Student Debt

[grizzly bear]

http://www.telegraph.co.uk/education/educationnews/7733841/Graduate-debts-could-rise-to-40000-under-Russell-Group-plan.html

Its already hard to save for a deposit, would be hard if graduates landed wtih £40,000 debt before they start work... if they get a job!

[South Lorne]

http://www.telegraph.co.uk/education/educationnews/7733841/Graduate-debts-could-rise-to-40000-under-Russell-Group-plan.html

Its already hard to save for a deposit, would be hard if graduates landed wtih £40,000 debt before they start work... if they get a job!

...first things first...let's focus on creating jobs for them ...or like Detroit... houses will be a quarter of the fees quoted....

[LJAR]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich". I would be fully behind making universities self funding.

It would certainly focus the mind of anyone going to Uni to make sure it was worth it!

Housing wise, it would certainly be a dampener long term. Since having to pay back a student loan is like another 10% on your marginal tax rate, people will be taking home less for longer.

[South Lorne]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich". I would be fully behind making universities self funding.

It would certainly focus the mind of anyone going to Uni to make sure it was worth it!

Housing wise, it would certainly be a dampener long term. Since having to pay back a student loan is like another 10% on your marginal tax rate, people will be taking home less for longer.

...except in Scotland.....

[dissident junk]

Student debt is a time bomb -- it will affect consumer demand, housing costs and values, tax take and politics for the next thirty years.

It is ripping disposable earnings out of the future at an alarming rate and that will have a huge impact on the British economy in the future. As I keep banging on, you can't buy a washing machine and fridge in 2020 if you spent that money on an ipod nano in 2009 or you won't have the deposit for a house or the ability to service a mortgage debt if you are still paying off the cost of renting a room ten years ago.

Government and universities have to come together and find a way for higher education to become more acceptably financially modeled for students so they can avoid borrowing so much from their own futures. I think the three year full-time model is going to need to become an "option", rather than the rule, and we should introduce models where students complete and accrue units separately over time, take years separately, take condensed courses, that sort of thing.

I think government, universities and schools also need to be honest with students and make them aware that some courses and subjects do not deliver increased earnings over the average wage and may, indeed, result in jobs that pay less.

Put it this way, something like a quarter of all graduates who took student loans out before 1997 still haven't paid them off. These people will now be in their early 30s, prime house buying/family starting territory, and they still have loans hanging over them, eating into their income for something they did over fifteen years ago. And those loans back then were small (£6k or so) because government still paid tuition fees and some maintenance grants.

God help graduates today. They are still going to be paying off their loans when they are in their 40s.

[fleabittenmoggie]

Funny this should come up.

I got my student loan statement in the post today. Its now up to nearly £11k.

I made my first ever payment last month and depending on interest rates its probably going take me 50 years to pay back at this rate.

God knows how the interest is 'really' calculated cos my statements bear no relation to any logic at all (huge variations in the figure added each month)

[Brave New World]

Yet another symptom of the Labour debt is good drive.

Having been the first year to get the new loan system we were told about it at the end of lower six form, in fact sold it as being natural and the interest on it would be non existant.

I pay £115 a month direct from my wages, last couple of years and circa £50 from a year after graduating. I started with a £13k debt. I have still got to pay another £8200 keft to pay after 9 years.

It is yet another tax of 2-4% for piece of mass printed degree tat (in the large part) when everyone else has them.

It is just one more drain on joe blows attempts to get on the ladder.

[RufflesTheGuineaPig]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich". I would be fully behind making universities self funding.

It would certainly focus the mind of anyone going to Uni to make sure it was worth it!

What we need is state funded universities with entrance based ENTIRELY on mental ability with only the top 10% able to attend.

Bring back the poly's with courses in plumbing, plastering, mining etc for everyone else.

[The Masked Tulip]

Not good for student BTLs which, I suspect, the majority of BTLs are.

[Cogs]

What we need is state funded universities with entrance based ENTIRELY on mental ability with only the top 10% able to attend.

Bring back the poly's with courses in plumbing, plastering, mining etc for everyone else.

Do you believe the rest of the world is wrong as well though? We'd have fewer graduates than Turkey and Mexico for example. Do we live in the sort of country that needs fewer graduates than Turkey and Mexico? Serious question.

