Labour to cut Tuition Fees...
Discussion
The numbers going to Uni shows that the present system is a success. The lefty media managed to scare a few off with the 'debt around your head' nonsense for a while, but kids soon worked out it was just a free toss of the dice. We just need more protection for the taxpayer so more is repaid - EU students are a real problem.
Typical meddling Labour, no ideas and no idea.
Typical meddling Labour, no ideas and no idea.
Welshbeef said:
brickwall said:
The maths is crazily complex. Under the Labour scheme:
- Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
Firstly I totally disagree with the labour solution. - Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
Edited by brickwall on Saturday 28th February 15:52
However I would say currently or under the labour solution the tax payer will be taking on the burden of the debt.
My solution no fees at all - but you have to pass a proper entry exam-- and have only courses like "Star Treck" or Klingon etc not funded/student pays and has to fund that themselves no with no Govt help.
We need to invest in the countries future infrastructure and also our children's future.
1. It benefits the wrong people - high-earning graduates (who, by virtue of being high-earning, are the last of our young people who need a leg-up)
2. If you're going to raise £3bn from taxes, successful graduates are the wrong place to spend it. Apprenticeships and childcare would make a much bigger difference to our economy in both the short and long term.
3. The raise to interest rates to high-earning graduates presents a structural threat to the whole student loan system; if the Russell Group decide to compete with the government and offer loans to their own students (a real risk if the interest rates on government loans get too high), then the whole system comes crashing down.
Nonetheless, I think any one set of decision makers (and especially politicians, the civil service, and universities themselves) cannot, and should not, dictate what is and is not a 'worthy' university course. I disagree with free courses because most of the benefits accrue to the student, but the cost is borne by general taxation. (I find it absurd that hard-working families should subsidise students so they can get a highly-paid job; those who take the benefit should pay the cost).
If students have to pay, they have a vested interest not to choose unworthy degrees - and the market is best placed to decide what course are, and are not worthy.
From the perspective of a Scottish student, I think university education should be free. However what's happened up here is that anyone who doesn't want an apprenticeship and doesn't want to enter a job right away just goes to uni: it's free and you get to mess around for another 4 years. There are countless people from my year at school who got 1 C in exams, got in to uni and have graduated to work in retail: had they walked into the same job 4 years earlier and got their head down, who knows where they could be now. Example from Derek is a perfect example of what happens if you work hard and don't go to uni.
The other problem free tuition has bred is students who feel no need to work throughout uni: taking a £5k student loan every year to fund their lifestyle is fine because they graduate in 'only' £20k of debt. So people leave school a literally scrape by for 4 years, wasting tax-payers' money. What university should be, is about people who need a degree to further themselves in the career they choose e.g. aspiring lawyer, engineer, doctor etc. Not for people who want to study international fashion business then work on the till in Hollister.
Problem is, solutions are difficult. Easy answer is upping entry requirements to limit the number of students, but of course there would be outcry from people who thought they could fall into university and the obvious effect on university incomes. I always find myself leading back to tuition fees: discourage people from wasting their time by charging them money for it. Along with a more robust system of repayment, maybe we'd have a fix. I read a recent article about how law firms have noticed first year students taking a much more keen interest over the last few years in employability: perhaps this is an effect of the raised fees motivating them to do well...
The other problem free tuition has bred is students who feel no need to work throughout uni: taking a £5k student loan every year to fund their lifestyle is fine because they graduate in 'only' £20k of debt. So people leave school a literally scrape by for 4 years, wasting tax-payers' money. What university should be, is about people who need a degree to further themselves in the career they choose e.g. aspiring lawyer, engineer, doctor etc. Not for people who want to study international fashion business then work on the till in Hollister.
