Student Debt......they Will Be Made To Pay

[crashmonitor]

you need a three year degree course just to be a nurse. read it in the local paper yesterday.

The course is heavy on IT the paper reports.

we are going to the dogs in a society built on entitlement and beaverisation.

I wonder what proportion of University debt will be paid back by public sector salaries. The majority I would think, since these are the only jobs with the longevity and above average pay to see the loan's demise. So we are creating public debt that needs to repaid out of further public sector commitments. It looks like a recipe for National Bankruptcy as with every other area of the public sector budget.

Edited June 14, 2013 by crashmonitor

[Bloo Loo]

I wonder what proportion of University debt will be paid back by public sector salaries. The majority I would think, since these are the only jobs with the longevity and above average pay to see the loan's demise. So we are creating public debt that needs to repaid out of further public sector commitments. It looks like a recipe for National Bankruptcy as with every other area of the public sector budget.

the paper reported nursing salaries from 14K rising to 23K in our area.

It was one of those career articles, explaining what the job is, how to get it and why people do it.

[winkie]

you need a three year degree course just to be a nurse. read it in the local paper yesterday.

The course is heavy on IT the paper reports.

we are going to the dogs in a society built on entitlement and beaverisation.

This makes me mad ........ we are crying out for good compassionate nurses, care workers and excellent passionate teachers but the education system has become a money making entity for feathering the likes of some own nests........they have already talked about ex army personnel being allowed to study for less cost and time so that their skills and competences can be used for the benefit of others.

We should be offering and encouraging study and making it easier and cheaper for people to do the work they will be good at........when people are not working travelling every day and paying high fees to study for the educators benefit not the communities benefit is the wrong way of doing it.

You can easily tell if a student or an older person who would like to change career direction will make the grade and has the talents and ability to achieve their ambition......too much bureaucracy is stunting growth, too many people in it for their own needs, to keep their salaries inflated not the future needs of this country.

[billybong]

The treasury are starting to realise that much of the annual £3 billion in tuition fees loans will be written off. So they will decrease the income threshold that triggers repayment

When that sort of reversal happens to an investment the word often used to describe what's happened is "whipsawed".

[The Knimbies who say No]

Student loans are like no other form of personal debt. They are much larger than any other loan that an 18 year old would ever be offered. They are not secured on an asset which could be sold to clear the debt. They are index-linked so cannot be inflated away. You cannot default on them even if you declare bankruptcy, and an Act of Parliament was used to give the loans this property. Repayments are compulsorily collected directly from your paypacket.

If these terms were written into a the terms of a consumer loan by a private entity, it would be against the law. Since it's the government they can make whatever rules they like, and they can change them by Act of Parliament if they want. The fact that the government is also the creditor to these loans creates just a teeny tiny conflict of interest.

I think it's important to bear these points in mind when talking about obligations. The fact that the government is also shafting exactly the same young people via the housing market is just the icing on the cake.

Precisely.

Plenty of people here were suggesting that there would be no way that a graduate on even a pretty tasty above-average salary would clear £50k of index-linked debt paid at a 9% fraction of salary over the £21k threshold.

£50k debt, if RPI is 3%, repayment rate is 6% and that is £3k just to stand still. £3k being 9% of earnings above £21k, means £54k gross just to tread water, straight out of college.

So in effect, it's a life of debt slavery, with the Government having (for some) an ever increasing claim on future labour output.

You could imagine the scenario some women may find themselves in:

£50k debt, RPI+3% linked, a few years of under-threshold earnings then children, no other threshold-paying work for 20 years say.

Could easily be over £250k debt to Govt. That'll be paid back.

Some people could hit the 65 owing well over half a million, dependent on inflation.

And all these people will of course be buying a £160k house no probs.

Tragic. And to think these 'assets' are doubtless being used to help keep the UK looking solvent, perhaps increasingly so as the balances owed swell. until they have to be written off.

edit typos

Edited June 14, 2013 by cheeznbreed

[Bloo Loo]

This makes me mad ........ we are crying out for good compassionate nurses, care workers and excellent passionate teachers but the education system has become a money making entity for feathering the likes of some own nests........they have already talked about ex army personnel being allowed to study for less cost and time so that their skills and competences can be used for the benefit of others.

We should be offering and encouraging study and making it easier and cheaper for people to do the work they will be good at........when people are not working travelling every day and paying high fees to study for the educators benefit not the communities benefit is the wrong way of doing it.