Edited May 17, 2010 by Cogs

[grizzly bear]

I guess its ok to have student debt if you get a good job, or if you can live with parents rent free whilst you save but I bet lots of graduates don't get that great job and many don't have the option of living rent free etc.

Paying back £40k of student debt is going to take a long time for all but the best paid graduates.

[Dorkins]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich".

So your ideal system would be:

1. Wealthy professionals (doctors, lawyers etc) earn enough to send their kids to university.

2. Kids become wealthy professionals who can afford to send their kids to university. Go to step 1.

While everybody else tugs the forelock and pays the doctor/lawyer his shilling.

Something like that?

[Cicero]

What we need is state funded universities with entrance based ENTIRELY on mental ability with only the top 10% able to attend.

Bring back the poly's with courses in plumbing, plastering, mining etc for everyone else.

Would the public support a return to elitism?

[bazzer]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich". I would be fully behind making universities self funding.

you could say that about anything though. I don't go to the doctor anywhere near as much as my g/f seems to do. Am I being "robbed"? How will charging for university encourage the poor to go? I agree the current funding state is problematic, but I feel this has been brought about by the amount of ridiculous non-courses that the universities offer, and the tax payers pay for.

[Goat]

State funding of universities is simply robbing those who don't go to them to pay for those who do, or "robbing the poor to pay the rich". I would be fully behind making universities self funding.

The idea that the poor are paying for the rich is a total nonsense - it's the other way around.

Your factory worker earning £15,000 pays ITRO £2,750 tax + NIC per annum, in return for which he gets free NHS/education/pension/policing etc plus the opportunity to send kids to uni if they get good grades.

Meanwhile your factory manager earning £50,000 pays roughly £14,000 p/a tax + NIC and gets the exact same as the worker.

Admittedly the managers kids are more likely to go to uni but it should be obvious that it is tne manager who is funding it and not the worker.

It's a case of the rich getting a little bit back rather than the poor getting everything.

[Concrete Jungle]

I guess its ok to have student debt if you get a good job, or if you can live with parents rent free whilst you save but I bet lots of graduates don't get that great job and many don't have the option of living rent free etc.

Paying back £40k of student debt is going to take a long time for all but the best paid graduates.

I know a few in that boat +£20k student debt, £4-10k on credit cards, £2.25-4.5k overdraft, £10-22k loan for car etc with jobs currently paying £15k - £18k. Add on rent, bills and food and they have sweet FA left every month and pretty much sweet FA to show for it all. I never really got my head around buying a car on finance / loan (once I had grown up a bit). You buy something that is very expensive probably second behind buying a home for the majority of people. It then takes money off you in the form of expensive fuel, servicing, repairs, maintenance, tax and insurance. Then on top of all that you are charged interest for the privilege, but then again I suppose you could say that about houses.

[Guest DissipatedYouthIsValuable]

Student loans? This is why I think houses of the future are worth FA.

[Dorkins]

The idea that the poor are paying for the rich is a total nonsense - it's the other way around.

Your factory worker earning £15,000 pays ITRO £2,750 tax + NIC per annum, in return for which he gets free NHS/education/pension/policing etc plus the opportunity to send kids to uni if they get good grades.

Meanwhile your factory manager earning £50,000 pays roughly £14,000 p/a tax + NIC and gets the exact same as the worker.

Admittedly the managers kids are more likely to go to uni but it should be obvious that it is tne manager who is funding it and not the worker.

It's a case of the rich getting a little bit back rather than the poor getting everything.

But the factory manager has a few BTLs which he rents out to factory workers for more than his mortgage repayments. I know who's getting the better deal overall.

[RufflesTheGuineaPig]

Do you believe the rest of the world is wrong as well though? We'd have fewer graduates than Turkey and Mexico for example. Do we live in the sort of country that needs fewer graduates than Turkey and Mexico? Serious question.

The percentage of people with degrees is irrelevant if they degrees themselves are toilet paper. The degree should enable the best to distinguish themselves.

We don't need "graduates" we need people who can work.

If all you want is graduates just hand out degrees to everyone who gets move than 4 gcse grade Cs and be done with it.

Would the public support a return to elitism?

Elitism is the wrong word. It makes people think of a rich elite going to university and everyone else being resigned to serfdom.

The aim should be to ensure the best and brightest get the best possible education for the best interests of the country... regardless of wealth.

Put simply, if you send everyone to university, than half of the people with a degree will be below average intelligence.

