New Plan 5 Student Loans for England

[glazbagun]

New Student Loan scheme introduced to tax the fk out of you until you retire improve social mobility and fill the skill gaps in the UK. Start paying @£25K and for 40 years instead of 30.

This must the the most successful of government stealth taxes- piling on an unpayable debt at the beginning of your life and tweaking how much you pay back each year as needed. Interestingly the new interest rate has returned to RPI. IIRC, Cameron's plan was to sell the loans as an asset class. Presumably that's been abandoned now as too few are expected to repay the loan.

Image from Moneysavingexpert:



It looks like the main benefactor will be the government which is footing less of the bill for sending people to uni. I did wonder at the sense of government-funded loans that won't be repaid vs just straight up funding the course.

I think this definitely would have put me off uni. I'm plan 1 and will be loan-free in a year or two and will quite welcome the uplift. With these fees I think I'd have stayed unskilled and just scraped along in my small town.

MSE Link:
https://www.moneysavingexpert.com/students/student...

SLE Link:

https://www.gov.uk/government/publications/student...

Edited by glazbagun on Friday 12th May 19:07

[DeejRC]

Plan 5 From Outer Space!

[survivalist]

Surely Uni is becoming untenable for a lot of people. When I went it you just had to cover your living expenses, books etc. the level of debt required now seems pointless unless you’re aiming for a profession that requires a degree, lots of stuff you’d be better off learning on the job.

[phil-sti]

I’ve got another 2 starting Uni this September, they are mega pleased at the new repayment plans 😂

[Grumps.]

So is that £450 per year payback?

Not ever done this so don’t know the specifics on how it works

[LordFlathead]

It's much cheaper and easier to just photoshop a degree cert from Google and use that instead.

Middle rate tax payers become middle aged morons if they choose to spend 4 years plus chasing a degree to "better themselves". They automatically fall into the 40% tax bracket and spend the rest of their lives paying it back and for what?

There.. that ought to do it

[Vanden Saab]

glazbagun said:

New Student Loan scheme introduced to tax the fk out of you until you retire improve social mobility and fill the skill gaps in the UK. Start paying @£25K and for 40 years instead of 30.

This must the the most successful of government stealth taxes- piling on an unpayable debt at the beginning of your life and tweaking how much you pay back each year as needed. Interestingly the new interest rate has returned to RPI. IIRC, Cameron's plan was to sell the loans as an asset class. Presumably that's been abandoned now as too few are expected to repay the loan.

Image from Moneysavingexpert:



It looks like the main benefactor will be the government which is footing less of the bill for sending people to uni. I did wonder at the sense of government-funded loans that won't be repaid vs just straight up funding the course.

I think this definitely would have put me off uni. I'm plan 1 and will be loan-free in a year or two and will quite welcome the uplift. With these fees I think I'd have stayed unskilled and just scraped along in my small town.

MSE Link:
https://www.moneysavingexpert.com/students/student...

SLE Link:

https://www.gov.uk/government/publications/student...

Edited by glazbagun on Friday 12th May 19:07

The Government AKA everybody who pays tax...

[Murph7355]

LordFlathead said:

It's much cheaper and easier to just photoshop a degree cert from Google and use that instead.

Middle rate tax payers become middle aged morons if they choose to spend 4 years plus chasing a degree to "better themselves". They automatically fall into the 40% tax bracket and spend the rest of their lives paying it back and for what?

There.. that ought to do it

I'm sure there might be a flaw with your first bit of sage advice.

On the 40% tax thing, how do you think these loans work?

[philv]

glazbagun said:

New Student Loan scheme introduced to tax the fk out of you until you retire improve social mobility and fill the skill gaps in the UK. Start paying @£25K and for 40 years instead of 30.

This must the the most successful of government stealth taxes- piling on an unpayable debt at the beginning of your life and tweaking how much you pay back each year as needed. Interestingly the new interest rate has returned to RPI. IIRC, Cameron's plan was to sell the loans as an asset class. Presumably that's been abandoned now as too few are expected to repay the loan.

Image from Moneysavingexpert:



It looks like the main benefactor will be the government which is footing less of the bill for sending people to uni. I did wonder at the sense of government-funded loans that won't be repaid vs just straight up funding the course.

I think this definitely would have put me off uni. I'm plan 1 and will be loan-free in a year or two and will quite welcome the uplift. With these fees I think I'd have stayed unskilled and just scraped along in my small town.

MSE Link:
https://www.moneysavingexpert.com/students/student...

SLE Link:

https://www.gov.uk/government/publications/student...

Edited by glazbagun on Friday 12th May 19:07

The main benefactor is not the government.

its the tax payer.

[thepeoplespal]

survivalist said:

Surely Uni is becoming untenable for a lot of people. When I went it you just had to cover your living expenses, books etc. the level of debt required now seems pointless unless you’re aiming for a profession that requires a degree, lots of stuff you’d be better off learning on the job.

My missus has quite a few of her team on an apprenticeship for not just A'level equivalent but degree level at good universities and even has plans for one to do a masters under an apprenticeship as well. The company are top sliced a serious wedge every year and the money is either spent on apprenticeship training or they lose it, so they now have a team well incentivised to stay fairly long term while they get their degree with zero debt and zero cost to themselves. The projects are tailored to the business needs and are of high quality for both the business and the student.