Problem is, solutions are difficult. Easy answer is upping entry requirements to limit the number of students, but of course there would be outcry from people who thought they could fall into university and the obvious effect on university incomes. I always find myself leading back to tuition fees: discourage people from wasting their time by charging them money for it. Along with a more robust system of repayment, maybe we'd have a fix. I read a recent article about how law firms have noticed first year students taking a much more keen interest over the last few years in employability: perhaps this is an effect of the raised fees motivating them to do well...
Derek Smith said:
....
It costs more. It costs me more as my taxes pay for the shortfall. If that is the job that it was designed to do, then that's what it has done to perfection.
If you want to look back into the original thread, I predicted that it was cost more, and put in an explanation. I was largely derided, the suggestion being I was some lefty because I wanted STEM degrees funded. The only place where I was wrong was in predicting the amount of the shortfall.
I doubt anyone would be shocked at politicians managing to make a new policy more expensive to implement than something it replaces....or even have unintended consequences.It costs more. It costs me more as my taxes pay for the shortfall. If that is the job that it was designed to do, then that's what it has done to perfection.
If you want to look back into the original thread, I predicted that it was cost more, and put in an explanation. I was largely derided, the suggestion being I was some lefty because I wanted STEM degrees funded. The only place where I was wrong was in predicting the amount of the shortfall.
I cannot see Mr Milliband's latest brain wave improving that particular situation either.
In general I tend to agree with you wrt STEM degrees. Fund only those and have selection based purely on ability and I'd be OK with it to a point. Though that has to be taken in the context of the country's finances in general. Perhaps making non-STEM increasingly unattractive (unless someone is absolutely committed) might work
Murph7355 said:
Derek Smith said:
....
It costs more. It costs me more as my taxes pay for the shortfall. If that is the job that it was designed to do, then that's what it has done to perfection.
If you want to look back into the original thread, I predicted that it was cost more, and put in an explanation. I was largely derided, the suggestion being I was some lefty because I wanted STEM degrees funded. The only place where I was wrong was in predicting the amount of the shortfall.
I doubt anyone would be shocked at politicians managing to make a new policy more expensive to implement than something it replaces....or even have unintended consequences.It costs more. It costs me more as my taxes pay for the shortfall. If that is the job that it was designed to do, then that's what it has done to perfection.
If you want to look back into the original thread, I predicted that it was cost more, and put in an explanation. I was largely derided, the suggestion being I was some lefty because I wanted STEM degrees funded. The only place where I was wrong was in predicting the amount of the shortfall.
I cannot see Mr Milliband's latest brain wave improving that particular situation either.
In general I tend to agree with you wrt STEM degrees. Fund only those and have selection based purely on ability and I'd be OK with it to a point. Though that has to be taken in the context of the country's finances in general. Perhaps making non-STEM increasingly unattractive (unless someone is absolutely committed) might work
Twin1 said:
I always find myself leading back to tuition fees: discourage people from wasting their time by charging them money for it. Along with a more robust system of repayment, maybe we'd have a fix.
That's thee key bit though isn't it, the repayment system. The current levels were sold on the lines that you don't repay much, if anything, until you're earning good money, so it's more of an extra tax for lots of people rather than a debt that gets repaid.I can't see anyone offering a system that discourages people wasting the loans on pissing around with pointless courses because that means setting a repayment level low enough to significantly affect people that 'graduate' into relatively low paid jobs.
It would need to be something like 10% repayment at £15k income to really be a deterrent. Imagine the outcry!
brickwall said:
The maths is crazily complex. Under the Labour scheme:
- Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
I disagree that high earners will be the winners. Their pension tax relief will be reduced from 45% to 20%. This will far outweigh any savings that they make in the reduced tuition fees.- Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
Edited by brickwall on Saturday 28th February 15:52
A three year course = £27000, Labour cost = £18000 (£9000 saved over 30 years assuming 0% interest rate)
£100000pa earner can put £15000 towards pension (45% of £15000 = £6750, 20% of £15000 = £3000) Labour cost = £3750 per year
In three years, the high earner's lost tax relief is more that the total saving of their tuition fees.
