Tuesday, Jun 18, 2013

Another reason why University leavers might not have enough cash for a deposit

Guardian: Student loans 'plot' against graduates signals a time for major policy change

Rothschild proposes seriously increasing the student loan rate (and breaking the deal) with taxpayers underwriting it in a new "hedge" financial instrument. "This plot against graduates risks undermining trust in the loans system and the entire university application process, tearing a big hole in the social fabric of the UK in the process. It is time to walk away from this trainwreck of a policy and start again". Another transference of wealth from the young to bankers.

Posted by alan @ 07:42 PM (1664 views)
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10 Comments

1. mark wadsworth said...

hence and why it is YPP policy that on forming the government, we will write off half of all student loans, but then insist on fairly prompt repayment of the rest.

Tuesday, June 18, 2013 08:22PM Report Comment
 

2. Jalopy said...

More incentives not to take that nasty corporate job in London. Better to earn less outside, sit on the loan and maybe even get on the ladder. My wife still has her loan from the early 90's. Not likely to pay it off before she's 50 on her p/t teacher's salary.

Tuesday, June 18, 2013 08:52PM Report Comment
 

3. khards said...

So mw, where are you going to get the money from this from? Means testing winter fuel allowance, bus passes and state pensions could be a good start.

Tuesday, June 18, 2013 11:04PM Report Comment
 

4. libertas said...

Problem is, to make free university work again, you would have to leave the EU and provide funding only to sworn Citizens. Well, I see no problem with that!

Tuesday, June 18, 2013 11:09PM Report Comment
 

5. vinrouge said...

A "graduate tax" would be a fairer system levied at say 1% of all earnings for life, and include all those who got their education for free years ago.

Tuesday, June 18, 2013 11:51PM Report Comment
 

6. stillthinking said...

The state takes 50% of all.

If they take any more then they take -over- 50% (..!..). At that point its going to be in your face ridiculous. The fact that yet more is needed because of extremely poor investment bets on the young is surely a case to stop the state from doing so. These loans just prop up the prices of higher education anyway.

Wednesday, June 19, 2013 05:30AM Report Comment
 

7. Danielsmith said...

I did not think they were legally allowed to alter the repayment!?

Wednesday, June 19, 2013 07:02AM Report Comment
 

8. timmy t said...

I have never understood why politicians aim to get 50% of people into Uni in the first place. We'd be far better off returning to the days when about 8% went to Uni and a whole lot more did something more practical which prepares them for work better than a media studies degree. If I was advising someone doing their A levels now, I'd tell them to work their butt off, get good grades and then get a job with a decent company doing anything you can - just get in. Once you're in, keep working your butt off and in 3 years time, most employers given the choice of hiring you or a fresh grad, would choose you. If you reach your mid-late 20's and want to go to Uni, then go for it.

Wednesday, June 19, 2013 09:22AM Report Comment
 

9. mark wadsworth said...

@ Khards 2, this doesn't need any "new money" or any savings elsewhere! That "money" is spent and gone.

Instead of having £30 billion outstanding loans at currently a low interest rate, which might or might not dribble in over the next thirty years with lots of write offs and underpayments along the way, we just write off half and collect the remaining £15 billion a lot more quickly. The net present value is the same.

Wednesday, June 19, 2013 10:16AM Report Comment
 

10. khards said...

"These loans just prop up the prices of higher education anyway." - Too right they do.

Here in Ireland the is currently no student loan system and the cost of education is cheaper:

http://www.citizensinformation.ie/en/education/third_level_education/fees_and_supports_for_third_level_education/fees.html#ld8ce9
"Most colleges charge an annual student contribution, formerly called the student services charge. It is also known as a registration fee and it covers student services and examinations. The amount of the contribution varies from one institution to another. The maximum rate of the student contribution for the academic year 2013-2014 is €2,500.

Budget 2013: It was announced that the student contribution will be €2,750 in 2014-2015 and €3,000 in 2015-2016."

What is it in the UK these days? £9k/€10k PER YEAR!

Wednesday, June 19, 2013 10:18AM Report Comment
 

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