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Student Debt and Home Ownership

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Well youve got different types of debt.

Student loans, which are a tax on future earnings over an arbitrary limit.

And unsecured debt run up during the studies. Mainly housing related.

Neither is negligible.

You may or may not be surprised at the number of ex students who behave like my sister - 'Im not going to get a well (18k+ I think) job as ill get taxed and have to pay back my student loan.'

It might be a daft Northern bint thing but the number of people Ive heard the same from is quite striking.

So, not only did the expansion of HE drag more people in pointless education rather than gainful (from a tax perspective at least) employment. Its also acting as a big fcking drag on getting people working and paying tax.

 

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34 minutes ago, spyguy said:

Well youve got different types of debt.

Student loans, which are a tax on future earnings over an arbitrary limit.

And unsecured debt run up during the studies. Mainly housing related.

Neither is negligible.

You may or may not be surprised at the number of ex students who behave like my sister - 'Im not going to get a well (18k+ I think) job as ill get taxed and have to pay back my student loan.'

It might be a daft Northern bint thing but the number of people Ive heard the same from is quite striking.

So, not only did the expansion of HE drag more people in pointless education rather than gainful (from a tax perspective at least) employment. Its also acting as a big fcking drag on getting people working and paying tax.

 

And that's the hardly surprising result of using further education as a means of hiding youth unemployment.

The remarkable thing about the new insane amount of student debt is that its having a twin effect - its stopping those who should go to university from doing so (I know a fair few who are hunting for degree apprenticeships) while the 17-18 year olds who used to be encouraged to get a job are being pointed at 3rd division unis as few jobs exist for 18 year olds. Any children I know are being pointed at the former rather than the latter. 3-4 years experience is always going to win against a degree especially if you are getting a degree at the same time).

As for the end result on the housing market - it won't actually have much impact. In 10-20 years time house prices will be 5-10% lower than they might have been due to graduates being able to borrow less.... But given the scheme of things and the time it will take for the impact to occur its irrelevant.

Edited by eek

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Whats the incentive to go to work at 16? You will be paid pennies on your apprenticeship, then 18k when youre 21. So that's gonna take you 20 years to save for a deposit, then a debt save on 250k(more in London). 

Other choice is 44k debt (but no real incentive to pay if off) but a chance of a higher salary when you graduate. Prolly the best of a bad dea, either way prospects are grim. 

Better of leaving uni with debts and become a globetrotting fruit picker in the Philippines ....

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5 minutes ago, GreenDevil said:

Whats the incentive to go to work at 16? You will be paid pennies on your apprenticeship, then 18k when youre 21. So that's gonna take you 20 years to save for a deposit, then a debt save on 250k(more in London). 

Other choice is 44k debt (but no real incentive to pay if off) but a chance of a higher salary when you graduate. Prolly the best of a bad dea, either way prospects are grim. 

Better of leaving uni with debts and become a globetrotting fruit picker in the Philippines ....

You can't leave education now until you are 18. So most apprenticeships now start far later than they used to. 

The advantage of taking a degree apprenticeship (there are 4 levels see https://www.findapprenticeship.service.gov.uk/apprenticeshipsearch ) when you 18 is that you are going to get paid and work experience whilst getting your degree whilst others are just going to university. So you finish your degree apprenticeship aged 22 with 4 years practical work experience, a degree and no debt whilst graduates start off with £44k of debt and no work experience.

From what I've heard at a couple of accountancy firms its harder to get on one of their degree apprenticeships than it is to get on their graduate schemes (and for a very good reason).

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4 hours ago, spyguy said:

Well youve got different types of debt.

Student loans, which are a tax on future earnings over an arbitrary limit.

And unsecured debt run up during the studies. Mainly housing related.

Neither is negligible.

You may or may not be surprised at the number of ex students who behave like my sister - 'Im not going to get a well (18k+ I think) job as ill get taxed and have to pay back my student loan.'

It might be a daft Northern bint thing but the number of people Ive heard the same from is quite striking.

So, not only did the expansion of HE drag more people in pointless education rather than gainful (from a tax perspective at least) employment. Its also acting as a big fcking drag on getting people working and paying tax.

 

...just another less than bright idea sparked by 'Nulibour' Blair and Broon elites (send them all to UNI)...and carried on by the less than enlightened Cameron elites .....the ghosts are returning to haunt.....:rolleyes:

Edited by South Lorne

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6 hours ago, spyguy said:

Well youve got different types of debt.

Student loans, which are a tax on future earnings over an arbitrary limit.

