a university education (or even some polytechnic courses) would be pretty good for the government. Certainly a better plan than throwing down the black hole of social welfare from which you will only get small and diminishing return. So on balance, especially for young people, I'd rather they where pushed into education (with a bayonet pointed at their backs if needed) than onto they social welfare conveyor even if the course they are doing is a carpentry or panel beating.
It's fustrating as well because abolishing long term social welfare for able people (if you are on it for a couple of weeks or months between jobs in a recession I think generally we are tolerant) seems to be one of the few areas of political consensus. I remember reading a book once about the great depression and a study carried out where the habits of people laid off where observed, for those who didn't get rehired they eventually stopped looking because the experience became so demotivating (even though there wasn't really a social welfare system in place at the time).
Indeed about 3.6% of people are unemployable (judging by the fact that in the boom this was the long term unemployment rate, if you can't get a job in ideal conditions you are unemployable really) overall with the unemployment rate at 8.4% now it seem there are plenty of able people who could work or go into training. It does grate on me a bit when people accuse all the unemployed of being lazy since clearly indifference to your employment situation isn't a choice many people have made in the past and little has changed since. Simply put most people who have the ability to work do so and most of those who don't work would like to work.
My last point and most important is that with age demographics, an intergenerational debt burden and increasing competition from developing countries the UK will have to have a better educated and a more productive workforce if it intends to maintain the standards of living to which people have grown accustomed. The UK can't keep trading on tomorrow (by writing IOUs) while damaging (youth unemployment and education cuts) the "assets" it intends to use to generate this promised future wealth, I doubt anyone reading this thinks that is a sustainable business model.
Derek Smith said:
The loan is only part of the debt they will come out with. Further, there's the interest.
My point is that poor people will think twice about taking on such a massive debt, if they've got any sense that is.
Further, it is not a case of banks not taking much notice of it. The only judge of how comfotable you are is how much disposable income you have. Micawber put it succinctly. No matter that it might be only £100 pcm. There have been time in my life when, despite having an above average income, £100pcm would have been a tremendous amount to take.
Sorry Derek but you are talking a lot of scaremongering rubbish about the loans. As said the new repayments are much smaller than the previous loans system (starting at £50 a month if you are earning around £25000 a year - by comparison I'm paying out nearly £100 a month on not much more money) and it is not taken into account by loans or mortgage companies.My point is that poor people will think twice about taking on such a massive debt, if they've got any sense that is.
Further, it is not a case of banks not taking much notice of it. The only judge of how comfotable you are is how much disposable income you have. Micawber put it succinctly. No matter that it might be only £100 pcm. There have been time in my life when, despite having an above average income, £100pcm would have been a tremendous amount to take.
And, of course, if you run into trouble (lose job, need to take a smaller paying job) then the payments stop. If you haven't paid it back in 30 years it's written off. In many ways if you are living in the North, where wages are on average MUCH lower, then it's almost irrelevant about the final total, as it will never in all likelyhood be paid back. There is no difference in borrowing £30K or £50K if you will only ever repay £25K. If you get lucky and a really well paying job, then you'll repay it all - but you will be able to afford it, because you are earning more!
But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students (computing and computational sciences) not to be put off by people who only regurgitate the "It's a lot of money" line.
Jessicus said:
Sorry Derek but you are talking a lot of scaremongering rubbish about the loans. As said the new repayments are much smaller than the previous loans system (starting at £50 a month if you are earning around £25000 a year - by comparison I'm paying out nearly £100 a month on not much more money) and it is not taken into account by loans or mortgage companies.
And, of course, if you run into trouble (lose job, need to take a smaller paying job) then the payments stop. If you haven't paid it back in 30 years it's written off. In many ways if you are living in the North, where wages are on average MUCH lower, then it's almost irrelevant about the final total, as it will never in all likelyhood be paid back. There is no difference in borrowing £30K or £50K if you will only ever repay £25K. If you get lucky and a really well paying job, then you'll repay it all - but you will be able to afford it, because you are earning more!