You can easily tell if a student or an older person who would like to change career direction will make the grade and has the talents and ability to achieve their ambition......too much bureaucracy is stunting growth, too many people in it for their own needs, to keep their salaries inflated not the future needs of this country.

yes, its called "beaverisation".

dams are installed along various career paths so those that do get the "qualies" are protected. Its wrong, and it supports a very poor education system by needing more and more people to get given the knowledge, therefore needing more and more knowledge centres ( Unis)

I dont have a problem with Higher Education per se, but really...does a nurse need to spend 3 years on a course "heavy in IT"?

I want my nurse to be able to help me in a time of need, to dispense suppositories, to help the recovering, to be knowledgeable in a practical way about MY condition.

There is a massive tendancy to dispense care these days via tick box....when a patient needs what they need to get better, they dont need a nurse to be concerned about x other things that have no relevence, but the tick boxes must be filled in regardless.

This benefits no-one.

And before you say that these all round forms ensure nothing is missed....think about when you had a speed-dial phone...can you remember the number from another phone?....the tick box takes away the power of the individual.

oh, and bring back Matron....

[VeryMeanReversion]

I emigrated to the U.S. for work when I was 24. If these rules were around then, I would only have come back when the debt was written off. (50K debt can easily get to 250K over 30 years, even at low RPI rates)

Other possibilities :

1 - use salary sacrifice and hope you can pull the money out when you are 55. New drawdown schemes allow massive (taxed) lump sum removal and no liability to repay the student loan. Could go abroad for a couple of years to pull the money out tax-free. Of course, you live in a tent for 30+ years and cross your fingers.

2 - No PAYE, be your own company. Choose your salary draw to stay under the limit and pull the rest out when the student loan is written off. Marry someone without a degree and pay all the divi's out that way.

3 - Work in the black market. Not much point having a degree for that though.

4 - Use on-line degree courses from foreign universities. Get some work experience whilst doing it.

5 - Start your degree at the age when they are automatically written off. I know one guy who started his PhD in his 80's (and lived to finish it)

6 - When applying for a job, claim you have a degree when you don't. None of my employers have ever checked. Combine with option 4 if you like.

For the legal options above, if Google/Amazon/etc can do it, when can't the rest of us. It's legal avoidance rather than evasion.

[Bloo Loo]

Precisely.

Plenty of people here were suggesting that there would be no way that a graduate on even a pretty tasty above-average salary would clear £50k of index-linked debt paid at a 9% fraction of salary over the £21k threshold.

£50k debt, if RPI is 3%, repayment rate is 6% and that is £3 just to stand still. £3 being 9% of earnings above £21k, means £54k gross just to tread water.

So in effect, it's a life of debt slavery, with the Government having (for some) an ever increasing claim on future labour output.

You could imagine the scenario some women may find themselves in:

£50k debt, RPI+3% linked, a few years of under-threshold earnings then children, no other threshold-paying work for 20 years say.

Could easily be over £250k debt to Govt. That'll be paid back.

Some people could hit the 65 owing well over half a million, dependent on inflation.

And all these people will of course be buying a £160k house no probs.

Tragic. And to think these 'assets' are doubtless being used to help keep the UK looking solvent.

of course, only the odd one or two courses would cost £9k.

[fluffy666]

I wonder what proportion of University debt will be paid back by public sector salaries. The majority I would think, since these are the only jobs with the longevity and above average pay to see the loan's demise. So we are creating public debt that needs to repaid out of further public sector commitments. It looks like a recipe for National Bankruptcy as with every other area of the public sector budget.

There are also the protected professions - doctor, lawyer, the city(some), etc. Which will mainly be inhabited by kids whose parents didn't let them take the loans.

Also..

From what I can gather, repayments are 9% of income over £21k. Problem is, with a representative debt of £40k and 3% inflation, so 6% interest (The current IR is 6.6%.), you need to pay £2400 a year just to keep the balance flat. That equates to a take-home of £47k.

You'd need to hit perhaps £60k a year to make a noticeable dent, and even then you'd need to reach that wage within a few years of graduating. Basically, in the 'decent' wage bracket (£25-50k) you now have an additional 9% tax rate till the age of 55.

Those who earn 6-figure salaries will pay their loan off quickly and at a much lower interest cost; on £150k you'd pay it off in 3-4 years. So it stays with current tax policy - spare the rich and hammer the middle.

[R K]

Tory rentiers stealing from kids to finance their property developer chums in the South East.

It's incredible most young people haven't rioted.

Nick Clegg has bent them all over and is b*ggering them for all he's worth.

[Bloo Loo]

There are also the protected professions - doctor, lawyer, the city(some), etc. Which will mainly be inhabited by kids whose parents didn't let them take the loans.

