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Graduate Whose Loan Grew By £1,800 In One Year Says Students Were Misled

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http://www.theguardian.com/education/2016/may/25/simon-crowther-loan-grew-by-1800-a-year-says-government-misled-students

A graduate whose letter to his MP went viral after it detailed how his student loan had grown by more than £1,800 in the year since he left university has said he and his contemporaries did not understand what they were signing up to when they took out the financing.

Perhaps if you understood compound growth you might have realised what you were doing when you signed. Another student loan mis-selling scandal looming?

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The real question is who is selling these loans to the countries children. OK so they may be 18 when they GO to university but they are 17 when the decide to apply and presumably that is when the loans are marketed/sold to them...

Are teachers not regulated by the FCA (or whatever they are called this week)? ... No

Who else is advising these *children* about taking on a student loan?

I can't even buy a car for cash without signing FCA disclaimers... and yet children are taking on HUGE student loans without (as far as I know) the FCA being involved. That can't be right!?!

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These debts will be written off in the end. In fact it would not surprise me if this is one of the first places helicopter money makes an appearance, US first followed by us as per.

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A close contact of mine that works in higher education has been saying for some time that this will be the next mis selling scandal. Students have been mis sold to on two fronts, firstly that the loans were in any way affordable and secondly that the crappy courses that they are studying will actually improve their job prospects.

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It's a terrible deal.

The thing that has surprised me is all the students I find posting on threads about the loans defending the system and telling me that the repayment terms are 'much better' because the thresholds are higher. They don't seem bothered about paying it off at all - it's 'not a real debt'.

An extra 9% tax you'll be saddled with for life and that the children of the rich don't pay is apparently totally acceptable and not at all designed to undermine social mobility.

Finally paying off my own 16k loan was one of my biggest financial achievements. It felt great. If I was 17 now I hope that someone would sit me down and tell me it's not worth it.

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It's a terrible deal.

The thing that has surprised me is all the students I find posting on threads about the loans defending the system and telling me that the repayment terms are 'much better' because the thresholds are higher. They don't seem bothered about paying it off at all - it's 'not a real debt'.

An extra 9% tax you'll be saddled with for life and that the children of the rich don't pay is apparently totally acceptable and not at all designed to undermine social mobility.

Finally paying off my own 16k loan was one of my biggest financial achievements. It felt great. If I was 17 now I hope that someone would sit me down and tell me it's not worth it.

That won't happen, how many school leavers go on to uni is probably one of the metrics used to rate school performance, so the teachers are probably under pressure to encourage the kids to go.

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I think this pisses me off even more than silly bonkers house prices.. at least going balls-deep in mortgage debt or opting out and renting forever is a choice you make as an adult, locking our next generation in endless debt seems incredibly counter productive and stupid..

How have we allowed this to happen? It's bad enough we have the endless UK debt clock, now we've given one to each of our uni graduates as well..

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When I went to uni back in 2000, I was terrified of getting 10k in debt..

If it had been 27k, then I almost certainly would never have gone.

And whilst the Uni I went to had it's problems, it really set up the platform for my career and gave me the confidence to go out and do pretty well for myself.

That letter from the Student Loan Company is horrifying.. I remember being pretty miffed off at paying £20 interest a month (I think it was £20), paying £150 a month would have been crushing and meant I would never have even been able to stop the loan from growing for the first 3 years of my career after leaving uni.

Now I employ people (not many, but a few), I don't want employees saddled with growing debts.. people with debt are driven by fear, not by the confidence to have ideas and make the right longer term career choices.

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It's not £27k. My daughter has just left uni with about £45k.

RPI + 3% compounding.

There is no real alternative for most people. Education is a gun to the head....just like shelter. That's why 'they' like it. It turns into a competition between individuals as opposed to a complaint to government re policy.

Under no circumstances must the masses be allowed to accumulate capital because with it comes self determination and liberty.

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It's not £27k. My daughter has just left uni with about £45k.

RPI + 3% compounding.

There is no real alternative for most people. Education is a gun to the head....just like shelter. That's why 'they' like it. It turns into a competition between individuals as opposed to a complaint to government re policy.

I remember you lamenting the introduction of large tuition fees at the point your daughter was going to start uni. And now she's left.

Where does time go? *stares into whisky glass*

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When I went to uni back in 2000, I was terrified of getting 10k in debt..

If it had been 27k, then I almost certainly would never have gone.

And whilst the Uni I went to had it's problems, it really set up the platform for my career and gave me the confidence to go out and do pretty well for myself.

That letter from the Student Loan Company is horrifying.. I remember being pretty miffed off at paying £20 interest a month (I think it was £20), paying £150 a month would have been crushing and meant I would never have even been able to stop the loan from growing for the first 3 years of my career after leaving uni.