But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students (computing and computational sciences) not to be put off by people who only regurgitate the "It's a lot of money" line.
There are one or two people on here who believe everything the BBC says but not many. Best of luck in providing your antidote to the offputters.And, of course, if you run into trouble (lose job, need to take a smaller paying job) then the payments stop. If you haven't paid it back in 30 years it's written off. In many ways if you are living in the North, where wages are on average MUCH lower, then it's almost irrelevant about the final total, as it will never in all likelyhood be paid back. There is no difference in borrowing £30K or £50K if you will only ever repay £25K. If you get lucky and a really well paying job, then you'll repay it all - but you will be able to afford it, because you are earning more!
But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students (computing and computational sciences) not to be put off by people who only regurgitate the "It's a lot of money" line.
The fact is someone has to pay for it.
When you have nearly 50% of people going to uni, then asking the tax payer to pay is pretty much asking the other 50% to fund half the cost.
It is far better to leave it to market forces. Those job that need a degree education and have a shortfall, will pay atractive rates that will justfy the education cost. The McDegree courses will wither and die, as they should.
Not getting a degree isn't a bar to decent work. I wanted to go into engineering so got ONC/HNC as part of an apprenticeship. I later moved into IT and have done reasonably well, and earn a good wage. A career in IT doesn't really need a degree, what you need is the right product training/certification, and some solid experience (and some social skills would really help
)
When you have nearly 50% of people going to uni, then asking the tax payer to pay is pretty much asking the other 50% to fund half the cost.
It is far better to leave it to market forces. Those job that need a degree education and have a shortfall, will pay atractive rates that will justfy the education cost. The McDegree courses will wither and die, as they should.
Not getting a degree isn't a bar to decent work. I wanted to go into engineering so got ONC/HNC as part of an apprenticeship. I later moved into IT and have done reasonably well, and earn a good wage. A career in IT doesn't really need a degree, what you need is the right product training/certification, and some solid experience (and some social skills would really help
)Jessicus said:
Sorry Derek but you are talking a lot of scaremongering rubbish about the loans. As said the new repayments are much smaller than the previous loans system (starting at £50 a month if you are earning around £25000 a year - by comparison I'm paying out nearly £100 a month on not much more money) and it is not taken into account by loans or mortgage companies.
And, of course, if you run into trouble (lose job, need to take a smaller paying job) then the payments stop. If you haven't paid it back in 30 years it's written off. In many ways if you are living in the North, where wages are on average MUCH lower, then it's almost irrelevant about the final total, as it will never in all likelyhood be paid back. There is no difference in borrowing £30K or £50K if you will only ever repay £25K. If you get lucky and a really well paying job, then you'll repay it all - but you will be able to afford it, because you are earning more!
But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students (computing and computational sciences) not to be put off by people who only regurgitate the "It's a lot of money" line.
I'm not sure that people not being able to afford to repay them is a factor to encourage one to go for a university degree.And, of course, if you run into trouble (lose job, need to take a smaller paying job) then the payments stop. If you haven't paid it back in 30 years it's written off. In many ways if you are living in the North, where wages are on average MUCH lower, then it's almost irrelevant about the final total, as it will never in all likelyhood be paid back. There is no difference in borrowing £30K or £50K if you will only ever repay £25K. If you get lucky and a really well paying job, then you'll repay it all - but you will be able to afford it, because you are earning more!
But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students (computing and computational sciences) not to be put off by people who only regurgitate the "It's a lot of money" line.
I think you misunderstand my point.
Let us agree that it is a debt. It is a cheap debt, but it is a debt. The papers are full of complaints from degree holders that they can't get jobs in their specialities. So a degree is not the 'get into riches' card that some suggest. There is no guarantee of even higher income than the norm. So this is a debt which might stay with you for decades.
I would assume you are telling your students that they should not think of repayments as a percentage of their total income but rather as a percentage of their disposable income. That is, of course, a major difference, and one that is very real.
Is such a degree value for money. A cheap loan is a cheap loan. And you are right about many people not repaying it. But whether it is cheap for what they get is another matter. There are other options. There are other ways of gaining qualifications, and whilst you are working and gaining an income.
