Jump to content
House Price Crash Forum
Sign in to follow this  
Armitage Shanks

US but relevant - Millennial Home Ownership Shrinks as Student Debt Grows

Recommended Posts

Sad thing is, US student debt is nothing compared to the UK.

I know the UK debt is not really debt but more a tax on future earnings.

There's something dammning about student debt - a lot of young kids, taking on eye wateringdebt for courses that will turn out to be useless for a large percetnage, keeping a lot of 40+ lecturers in made up jobs.

The risk is borne by just the kid. It should be split between kid, uni and lecturers.

 

Share this post


Link to post
Share on other sites

We haven't really seen the impact of it yet but will do in the next 5 years.

People will effectively be paying an additional 9% tax. A higher rate tax payer will be paying 51% of their salary in tax, ni and student loan fees.Heck even a basic rate payer will be on 41% tax above £21k!

Doesn't leave much left to pay rent and save for a deposit does it?

Still if they didn't buy phones and coffee they could easily save up a 20% deposit in 6 months like people in the 1970s did.

 

Share this post


Link to post
Share on other sites
5 hours ago, Timak said:

We haven't really seen the impact of it yet but will do in the next 5 years.

Very true, only the latest graduates have the largest (effective additional tax rate for life) loans.  Assuming that most people take a few years to save for a deposit anyway, the largest impact is still few years away.  However, with 9% additional tax, they may not even be able to pay rent, never mind being able to save for a deposit.

Something has got to give: either university attendance will drop significantly or we'll effectively end up with universal basic income as all graduates will need benefits just to survive and pay back their massive loans

Share this post


Link to post
Share on other sites
14 hours ago, Bear Hug said:

Very true, only the latest graduates have the largest (effective additional tax rate for life) loans.  Assuming that most people take a few years to save for a deposit anyway, the largest impact is still few years away.  However, with 9% additional tax, they may not even be able to pay rent, never mind being able to save for a deposit.

Something has got to give: either university attendance will drop significantly or we'll effectively end up with universal basic income as all graduates will need benefits just to survive and pay back their massive loans

Just did the Student Loan Repayment Calculator. 

If you do a 3 year course and borrow the £5.5k each year for living expenses (which everyone will have to do without parental help) AND start on £25k (which seems optimistic) you will be paying back £68k over the next 27 years.

Do a 4 year course and it will be £81k to repay with the rest written off as you won't earn enough to repay it even with the very generous wage inflation the calculator predicts!

Amazing sums of debt at the start of your working life. 

 

Share this post


Link to post
Share on other sites

I have a sneaky feeling that when historians look back, they will see Student Debt as the point the West lost Capitalism - or at least lost in our current guise. (in the same way the USSR lost Communism by the end of the 80s)

Allowing the old to impose heavy taxes on the young to support their pensions and pampered way of living seems convenient now but probably spells disaster later.

High debt = sharing economy = lower-cost living = debt never repaid = also never having a house/pension = radically different model develops?

Share this post


Link to post
Share on other sites
19 hours ago, Bear Hug said:

Very true, only the latest graduates have the largest (effective additional tax rate for life) loans.  Assuming that most people take a few years to save for a deposit anyway, the largest impact is still few years away.  However, with 9% additional tax, they may not even be able to pay rent, never mind being able to save for a deposit.

Something has got to give: either university attendance will drop significantly or we'll effectively end up with universal basic income as all graduates will need benefits just to survive and pay back their massive loans

4 words: Central Bank balance sheet

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   36 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.