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Martin Lewis: Time to stop calling student loans a loan

#1
Martin Lewis: Time to stop calling student loans a loan - Telegraph

Martin Lewis must be a very trusting soul. Who really believes that once a bankrupt government has a few million fish on the hook for £50k+ they're not going to start playing around with the student loan interest rates and earnings thresholds to maximise revenue?

Then there is the compound interest....

Interest is charged on the loan at £2,663.10 for the first year, if you cannot afford to make repayments then it will be added to your loan and further interest is charged on the interest.

£40,350 - Graduation
£43,013 - 1 Year after Graduation
£45,852 - 2 Year after Graduation
£48,878 - 3 Year after Graduation
£52,104 - 4 Year after Graduation
£55,543 - 5 Year after Graduation
£59,208 - 6 Year after Graduation
£63,116 - 7 Year after Graduation
£67,282 - 8 Year after Graduation
£71,722 - 9 Year after Graduation
£76,456 - 10 Year after Graduation

Getting on for eye watering levels of debt.

Of course there is the fact the debt is wiped after 30 years and student's pay nothing (currently) until their gainful employment garners a salary of >£21,000.

Even so inflation will ensure most of them do......

And then there is this...

Student loans: Nearly half EU students 'fail to repay loans' - Telegraph

[h=1]Student loans: Nearly half EU students 'fail to repay loans'[/h] [h=2]Nearly half of EU students liable to pay back loans after going to British universities are failing to keep up with repayments, raising the prospect of the continent's "brightest and best" getting a free education while homegrown scholars face eye-watering debts.[/h]
Make of that what you will.
 
#2
My sister and brother in law were talking about this recently. Their daughters are 7 and 4 years old. What my sis has done is bought a slightly shabby but otherwise sound detached house for a song, and I have about 12 years to fix it up, and they have the same timeframe to hope that house prices recover. Hopefully, we'll make enough money to put the 2 kids through Uni. If they study here in NI and live at home, we might just pull it off.

I do acknowledge that few people are in a position to do this, however.
 
#3
No. "Interest" on student loans is effectively the inflation rate. There is no profit to be made. It is also the purvey of a quango.

Now, if student loans are a tax, then so are mortgages. Both are a decision you may make on taking out debt for self-improvement.
 
#4
#6
So basically the financial future of the UK relies on how many overtime shifts the burger flippers of tomorrow can wangle.
Don't be so cynical.

With wages dropping and a debt to service because of their Mickey Mouse humanities degrees I think it'll be more a matter of grim faced burger flipping for 8 hours a night then angrily doing a full daily stint scrapping off bodily waste at the granny farm leaving time to pick up a few cans at the food bank before necking the anti-depressants and grabbing a few hours sleep.

Meanwhile millions more folk sail in from much poorer post-communist countries with functional vocational education systems and manage quite comfortably while wondering what the natives are all whinging about. That is unless they settle and raise kids.

It also seems inevitable that todays kids will have to pay much higher taxes to support the growing hoard of elderly state dependents reducing incomes still further.

All I can say is better make sure there is no shortage of young people or UK PLC is toast.
 
#7
Unlike primary and secondary education higher education isn't compulsory, they don't have to goto university. If someone wants a degree then they should be prepared to pay for it themselves.

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#8
Don't be so cynical.

With wages dropping and a debt to service because of their Mickey Mouse humanities degrees I think it'll be more a matter of grim faced burger flipping for 8 hours a night then angrily doing a full daily stint scrapping off bodily waste at the granny farm leaving time to pick up a few cans at the food bank before necking the anti-depressants and grabbing a few hours sleep.

Meanwhile millions more folk sail in from much poorer post-communist countries with functional vocational education systems and manage quite comfortably while wondering what the natives are all whinging about. That is unless they settle and raise kids.

It also seems inevitable that todays kids will have to pay much higher taxes to support the growing hoard of elderly state dependents reducing incomes still further.

All I can say is better make sure there is no shortage of young people or UK PLC is toast.
Maybe we need to bite the bullet and stop perpetuating the folly of creating more and more youngsters to generate more and more taxes.... who will need more and more youngsters to generate revenue for them later (ad infinitum). How about a state where the family only has children if they can support them with minimal benefits?


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#9
Maybe we need to bite the bullet and stop perpetuating the folly of creating more and more youngsters to generate more and more taxes.... who will need more and more youngsters to generate revenue for them later (ad infinitum). How about a state where the family only has children if they can support them with minimal benefits?
I'd go with that, at what point do we say, 'actually it's getting rather cramped here'.

It is just a ponzi scheme.
 
#10
The Telegraph article from Martin Lewis is a cut and paste from an article he published on Money Saving Expert a while back.
Quite why he needs the Telegraphs geld as a hack, when he pocketed £28 million from the sale of Moneysavingexpert, is beyond me.....hopes of a political career perhaps, or just the vanity of celebrity and to see his picture in the papers?