So what do you tell your students? Yes, it is cheap money, but you must consider the other costs of university, such as the loss of income over the three years. You might well want to buy books, accommodation, or go on trips. All this costs and if you work part time then your income, in an area where there might be thousands of students all after the same kind of jobs, might well only be enough to cover living expenses.
Do you mention the loss of seniority?
Do you tell them that the person who started three years before you might well have a distinct advantage. A degree giving acess to a particular style of business ends there. Once inside you are competing and your degree might be just so much paper. Many degrees have a short eat-by date and if you are using it as a way in to the job of your dreams then there might well be other routes, ones which will not lumber you with a debt which might be a high percentage of your disposable income over certain periods of your life.
Do you tell them that in life nothing is straightforward? That something always happens? You might fill in a spreadsheet and know that everything is OK and then it all goes wrong.
I've gone through stages in my life where I have had no spare cash. In fact I have had 18 months where I've had to live off savings despite my income being above average.
I'm old fashioned when it comes to money. I try not to get into debt. If I can't pay for it by cash at the time I want it then I try and save up for it. I've had old cars for all my life, this despite the 0% interst over 5 years that is offered as an incentive to get into debt. But it is cheap money of course. We are looking at buying a new car for the first time in our lives but our plan is to put the cash into an ISA and not touch it for the duration of the loan. Stupid idea really under modern teaching it would appear. It is a cheap loan. 0% is about as cheap as you can get. So why not splash out on a new car?
At a time when the country is, I am told, wallowing in debt, I, it seems, I am the one to be patronised with a sentances like:
"But heck, I'm just an FE lecturer in a deprived area who has researched this in detail in order to advise my students not to be put off by people who only regurgitate the "It's a lot of money" line."
Anyone who looks at the cost of a degree as just the charges is wrong. There are any number of on-costs which must be taken into consideration. The simple arithmatic of 'Oh, you will get 10% more income than the average worker' is, to use your phrase, 'rubbish'. I assume you, as an FE teacher, will agree with me on this point.
I'm 65. My experience tells me that the major problem with people is getting into too much debt. But heck, I'm just someone who has managed to stay solvent. This despite putting a major sum - to me - in an investment just before 2008. Yet I can still consider buying a new car at my age. What do I know?
I know that the best advice I received and can give is to avoid debt if you possibly can. Student loans look good on paper. They look excellent in fact. But if there is another route to your dreams, one that doesn't cost you around 70K, then I'd say give it serious consideration.
You might, when you've got a mortgage, three kids, and a social life your enjoy, find that the roof needs replacing on your house. The cost might be as much as £15,000. It is an essential. Then the car suffers a major problem. Then the repayments for the student loan, all but inconsequential in the past, suddenly become important. I had the three kids, and a fourth on the way, the roof replacement and the timing belt collapse, ruining the engine. Then after the baby my wife was taken into hospital. But I didn't have that little, inconsequential student loan. So my savings took a hit and we cancellend the holiday and went instead to the Forest of Dean - highly recommended I might add.
I'd tell my students to ask themselves what they want out of life. A degree is only a route, not the destination. Can they go about it another way, one that might well be more interesting? One that doesn't leave them in debt.
I' mention Mr Micawber.
Edited by Derek Smith on Saturday 10th March 11:16
Use Psychology said:
students shouldn't pay for their university education because society benefits from it.
(when done properly and appropriately, i.e. no st degrees, at real universities, etc.)
I consider such degrees as classics, history, English etc s(when done properly and appropriately, i.e. no s
t degrees, at real universities, etc.)t (to use your expression ) as well, especially when taken at Oxbridge colleges. They should certainly exist, but I don't think it is fair that taxpayers should have to fund them.singlecoil said:
I consider such degrees as classics, history, English etc st (to use your expression ) as well, especially when taken at Oxbridge colleges. They should certainly exist, but I don't think it is fair that taxpayers should have to fund them.