Also..

From what I can gather, repayments are 9% of income over £21k. Problem is, with a representative debt of £40k and 3% inflation, so 6% interest (The current IR is 6.6%.), you need to pay £2400 a year just to keep the balance flat. That equates to a take-home of £47k.

You'd need to hit perhaps £60k a year to make a noticeable dent, and even then you'd need to reach that wage within a few years of graduating. Basically, in the 'decent' wage bracket (£25-50k) you now have an additional 9% tax rate till the age of 55.

Those who earn 6-figure salaries will pay their loan off quickly and at a much lower interest cost; on £150k you'd pay it off in 3-4 years. So it stays with current tax policy - spare the rich and hammer the middle.

I thought I read somewhere that current student debt isnt written off automatically these days.

And going Bankrupt doesnt help either...

Ok I was wrong, but its a fracking mess....as you would expect:

The criteria where your student loan is automatically cancelled depends on when you took out your first student loan.

If you took out your loan in England or Wales on or after 1st September 2012 your student loan is automatically cancelled 30 years after you become eligible to repay. If you took out your loan in England or Wales before 1st September 2012

and you:

• took out your first student loan in or before academic year 2005/06, then it will be cancelled when you turn 65; or
• took out your first student loan in or after academic year 2006/07, then it will be cancelled 25 years after you became eligible to repay

I expect the thing to return to retirement age soon.

Edited June 14, 2013 by Bloo Loo

[easy2012]

Tory rentiers stealing from kids to finance their property developer chums in the South East.

It's incredible most young people haven't rioted.

Nick Clegg has bent them all over and is b*ggering them for all he's worth.

Corrected. Just rentier will do and they come in all sort of pin and stripes.

Basically we have sufficient technology to produce the basic for everyone - it is how these stuffs are shared out that is the contention at the moment.

The Asian use the concept of filial piety to make sure the old are taken care off, the west used properties and debt so the next generation will continue to work when the previous generation goes old. A lot of things cannot be 'saved up' and services cannot be 'saved up' at all and someone needs to do work (robot preferably...but robots still need designing and servicing)...then tada... the people of working age/the graduates are there to do the right things.

Edited June 14, 2013 by easy2012

[crashmonitor]

of course, only the odd one or two courses would cost £9k.

Including my nieces 9k per year Human Geography degree. Should prove a useful investment and reservoir of knowledge for UK plc in three years time.

Edited June 14, 2013 by crashmonitor

[crashmonitor]

Corrected. Just Rentier will do and they come in all sort of pin and stripes.

........... the Blairs who not only went big on education but went big on property too.

Edited June 14, 2013 by crashmonitor

[fluffy666]

Precisely.

Plenty of people here were suggesting that there would be no way that a graduate on even a pretty tasty above-average salary would clear £50k of index-linked debt paid at a 9% fraction of salary over the £21k threshold.

£50k debt, if RPI is 3%, repayment rate is 6% and that is £3 just to stand still. £3 being 9% of earnings above £21k, means £54k gross just to tread water.

So in effect, it's a life of debt slavery, with the Government having (for some) an ever increasing claim on future labour output.

You could imagine the scenario some women may find themselves in:

£50k debt, RPI+3% linked, a few years of under-threshold earnings then children, no other threshold-paying work for 20 years say.

Could easily be over £250k debt to Govt. That'll be paid back.

Some people could hit the 65 owing well over half a million, dependent on inflation.

And all these people will of course be buying a £160k house no probs.

Tragic. And to think these 'assets' are doubtless being used to help keep the UK looking solvent.

I'm glad someone else got similar numbers.

I wonder if any of the politicians bothered, or realized that the vast majority of people with these loans will never make a dent in the balance.

[Bloo Loo]

Including my nieces 9k per year Human Geography degree. Should prove a useful investment and reservoir of knowledge for UK plc in three years time.

friend of ours son took one of these...did a higher degree in eco landscaping....got a job no problem in an eco power company.

My friend has spent, well, minutes at least explaining to me what he does for his crust....nothing that an experienced nurseryman couldnt do it seems to me.

[PopGun]

Corrected. Just rentier will do and they come in all sort of pin and stripes.

Basically we have sufficient technology to produce the basic for everyone

and then some

it is how these stuffs are shared out that is the contention at the moment.

+1, arguing over which ism simply distracts from this. We've been producing more and more, yet in return workers are (in real terms) getting less and less in return.

