New Debt Crisis

[Jonny5]

Because it is the primary way of getting fees income from UK students. They don’t really have a choice.

 

---------- Post added 04-09-2018 at 08:03 ----------

 

 

As you said earlier, just make it a tax.

 

There is no need for a student loan to be tied to a debt vehicle. Apart from of course the monetisation of the debt and the opportunity to parcel up parts of the loan book for sale to private third parties, with variance of the terms possible at any time.

 

The psychological impact of these debts on ex-students is very real. And some elements of the system are highly intrusive, for example having to apply suspend payments if you leave the country for an extended period. And of course the existence of a fines regimen, use of debt collection agencies etc...

Current students as well. Its all well and good saying the payment isn't that much when you have a (good) job.

However if you are studying and desperately trying to get a good degree whilst having an accumulating debt of what to a 18 to 21 year old must seem enormous...

 

They must feel under huge pressure.

[Obelix]

Non-EU International students generally pay their fees as they go, by whatever means. They are not eligible for the loans.

 

EU students on the other hand are eligible. There are obviously longer term questions about that continued eligibility after Brexit, but it would be wrong to impose on U.K. students a flawed system in order to cover what is after all a small proportion of students. Brexit is I think you’d argue about doing what is right for U.K. citizens?

 

---------- Post added 04-09-2018 at 09:18 ----------

 

 

The contract allows for terms to be changed - and that has happened before.

 

There is nothing that sets the terms in stone for the whole period of the agreement.

You are aware that if a contract says a fixed interest rate (which isn't the RPI+3% btw its 1%...) and thats changed then the contract is unenforceable yes?

 

As I say - if the Govt decided to try this the courts would object.

[sheffbag]

Look on Money Saving Expert. Do you want the link.

 

Lays out the reality.

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

 

Theres the link i assume you are talking about. Look at headline for point 18

 

"The student loan isn't a debt;"

 

I can see where you get your £154K payment from looking at the table in point 5 but if you look at that table you are basing it on earning 50K from day 1 of leaving university, now i dont know about you but i dont know many 23 year olds earning 50K. It also uses the striaght forward compound interest on your wage giving a final wage of £196K a year. Now if i was earning that much then i wouldnt have a problem paying my way. Even if you stayed at 50K a year you still earn 1.5 Million pre tax in the 30 years you spend paying the loan back.

 

You said in an earlier post that Martin Lewis calls it a debt. That is wrong. He is very vocal about it not been a debt so i would like to see where you get this from. Examples of him saying its not a debt are in the link above

 

https://www.ft.com/content/d3b9eb0e-601f-11e8-ab47-8fd33f423c09

and this in the financial times

 

or if you missed him on question time destroy a Labour MP panelist who called it a debt

 

Particularly the bit from 29 to 46 seconds where he explains it clearly about the payment vs level of loan

Borrow 20K earn 30K - you pay £450 a year

Borrow 50K earn 30K - you pay £450 a year

Borrow £3 million earn 30K - you pay £450 a year

 

The amount outstanding is immaterial.

 

Martin Lewis does not call a student loan as a debt. He actually thinks that the loans should be bigger to help students

 

Please read and listen then comment if you still think he does think its a debt and back it up with evidence

Edited September 4, 2018 by sheffbag

[Ms Macbeth]

I wonder how many of those living on very low incomes are concerned about student loans? This thread seems to be focussing on those perhaps too much?

 

Sanctions, zero hours, high interest loans, expensive rents plus an element of entitlement to non necessities have all combined to put some people into dire circumstances.

 

Whilst I accept some people are in absolute poverty, on the street, no benefits etc., the relative poverty measurement doesn't paint a clear picture. One household can have exactly the same income as another, yet their standard of living is quite different, often because of debt, or their spending choices. To get a real picture, every case would need to be looked at individually.

Edited September 4, 2018 by Ms Macbeth

[Robin-H]

Non-EU International students generally pay their fees as they go, by whatever means. They are not eligible for the loans.

 

EU students on the other hand are eligible. There are obviously longer term questions about that continued eligibility after Brexit, but it would be wrong to impose on U.K. students a flawed system in order to cover what is after all a small proportion of students. Brexit is I think you’d argue about doing what is right for U.K. citizens?

 

---------- Post added 04-09-2018 at 09:18 ----------

 

 

The contract allows for terms to be changed - and that has happened before.

 

There is nothing that sets the terms in stone for the whole period of the agreement.

 

But how would you set what the fees for the international students are? They wouldn’t have a lifetime of extra tax to pay, and so I’m not sure how you’d work out what was a fair price.

[ez8004]

Current students as well. Its all well and good saying the payment isn't that much when you have a (good) job.

However if you are studying and desperately trying to get a good degree whilst having an accumulating debt of what to a 18 to 21 year old must seem enormous...

 

They must feel under huge pressure.

 

Then the student in question must be stupid. It has been demonstrated and explained how the student loan is not considered a debt. It doesn’t even show up on your credit file!

[I1L2T3]

You are aware that if a contract says a fixed interest rate (which isn't the RPI+3% btw its 1%...) and thats changed then the contract is unenforceable yes?

 

As I say - if the Govt decided to try this the courts would object.

 

Terms can be changed by Parliament. All the necessary provisions are in place to do so.

 

In practical terms you are correct that it would take a brave government to force it through. But quite honestly, relying on the goodwill at least the next six parliaments....well I would not be comfortable with that.

[Obelix]

Terms can be changed by Parliament. All the necessary provisions are in place to do so.

 

In practical terms you are correct that it would take a brave government to force it through. But quite honestly, relying on the goodwill at least the next six parliaments....well I would not be comfortable with that.

 

I'm glad you finally accept that.

[I1L2T3]

https://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

 

Theres the link i assume you are talking about. Look at headline for point 18

 

"The student loan isn't a debt;"

 

I can see where you get your £154K payment from looking at the table in point 5 but if you look at that table you are basing it on earning 50K from day 1 of leaving university, now i dont know about you but i dont know many 23 year olds earning 50K. It also uses the striaght forward compound interest on your wage giving a final wage of £196K a year. Now if i was earning that much then i wouldnt have a problem paying my way. Even if you stayed at 50K a year you still earn 1.5 Million pre tax in the 30 years you spend paying the loan back.

 

You said in an earlier post that Martin Lewis calls it a debt. That is wrong. He is very vocal about it not been a debt so i would like to see where you get this from. Examples of him saying its not a debt are in the link above

 

https://www.ft.com/content/d3b9eb0e-601f-11e8-ab47-8fd33f423c09

and this in the financial times

 

or if you missed him on question time destroy a Labour MP panelist who called it a debt

 

Particularly the bit from 29 to 46 seconds where he explains it clearly about the payment vs level of loan

Borrow 20K earn 30K - you pay £450 a year

Borrow 50K earn 30K - you pay £450 a year

Borrow £3 million earn 30K - you pay £450 a year

 

The amount outstanding is immaterial.

 

Martin Lewis does not call a student loan as a debt. He actually thinks that the loans should be bigger to help students

 

Please read and listen then comment if you still think he does think its a debt and back it up with evidence

 

He describes it as a very preferential form of debt.

 

I watched that question time episode as it happens and it made me angry, because of the subtext and something I’m driving towards in the context of this thread: the normalisation of debt for young people.

[truman]

He describes it as a very preferential form of debt.

 

I watched that question time episode as it happens and it made me angry, because of the subtext and something I’m driving towards in the context of this thread: the normalisation of debt for young people.

 

Don't you think that students should invest some of their own money into their futures?