Does my man-maths make sense?
Note: I disagree with high earners being able to get high rate tax relief, but that is another argument.
pingu393 said:
brickwall said:
The maths is crazily complex. Under the Labour scheme:
- Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
I disagree that high earners will be the winners. Their pension tax relief will be reduced from 45% to 20%. This will far outweigh any savings that they make in the reduced tuition fees.- Graduates will continue to pay off their loan with repayments of 9% of gross income above £21k. (I.e. If you earn £22k, you pay £90 a year, or £7.50 a month)
- The change in the debt graduates leave university with therefore only affects how long a graduate makes repayments for, not the monthly amount of those repayments
- However, like the current scheme, any remaining debt is wiped off after 30 years. At present, the government expects only 60% of male graduates and 20% of female graduates will pay off their full debt within the 30-year window. Overall, the government expects to wipe off some ~45% of the total student debt.
- When you lower the debt per student, this means more students will pay of their debt within the 30 years. But a lot still won't - they don't benefit under this scheme.
- The government will face a lower debt write-off cost, but a much higher cost in providing lump sums to universities.
In short - who benefits: High-earning graduates.
Who faces no change: Lower-earning graduates. Lots of women (very few of those who take a career break or go part time repay their loan within the 30 year window).
Who loses: The taxpayer funding this (see pensions discussion above).
Edited by brickwall on Saturday 28th February 15:52
A three year course = £27000, Labour cost = £18000 (£9000 saved over 30 years assuming 0% interest rate)
£100000pa earner can put £15000 towards pension (45% of £15000 = £6750, 20% of £15000 = £3000) Labour cost = £3750 per year
In three years, the high earner's lost tax relief is more that the total saving of their tuition fees.
Does my man-maths make sense?
In that sense you're right - graduates earning £150k will be worse off under this scheme. They're the very high earners - likely to be in the top 5% of the graduate lifetime income distribution. People below that, say those earning £90k, are better off. They're hardly the needy poor.
Graduates in the bottom ~40% of the lifetime income distribution don't benefit, because they wouldn't pay off the loan under either scheme.
davepoth said:
...to a maximum of £6000. They will fund this by canceling a corporation tax cut, and by charging extra interest to the highest earning graduates.
Thoughts?
Seems to me all party's do something for joe blogs to go yeah.Thoughts?
Everyone wants stuff for free, seems a general view on life in Britain now.
But we can't afford it, no one wants to here that.
I didn't go to university, approx 20-30 people I know did. Only 3 or 4 earn better money than me, seems to be a lot of courses that don't really matter when looking for a job.
Ilovejapcrap said:
davepoth said:
...to a maximum of £6000. They will fund this by canceling a corporation tax cut, and by charging extra interest to the highest earning graduates.
Thoughts?
Seems to me all party's do something for joe blogs to go yeah.Thoughts?
Everyone wants stuff for free, seems a general view on life in Britain now.
But we can't afford it, no one wants to here that.
I didn't go to university, approx 20-30 people I know did. Only 3 or 4 earn better money than me, seems to be a lot of courses that don't really matter when looking for a job.
Not that a degree always equates to that, as most people I know with degrees are teachers and that's a job I'd never consider doing!
SpeedMattersNot said:
Ilovejapcrap said:
davepoth said:
...to a maximum of £6000. They will fund this by canceling a corporation tax cut, and by charging extra interest to the highest earning graduates.
Thoughts?
Seems to me all party's do something for joe blogs to go yeah.Thoughts?
Everyone wants stuff for free, seems a general view on life in Britain now.
But we can't afford it, no one wants to here that.
I didn't go to university, approx 20-30 people I know did. Only 3 or 4 earn better money than me, seems to be a lot of courses that don't really matter when looking for a job.
Not that a degree always equates to that, as most people I know with degrees are teachers and that's a job I'd never consider doing!
Remeber those who can't teach
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