My more than capable niece was adamant she wasn't going to university and wanted to work, she is now working while also getting a free degree via the apprenticeship route. The work and degree alongside will really suit some businesses and apprentices as they really get to apply their knowledge, I think if this isn't interfered with UK PLC will see some remarkably useful benefits from this scheme. Anyone doing a business/science degree with a view to working for a business would be mad to ignore a degree apprenticeship.

[scrw.]

So glad #2 offspring has just managed to land a degree apprenticeship, adds a year to the course but a degree & 4 years of work experience while earning a decent wedge and no student loan is a good place to be.

[mjb1]

survivalist said:

Surely Uni is becoming untenable for a lot of people. When I went it you just had to cover your living expenses, books etc. the level of debt required now seems pointless unless you’re aiming for a profession that requires a degree, lots of stuff you’d be better off learning on the job.

Unfortunately, they've made it so that you need a degree for just about any skilled job these days, e.g. nurses. And any applicant for a white collar job will be at a disadvantage if they don't have a degree when the other applicants do. What the govt should do is halve (or greater) the number of people going to uni by culling all the light weight, wishy washy and vocational courses. Then they could halve the fees for those studying a worthwhile course. Or maybe a compromise would be to heavily subsidise the tuition fees for STEM subjects?

At the current rate of increase, the national min wage will be about £29k by 2026/7. So reducing the repayment threshold to 25k is meaningless, anyone actually working will be earning way in excess of that.

[Previous]

It seems like a fantastic plan to kill off the last hopes of social mobility, keep the working classes down in their place, and ensure that well paid white collar professional jobs go back to the upper middle classes.

Edited by Previous on Saturday 13th May 00:34

[Donbot]

Oh look, the government are freezing the repayment threshold again. If they were a private company they would be in court. fking shysters.

[eliot]

mjb1 said:

. What the govt should do is halve (or greater) the number of people going to uni by culling all the light weight, wishy washy and vocational courses. Then they could halve the fees for those studying a worthwhile course. Or maybe a compromise would be to heavily subsidise the tuition fees for STEM subjects?
.

Indeed

[Hugo Stiglitz]

survivalist said:

Surely Uni is becoming untenable for a lot of people. When I went it you just had to cover your living expenses, books etc. the level of debt required now seems pointless unless you’re aiming for a profession that requires a degree, lots of stuff you’d be better off learning on the job.

It's utterly bizarre. You'd think people who have a reality check. Is that media or art degree going to get me a high paid role?

I think we got a student loan of £4,000. I paid it off in two years. Absolutely no way I had borrowed 20k+. I wouldn't have gone.

Even now I remember sitting down and costing the accommodation, work, costs etc and thinking pro/con will it be worth it? I remember looking at halls of £60 a week and thinking I can't afford rhat so I went into a shared house in year 1.

I also had to work part time from the start.

It's surreal how people think its what everyone does (the debt) so will I.

[Matthen]

Is it a surprise huge numbers go? I recall from my school years (tuition fees had just gone up), that the "Go to University" retoric was forced down the throat of anyone who wasn't a dribbling moron - no alternatives were suggested or highlighted, no alternative guidance was given, and little import was given to the cost of the repayments : just you don't have to pay it back until you earn "sum that seems large to a 16 year old" - now we're all paying that 7% tax (and listening to our parents generation moan about the higher income tax rate, and how it affects them and their retirement...) - university is pressure sold (miss-sold?) to kids as they finish school, and it's no surprise that huge numbers go.

[Hugo Stiglitz]

Mis-sold definitely. My son has just turned13 and finds exams/tests easy but already I've started saying that you don't have to/you decide where you go; Army etc or emigrate etc. The money we are building up can easily be turned into a deposit- he knows that.

[Fusion777]

Matthen said:

Is it a surprise huge numbers go? I recall from my school years (tuition fees had just gone up), that the "Go to University" retoric was forced down the throat of anyone who wasn't a dribbling moron - no alternatives were suggested or highlighted, no alternative guidance was given, and little import was given to the cost of the repayments : just you don't have to pay it back until you earn "sum that seems large to a 16 year old" - now we're all paying that 7% tax (and listening to our parents generation moan about the higher income tax rate, and how it affects them and their retirement...) - university is pressure sold (miss-sold?) to kids as they finish school, and it's no surprise that huge numbers go.

I finished by GCSEs in 2002 and as you say, the assumption was that anyone in our year with academic ability would go down the A-level and Uni route. Those that didn't left at 16 and went straight into whatever job they could find. There was no real mention of apprenticeships, trades, alternatives etc. I was lucky in that I knew I wanted to study a particular degree, but I think a lot of people drifted into things.

The inclusion of vocational work at schools seems to have been a big plus over the past few decades. I look at my old school and they even have vehicle maintenance bays- things that didn't exist when I was there. Wouldn't have made a difference to me personally, but would have been good for some of the folks there.

[JagLover]

I don't disagree with students paying for the costs of their own tuition. It does however create an issue of high marginal tax rates at some income levels due to other misguided policies.

For example at the level where you start to lose child benefit the marginal rate of tax is 40% + 2% NI + (roughly) 15% child benefit withdrawal + 9% SL. A marginal rate of around 66%.

Given that millions now earn around this threshold it is not much incentive to work overtime or seek a promotion if they have children.!

I think the interest rate should be capped at CPI not RPI and also that other damaging distortions need to be removed, such as the child benefit removal.

Any potential applicants to university also need to have what they will pay back properly explained and alternatives, such as apprenticeships, highlighted.

Edited by JagLover on Saturday 13th May 10:55