What he deliberately ignores is the simple truth that 21K a year is a piss poor wage, and implies that if you earn more than that you should be grateful.

Of course they could do away with with student loans repayment style and just levy a Graduate tax at x% rate for anyone who has had the benefit of a University education.

But then the treasury and HMRC control taxation which is applicable across the UK. To mean that powers have not been devolved to Edinburgh or Cardiff.

The Graduate Tax would seem the sensible solution, those who benefit pay a little extra back across their working lives but politics demand it has to be a complicated compound interest loan system.
 
#11
Ah but a "Graduate Tax" does not have the upfront joy for a Government of selling Student loans into securitisation vehicles, does it?
 
#13
Ah but a "Graduate Tax" does not have the upfront joy for a Government of selling Student loans into securitisation vehicles, does it?
Trouble is, nobody bothers if you don't earn enough to pay a tax or repay the loan. That's not seen as a loss to Government coffers. However, when in 10, 15, 20, 25 years' time someone works out how much the Government has shelled out in "loans" that haven't been repaid, especially with compound interest, it will look like a massive loss. and one that the taxpayers will have to burden.

Still, the bunch who brought the scheme in will be in lucrative sinecures or retired or dead by then, so they won't give a feck.
 
#14
If the potential graduates cannot understand the terms of the student loans then they have no business going into higher education.

What you call it doesn't matter, just like the National Insurance Contribution is a tax, the Community charge is too and the bedroom tax isn't!
 
#15
I was fortunate enough to have studied from 1991 to 94 when The Rt Hon Sir John Major KG CH was prime minister. I got the full grant for each year that paid my lodgings and there was enough over for a social life of sorts. A grant was introduced in 1992 - think I borrowed somewhere in the region of 500 quid to buy a computer. Prior to this I'd been on benefits whilst studying for a BTec. The SLC took back 25 quid a month when I found employment so hardly noticed it. Not sure if I paid interest on it.
 
#16
Of course they could do away with with student loans repayment style and just levy a Graduate tax at x% rate for anyone who has had the benefit of a University education.
So, are you suggesting that I, or anyone else who puts themselves through a degree course, and funds it themselves, should then pay extra tax for the privilege?

That's the same as saying that you want to penalise those who wish to improve their own personal circumstances, future prospects and who have the desire to get on in life by giving that money to those who are either incapable or who have no desire or ambition.

That's the sort of idea that the Labour Party would dream up.

You're not a communist are you?

I would suggest that if you make the sacrifices - time and finance wise - to improve your own education, you take the rewards that go with it.*

If you are one of those people who sat around with their thumb up their arse and failed to make the most of twelve years of free education, and are unwilling to do anything about it later, then your low-paying job is your reward.





*Your reward for studying a pointless degree because it was easy is flipping burgers or cleaning toilets.
 
#17
The Telegraph article from Martin Lewis is a cut and paste from an article he published on Money Saving Expert a while back.
Quite why he needs the Telegraphs geld as a hack, when he pocketed £28 million from the sale of Moneysavingexpert, is beyond me.....hopes of a political career perhaps, or just the vanity of celebrity and to see his picture in the papers?

What he deliberately ignores is the simple truth that 21K a year is a piss poor wage, and implies that if you earn more than that you should be grateful.

Of course they could do away with with student loans repayment style and just levy a Graduate tax at x% rate for anyone who has had the benefit of a University education.

But then the treasury and HMRC control taxation which is applicable across the UK. To mean that powers have not been devolved to Edinburgh or Cardiff.

The Graduate Tax would seem the sensible solution, those who benefit pay a little extra back across their working lives but politics demand it has to be a complicated compound interest loan system.
That will explain his "new wife" then.

 
#18
Of course they could do away with with student loans repayment style and just levy a Graduate tax at x% rate for anyone who has had the benefit of a University education.

But then the treasury and HMRC control taxation which is applicable across the UK. To mean that powers have not been devolved to Edinburgh or Cardiff.

The Graduate Tax would seem the sensible solution, those who benefit pay a little extra back across their working lives but politics demand it has to be a complicated compound interest loan system.
Once upon a time, before some vacuous f**kwit decided that the ONLY further education worth banging on about was the "Degree". Graduates, because they were relatively rare in the job market, got a reasonable job paying a reasonable wage and started climbing the greasy pole of their respective careers. At the end of said career they generally paid much more tax than their non degree qualified counterpart. More than the cost of their course, be it 3 years or one of those never ending medical degrees. Then some complete f**kwit had a bright idea but didn't bother to think it through further than "What headline in the press will that get me?"

The current system is f**ked beyond belief because nobody has the balls to admit it's f**ked and no-one has the wit to think further than the next opinion poll.
 
#19
The whole point of doing a degree is to get a better job than otherwise.

Unless 'better' is wholly vocational, such as becoming a vicar, it will inevitably lead to the graduate increasing their lifetime earnings and hence paying far more income tax overall than would be needed to simply cover the cost of their course.
 

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