And unsecured debt run up during the studies. Mainly housing related.

Neither is negligible.

You may or may not be surprised at the number of ex students who behave like my sister - 'Im not going to get a well (18k+ I think) job as ill get taxed and have to pay back my student loan.'

It might be a daft Northern bint thing but the number of people Ive heard the same from is quite striking.

So, not only did the expansion of HE drag more people in pointless education rather than gainful (from a tax perspective at least) employment. Its also acting as a big fcking drag on getting people working and paying tax.

 

My friends wife works for student loans in Darlington,there are huge numbers just under the limit (and just over).Its one of the reasons the government stopped index linking the level they start to be paid back.The amount on plan 2 (the one now) is £21k a year,then 9% on anything above.£30 a month on £25k a year.Cant see much ever being paid back.

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On paper, it works.You take a loan, pay back ~80/month for 30 years.

In practise, its fcked. Its just been a massive increase of FE and HE spending, with no noticable increase in the number of employable graduates.

There needs to be a way to get the Uni/college and lecturers to have skin in the game. Othrrwise the majority of HE will turn into s bunch of Englisg lit and arts/humanities degrees i.e.stack em high, send them to library.

Bit like forcing kids to stay til 18. Just a massive make work for teachers. 50% of kids dont get good enough teachers up to the age of 16.

 

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8 minutes ago, durhamborn said:

My friends wife works for student loans in Darlington,there are huge numbers just under the limit (and just over).Its one of the reasons the government stopped index linking the level they start to be paid back.The amount on plan 2 (the one now) is £21k a year,then 9% on anything above.£30 a month on £25k a year.Cant see much ever being paid back.

Temptation is to earnto limit then cash in hand it.

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3 minutes ago, spyguy said:

Temptation is to earnto limit then cash in hand it.

I don't blame them if this is what they are doing.

choice 1: work hard for A levels. Secure place at uni.  Pi$$ around for three years but also study hard.  Leave with nearly 50k of debt and land a job earning not that much more than your mates who didn't go to uni.  Debt hangs around like a millstone until you are 50 (until the government moves the goalposts on student loans again)

choice 2: leave school at 16. Pi$$ around for a couple of years. Get pregnant. Get free house, all bills taken care of and loads of money.  When sprig is school age, pop another out.  Then when you have to get a 16 hour job.  Money keeps rolling in for very little effort 

if I had taken choice one, I would be trying to game the system as much as I could.

idiots making up idiot policy, not able to see the unintended consequences 

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Many people dont think of student loans as 'real'. Colleague of mine lost a house as his mortgage deal fell through at the last minute. He hadnt declared his stident loan but it was picked up when he provided copy payslips. It took a significant chunk off of the amount they would lend him.

I'm in the final year of repaying my student loan. Original loan was £16k talen around the age of 23 and im now a 40 year old earning £50k. The student loan repayment is just under £200 a month from my net pay. Unlike other 'taxes' it isnt deducted from my gross pay.

£200 a month must translate to a fairly substantial reduction in mortgage affordability. And the poor sods now stuck with £40k+ student loans may well never pay them off. 

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I have been interviewing grads recently...they seem to have only one thing in spades and that is confidence....they think they are on The apprentice and are all show but little substance. You have never heard such cr@p, and in some cases lies and elaborate fabrications. Really interesting change in culture from when I was in early twenties.

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And in buy-to-let Britain, this is going to be music to the ears of landlords.

Generations to come unable to afford their own homes. A landlord's dream.

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6 minutes ago, regprentice said:

Many people dont think of student loans as 'real'. Colleague of mine lost a house as his mortgage deal fell through at the last minute. He hadnt declared his stident loan but it was picked up when he provided copy payslips. It took a significant chunk off of the amount they would lend him.

If my understanding is correct, we are still in the very early years of students graduating with the very large fees.  As grants were removed and fees were introduced, and gradually increased, the new graduates must have delayed house purchases for increasing number of years.  So, any effects of the increasing costs were felt not immediately but a few years down the line.  Therefore, the impact of the totally unaffordable housing for the latest students is probably not fully felt yet.  The chickens will come home to roost in the next few years.

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4 minutes ago, Tempus said:

And in buy-to-let Britain, this is going to be music to the ears of landlords.

Generations to come unable to afford their own homes. A landlord's dream.

Also unable to pay rent. A landlord's nightmare.

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27 minutes ago, Bear Hug said:

Also unable to pay rent. A landlord's nightmare.