Now I employ people (not many, but a few), I don't want employees saddled with growing debts.. people with debt are driven by fear, not by the confidence to have ideas and make the right longer term career choices.

this is our entire control system

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It's a terrible deal.

The thing that has surprised me is all the students I find posting on threads about the loans defending the system and telling me that the repayment terms are 'much better' because the thresholds are higher. They don't seem bothered about paying it off at all - it's 'not a real debt'.

An extra 9% tax you'll be saddled with for life and that the children of the rich don't pay is apparently totally acceptable and not at all designed to undermine social mobility.

Finally paying off my own 16k loan was one of my biggest financial achievements. It felt great. If I was 17 now I hope that someone would sit me down and tell me it's not worth it.

Very much agree. I've got a few months left to finish paying off my 13k loan I finished uni with. Today's students should be concerned about it because my repayments are currently £60 a week (I'm on weekly pay), and that is very noticeable considering disposable income is about £50 a week.

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I never had student loan when I was uni but I know some of my mates did. You don't pay it back till you earn so much but thanks to wages going up they do now.even though its a low wage thanks to inflation .

I would never have gone to uni without the grant and summer job I had

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Yup, has been noted on here before that a person's student debt will very likely be rising unless they can start on a higher rate band straight out of uni.

I simply do not believe I could cope with the sort of situation that many young graduates face. That this type of financial repression can be inflicted on others is a reflection of the priorities and values of the UK electorate as a whole and it is a disgusting manner in which to treat people.

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She has a partner she met at Uni and together they are starting life with £100k of undefaultable student debt.

Being charged 3%+ RPI every year. That's currently £4k of post tax income. Their starting salaries at work are about £22k gross each - they've done well to get decent jobs with good prospects. But they have to find a flat in/near London and pay rent and commuting costs. And I don't think they are eligible for tax credits/housing benefit.

That is a story of our times.

Except the amount you pay is capped depending on the salary you earn.

So if you earn less than 50k you pay way less than the rate of increase.

The loan is written off after 30 years or the age of 50 or something like that.

Presumably if you are on any sort of benefits you won't pay any off at all.

You would think people in the treasury can't do maths.

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I imagine there could be some unexpected negative consequences to teaching people that taking on massive loans that they will never pay them back is normal.

Borrow / Spend / Bankruptcy / Default --> Repeat?

With the real value of money plummeting as a result?

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The letter comes across as whiny and irrelevant (and gloating) (what has the rate on his mortgage got to do with his student loan rate anyway? A mortgage has collateral. It should be lower.) His house cant swan off to Dubai or America for a start.

HOWEVER, even on this forum we have discussed how absurd it is for the government to call banks hardball selling loans to people who are legally adults 'misspelling' while they themselves sell to many 17 year olds who are still legally children. (and also state earnings as if they are a given upon graduation)

IMO student loans are evil, but not for the gimme gimme gimme reasons this dolt states.

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Except the amount you pay is capped depending on the salary you earn.

So if you earn less than 50k you pay way less than the rate of increase.

The loan is written off after 30 years or the age of 50 or something like that.

Presumably if you are on any sort of benefits you won't pay any off at all.

You would think people in the treasury can't do maths.

True.

At the mo, its a graduate tax presented as a loan.

I'd worry if it changed.

Its unsatisfactory as it lacks a mechanism to transmit more money to grads of Unis/courses that generate tax and removing it frm Gards/Unis that never pay stuff back.

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Except the amount you pay is capped depending on the salary you earn.

So if you earn less than 50k you pay way less than the rate of increase.

The loan is written off after 30 years or the age of 50 or something like that.

Presumably if you are on any sort of benefits you won't pay any off at all.

You would think people in the treasury can't do maths.

This is the problem. Those that dare to earn a little more than the minimum will be left little better than if they hadn't bothered with uni in the first place. The figures regarding post graduate earnings are historic, they were generated from when either there were no fees or from the time of the three thousand pound cap. Currently we seem to have a system that mis-educates, if it was working correctly the constant need to recruit from abroad would not exist.

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One answer is to get some good life and work experience and then do your degree at the age of 25 when you will be classed as independent and able to get more support, bursaries etc. You are also more likely to do a relevant degree at that age. It's just putting up with teenage students is the problem.

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This is the problem. Those that dare to earn a little more than the minimum will be left little better than if they hadn't bothered with uni in the first place. The figures regarding post graduate earnings are historic, they were generated from when either there were no fees or from the time of the three thousand pound cap. Currently we seem to have a system that mis-educates, if it was working correctly the constant need to recruit from abroad would not exist.

And all the risk with student fees is carried by the student.

Unis and lecturers need to be exposed i.e. their pay and pension should depend on the future earnings of their students.

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That won't happen, how many school leavers go on to uni is probably one of the metrics used to rate school performance, so the teachers are probably under pressure to encourage the kids to go.

I do hope that is not true.

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