All that's happened is everyone runs up huge debts, and instead of "having a degree" being the denominator to spot the brightest, it's have a first.

[Sparkey]

Do you believe the rest of the world is wrong as well though? We'd have fewer graduates than Turkey and Mexico for example. Do we live in the sort of country that needs fewer graduates than Turkey and Mexico? Serious question.

How many gambling studies or hairdressing graduates do you see in Turkey and Mexico ?

The problem lies with Labours pledge to get everyone into university. Lots of people are studying crappy degrees that are not worth the paper they're written on. How about keeping universities for ACADEMIC courses only (science, engineering, proper arts and humanities), and scrap all the non-courses (hairdressing/gambling studies / drama with cooking etc..) . Only the brightest people should attend university and they should be state funded; not every idiot that wants to do a crappy course because they get guaranteed a 1st or 2.1 just for turning up. There are dozens of vocational courses for other people to do at a local level instead.

Who knows .... if they did that, maybe a university education would be worth something.

[hibbs]

I wonder how many people will never pay off their student loans. I graduated in 2007 with 13k of student debt at the rate I'm paying it off at the moment it will take me around 90 years to pay off and that's without interest being added to it. If I had 40k of debt that would take me nearer to 300 years to pay off. Whilst at uni we were told we would be able to go straight into 20k a year jobs, only two of my friends managed that, quite a few ended up going back home and working in jobs that they used to do part time before they got their degrees making it a complete waste of time.

Edited May 18, 2010 by hibbs

[dissident junk]

Funny this should come up.

I got my student loan statement in the post today. Its now up to nearly £11k.

I made my first ever payment last month and depending on interest rates its probably going take me 50 years to pay back at this rate.

God knows how the interest is 'really' calculated cos my statements bear no relation to any logic at all (huge variations in the figure added each month)

My view on this?

Set up a rigorous plan and pay it off ASAP by paying far over and above minimum payments (check to see if you get penalised for early payments though). When you are young, you can live with a student lifestyle hangover (hardships, sharing houses, tight budgets and rubbish clothes), but once you get over 30, having student debt still hanging over you, little disposable income and still living as though you are a student starts to seriously get you down.

My twenties were very strange (and very low-paid), and I ended up getting to 30 with almost all my student debt still hanging over my head, so I spent two/three years living like Hettie Green (spending nothing over basic liabilities) and sold everything I owned that I didn't need on a daily basis to just exist. I liquidated everything I could and am now in a position where my last payment will be made next month and I will clear the outstanding debt (I did, however, keep the debt for a few years as my pre-97 deal meant the IRs payable on it were less than saving the money in an account).

The thing I want to say is that, at 30/31/32/33, I had got to the age where I was no longer young enough to live in such constrained circumstances that finally repaying the debt off required. While living extremely frugally when you are young can be a lifestyle you can deal with; by the time you get over 30, it just feels like poverty -- and do not underestimate the impact of such constrained circumstances upon the way you might feel about yourself at that age. I also didn't want to pay the debt through minimum payments over the long term and accrue even more interest; smaller monthly slices over a long time can be just as limiting in some respects as going Hettie for a few years and ultimately costs you more.

I guess I just wanted to broach the idea that sometimes younger people think everything is going to work out. And that, sometimes, it just doesn't, and the result is something far harder than you can imagine.

[samwise]

I know a few in that boat +£20k student debt, £4-10k on credit cards, £2.25-4.5k overdraft, £10-22k loan for car etc with jobs currently paying £15k - £18k. Add on rent, bills and food and they have sweet FA left every month and pretty much sweet FA to show for it all. I never really got my head around buying a car on finance / loan (once I had grown up a bit). You buy something that is very expensive probably second behind buying a home for the majority of people. It then takes money off you in the form of expensive fuel, servicing, repairs, maintenance, tax and insurance. Then on top of all that you are charged interest for the privilege, but then again I suppose you could say that about houses.

With those debts, how did they even qualify for a loan for the car?? Heck, I'm 38 and I think that the most modern vehicle I've ever owned was 5 years old when I bought it (current car is 11 years old, motorbike is 7 years old).

[OnlyMe]

Move abroad and stick two fingers up to your student debt (if you have arranged it right).

Never mind the housing market, with debts round their necks from the start new startups, consumption, investment, pensions etc - all ******ed.

[Maggot_with_halitosis]

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