There was an article in the Daily Telegraph with the usual ****** about the most affordable time in history to be a first time buyer due to low interest rates. They quoted a current figure of spending about 18% on mortgage compared to one of the highest apparently just before the crash of about 24%. The story quoted the Council of Mortgage Lenders. Two things struck me, if the highest percentage had been when rates were at 5.5% what would they be now if we had a similar rate given the housing inflation we've had since then. And what are tenants paying in percentage terms for comparison because in my mind they're paying far high than first time buyers. 

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Wouldn't it make sense to go to University in The Netherlands or anywhere else where tuition is low but course work in English? 

ljubljana university anyone? 

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1 hour ago, stuckmojo said:

Wouldn't it make sense to go to University in The Netherlands or anywhere else where tuition is low but course work in English? 

ljubljana university anyone? 

The advice from the workers at the SLC in Darlington is to head to Germany....

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20 hours ago, spyguy said:

Well youve got different types of debt.

Student loans, which are a tax on future earnings over an arbitrary limit.

And unsecured debt run up during the studies. Mainly housing related.

Neither is negligible.

You may or may not be surprised at the number of ex students who behave like my sister - 'Im not going to get a well (18k+ I think) job as ill get taxed and have to pay back my student loan.'

It might be a daft Northern bint thing but the number of people Ive heard the same from is quite striking.

So, not only did the expansion of HE drag more people in pointless education rather than gainful (from a tax perspective at least) employment. Its also acting as a big fcking drag on getting people working and paying tax.

 

What is she doing?  Of course student loans like high property prices are good incentive for those who did something useful at uni to emigrate.

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12 hours ago, Wayward said:

I have been interviewing grads recently...they seem to have only one thing in spades and that is confidence....they think they are on The apprentice and are all show but little substance. You have never heard such cr@p, and in some cases lies and elaborate fabrications. Really interesting change in culture from when I was in early twenties.

That's quite funny, but seems to be believable. I have come across quite a few graduates at various clients sites - they dress like footballers (like the muppets on the apprentice), clearly spend a lot of time on making their hair stand up (and out loud), reek of aftershave, and act very very cocky indeed...oh and they talk down to people like me with my own business and 25 years experience.

Its no wonder the house price fantasy has been allowed to thrive, if you can fob this lot off with paying for their own education (implemented by all the people who took a free education) without any real complaint, you can also persuade them that the housing market is a living beast with its own personality, that like a big giant can only grow, and that your aspiration when you end up working for your Allan Sugar is to trample over everyone to the top of the bean stalk and buy one of these houses. I despair.

I never have understood the arrogance of people who look down on other people, when they really have nothing to be arrogant about. Odd.

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20 minutes ago, iamnumerate said:

What is she doing?  Of course student loans like high property prices are good incentive for those who did something useful at uni to emigrate.

20h/week in an ethnic gift shop.

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12 hours ago, Wayward said:

I have been interviewing grads recently...they seem to have only one thing in spades and that is confidence....they think they are on The apprentice and are all show but little substance. You have never heard such cr@p, and in some cases lies and elaborate fabrications. Really interesting change in culture from when I was in early twenties.

Always been the case. At least from the late 80s.

Maybe its worse now that comedy business like the Apprentice has gone mainstream.

I sat in group interviews and you get the OTT BS about 110%, I want to be in your seat' in 10 years time.

Does not work if you dont have any real experience to show.

What I see are kids in their early 20s who have no, absolutely none, experience of working, even in something like an icecream shop.

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I'm a few years older than today's graduates but grew up thinking that I needed to be full of BS to 'succeed'. Not sure why, maybe a combination of school and believing the media. It didn't take long for me to start valuing skill - just wish I'd learnt that earlier! 

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22 hours ago, GreenDevil said:

Whats the incentive to go to work at 16? You will be paid pennies on your apprenticeship, then 18k when youre 21. So that's gonna take you 20 years to save for a deposit, then a debt save on 250k(more in London). 

Other choice is 44k debt (but no real incentive to pay if off) but a chance of a higher salary when you graduate. Prolly the best of a bad dea, either way prospects are grim. 

Simples: just emigrate to a country that offers unskilled work at 5 times the UK national minimum wage. 

Oh....wait....

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Wel sheeeit,

If banks are scrutinising lending to people on £30k where £93/mo for student loans is an issue... well... then the UK is actually completely fecked.

We've got a lot more fundamental issues beyond all the crap pandered in Whitehall and on this forum.

Completely fecked.

duh

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678490&_dad=portal

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