I would assume that, liek me, you feel that STEM courses should be free or at least heavily subsidised? But, as someone pointed out in a previous thread, what about fashion?t (to use your expression ) as well, especially when taken at Oxbridge colleges. They should certainly exist, but I don't think it is fair that taxpayers should have to fund them.Whilst my first response was no way, it was pointed out that it brings £millions into this country. So it is not as easy as it first appears to draw the line.
Businesses reckon that we are short of STEM graduates, that their businesses are suffering and that they have to recruit from overseas or, worst still, relocate there for the trained staff. Then charging such students large sums of money seems self defeating.
Further, these loans cost the country. It costs in the short and medium term, and will probably cost in the long term as well, although this last is not proved. So why should we subsidise course that are a bit of fluff? I don't mind my taxes supporting STEM fully, or even English and history by way of loans as I think both are important. However, some of the other courses do not make so enthusiastic that I am willing to put my hand in my pocket.
I go part time, work full time, I don't pay the fee's, the company I work for do 
If walking around campus, or speaking with my mates who went to uni is anything to go by, if they stopped spending their student loan money, or student overdraft on Dr. Dre Beats headphones or Ugg boots, they'd have less overall debt. I work full time, and even I can't afford £280 headphones.
Labour's "Education, Education, Education..." pushed people into uni who really didn't need to be, and made it appear to everyone if you're not in uni you're a nobody, that's why so many kids are going to uni nowadays, doing some two bit degree course, with asperations of waltzing into a company as senior bigknob earning megabucks day one after graduating, when in reality, they'll have a degree which is no use to anyone can't find a job because their degree is a 2:1 in Drama, they'll be working as a barista in a starbucks for a few years.
An ex of mine, went away to study performing arts, at a degree level, performing arts! Thousands of pounds worth of subsidised education to study acting like a tree in the wind. I'll always be of the opinion, that subjects like that, it's either something you're good at naturally or have been doing it since you're a child and have been in numerous plays or maybe even small parts in TV/Film or a hobby FFS, I think she wanted to become a school drama teacher, I'm not sure, but there in no way warrants degree level of education to direct some 14 year olds how to perform the musical "Grease" to some doe eyed parents, that's vocational level of training at best for that, plus all that money spent, to earn a teachers salary, of what, £30-35k?
In short, this "debt" even though how it's called a debt when you're not paying back until you earn over a certain ammount, and it's written off after so many years, and if you emigrate it isn't chased up, deters people from doing certain degree's I'm all for it. People see the figures like £50k, or £70k and just scaremonger with them.
If walking around campus, or speaking with my mates who went to uni is anything to go by, if they stopped spending their student loan money, or student overdraft on Dr. Dre Beats headphones or Ugg boots, they'd have less overall debt. I work full time, and even I can't afford £280 headphones.Labour's "Education, Education, Education..." pushed people into uni who really didn't need to be, and made it appear to everyone if you're not in uni you're a nobody, that's why so many kids are going to uni nowadays, doing some two bit degree course, with asperations of waltzing into a company as senior bigknob earning megabucks day one after graduating, when in reality, they'll have a degree which is no use to anyone can't find a job because their degree is a 2:1 in Drama, they'll be working as a barista in a starbucks for a few years.
An ex of mine, went away to study performing arts, at a degree level, performing arts! Thousands of pounds worth of subsidised education to study acting like a tree in the wind. I'll always be of the opinion, that subjects like that, it's either something you're good at naturally or have been doing it since you're a child and have been in numerous plays or maybe even small parts in TV/Film or a hobby FFS, I think she wanted to become a school drama teacher, I'm not sure, but there in no way warrants degree level of education to direct some 14 year olds how to perform the musical "Grease" to some doe eyed parents, that's vocational level of training at best for that, plus all that money spent, to earn a teachers salary, of what, £30-35k?
In short, this "debt" even though how it's called a debt when you're not paying back until you earn over a certain ammount, and it's written off after so many years, and if you emigrate it isn't chased up, deters people from doing certain degree's I'm all for it. People see the figures like £50k, or £70k and just scaremonger with them.
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