Now thanks to £9k per year + RPI fees for your 'union/trade card', even starting at nothing/zero wasn't considered enough of a handicap.

[Errol]

Tory rentiers stealing from kids to finance their property developer chums in the South East.

It's incredible most young people haven't rioted.

Nick Clegg has bent them all over and is b*ggering them for all he's worth.

Agree. Although I would say it's politicians from all sides not just Conservatives.

Clegg is particularly odious. Hopefully he'll lose his seat at the next election.

Edited June 14, 2013 by Errol

[Bloo Loo]

Agree. Although I would say it's politicians from all sides not just Conservatives.

Clegg is particularly odious. Hopefully he'll lose his seat at the next election.

I listened to him on the Radio before or as he was about to become leaser.

Could have been me speaking....got the job...turned into a clone.

Cant say he is any less principled than any of the others...Disagree as you might with the Beast of Bolsover..at least you could RESPECT him.

[fluffy666]

Clegg is particularly odious. Hopefully he'll lose his seat at the next election.

To be fair, he did explain that although he did sign a pledge card saying that he'd scrap tuition fees, he had his fingers crossed when he did it, so it didn't count.

[Dorkins]

My guess is that these new loans will be mostly or completely cancelled by a future government when people born after 1980 form an electoral majority. A lifelong additional 9% marginal tax is going to be both extremely unpopular and a huge disincentive to working. The Laffer curve applies to proles too.

There is a reason why reforming politicians in the past introduced legislation to allow debtors to escape debts they couldn't possibly clear. In a healthy society there needs to be scope for promises which cannot be kept to be recognised and cleared out of the system within a reasonable timeframe and with losses borne by both the debtor and the creditor. 21st century politicians threw this all out of the window when they created large, non-dischargeable, index-linked loans to be sold to 18 year olds with no accounting skills or experience of life as a working adult. It's the financial equivalent of predatory paedophilia.

[RichB]

Edited June 14, 2013 by RichB

[winkie]

Loans to keep people in a job, but the huge loan taken on that doesn't guarantee any kind of job.....money that may well buy you nothing.

....at least with buying a home you have something to show for it.

[Rare Bear]

I'm glad someone else got similar numbers.

I wonder if any of the politicians bothered, or realized that the vast majority of people with these loans will never make a dent in the balance.

I didn't think that numeracy figured highly in a PPE degree.

[Jack's Creation]

Student loans are like no other form of personal debt. They are much larger than any other loan that an 18 year old would ever be offered. They are not secured on an asset which could be sold to clear the debt. They are index-linked so cannot be inflated away. You cannot default on them even if you declare bankruptcy, and an Act of Parliament was used to give the loans this property. Repayments are compulsorily collected directly from your paypacket.

If these terms were written into a the terms of a consumer loan by a private entity, it would be against the law. Since it's the government they can make whatever rules they like, and they can change them by Act of Parliament if they want. The fact that the government is also the creditor to these loans creates just a teeny tiny conflict of interest.

I think it's important to bear these points in mind when talking about obligations. The fact that the government is also shafting exactly the same young people via the housing market is just the icing on the cake.

Exactly, these loans are evil and a form of indentured servitude. As ever "follow the money". These "SLABs" are big business.

Who was it exactly that advised and insisted that the loans could never be written off?

"Debt buyers snap up securitised loans 26 April 2013

Debt buyers CarVal Investors and Arrow Global have purchased a portfolio of securitised assets from Nationwide in a deal believed to be the first of its kind.

The two firms, alongside JRC Consult Ltd, have purchased the remaining assets of a portfolio of “old-style” securitised student loans from Nationwide.

It marks perhaps the first time in the UK that a buyer of unsecured consumer debts has purchased securitised assets.

The assets originate from a firm called Honours, which was established in 1999 to purchase a £1.03 billion portfolio of student loans from the UK Government.

This was the second sale of loans by the UK government following a similar sale to Finance For Higher Education Limited in March 1998.

The loans bought by Honours were subsequently securitised via an “Honour Series2 issue” at which time they were transferred to Nationwide.

“Arrow Global was originally funded by Sallie Mae, which is the largest student lender in the world,” said Tom Drury, chief executive of Arrow Global.

“We are very pleased to have had the opportunity to work with CarVal, JRC Consult and Nationwide to make a long-term commitment to growing our student loan business activity. This is our second acquisition in the student loan marketplace in the last 12 months.”

It is thought that about £300m of the £1 billion total assets still remains to be collected out.

It is also likely that Arrow Global will be the master servicer for these assets following the deal.

The run down period for the loans reportedly runs until the late 2020s."