New Debt Crisis

[truman]

Some sort of legislation to make sure the same crisis as before didn't arise again. They deregulated the industry and didn't listen to the warnings, so should have reversed that at least. Or, better still, do something to deter the bankers from getting bonus greedy again.

 

Or they could have slapped some regulations on rents to stop them rising to unaffordable levels, so people wouldn't need to borrow.

 

Seems like nothing's changed.

 

You've obviously not tried to get a mortgage recently...

[ez8004]

You owe money. It accrues interest. It stays with you for decades. It goes straight out your wages. You have to pay it back. It’s everything like a debt.

 

I know couples who pay £400-500 a month between them in repayment.

 

It may not stop you getting a mortgage but it impacts how much you can repay. It may not stop you getting a credit card but it impacts who much you can repay.

 

It’s easy to be complacent in times of low interest rates, but if we did face a big rise in interest rates these loans could cripple many families.

 

I’ll ask again, do the maths and work it out. The amount you repay is dependent on your salary and you do not repay it all back. Not even remotely unless you earn a lot. So it is dependent on your ability to pay. Not to mention, it gets written off after a certain time.

 

I’ll say it again, it is NOTHING like a debt. The way it is structured it is more like a tax. If you can’t see that then you really have no clue.

[I1L2T3]

I’ll ask again, do the maths and work it out. The amount you repay is dependent on your salary and you do not repay it all back. Not even remotely unless you earn a lot. So it is dependent on your ability to pay. Not to mention, it gets written off after a certain time.

 

I’ll say it again, it is NOTHING like a debt. The way it is structured it is more like a tax. If you can’t see that then you really have no clue.

 

You get a statement. It tells you what you owe. You accrue interest on what you owe.

 

If you take the max maintenance loan and fees loan then even if you earn £45k a year it takes 30 years to pay it back, and the total repayments are £140k on borrowing of £60k

 

For the love of Jesus, please explain how that is nothing like a debt. If you think it isn’t youre an idiot. Seriously.

[Cyclone]

You owe money. It accrues interest. It stays with you for decades. It goes straight out your wages. You have to pay it back. It’s everything like a debt.

 

I know couples who pay £400-500 a month between them in repayment.

 

It may not stop you getting a mortgage but it impacts how much you can repay. It may not stop you getting a credit card but it impacts who much you can repay.

 

It’s easy to be complacent in times of low interest rates, but if we did face a big rise in interest rates these loans could cripple many families.

 

It gets written off at the age of 55 or 60, irrespective of what is owed. The amount you pay is dependant on how much you earn, with a large allowance before anything is charged.

It's not considered for credit history, although it is an expense (much like PAYE) and so your net income after this cost is considered for loan purposes.

The rate of repayment is entirely divorced from the prevailing interest rates of the day and basically irrelevant to the 80% of (recent) graduates who will never pay it off and who will pay it much like PAYE until they reach a certain age.

It's actually much more like a tax.

 

---------- Post added 01-09-2018 at 12:46 ----------

 

i remember my first mortgage at that time when interest rates were 14-15% wow if that happens now there would be disaster, but back then we borrowed what we could afford unlike now where people take on far more than they could ever afford because they feel entitled!!!

 

You realise that people can't decide how much to borrow, the banks decide an upper limit and they're legally obliged (now) to make sure it's repayable even in the event of interest rate increases. (Obviously they can't control circumstances or how people budget, but they HAVE to look at affordability).

[I1L2T3]

It gets written off at the age of 55 or 60, irrespective of what is owed. The amount you pay is dependant on how much you earn, with a large allowance before anything is charged.

It's not considered for credit history, although it is an expense (much like PAYE) and so your net income after this cost is considered for loan purposes.

The rate of repayment is entirely divorced from the prevailing interest rates of the day and basically irrelevant to the 80% of (recent) graduates who will never pay it off and who will pay it much like PAYE until they reach a certain age.

It's actually much more like a tax.

 

---------- Post added 01-09-2018 at 12:46 ----------

 

 

You realise that people can't decide how much to borrow, the banks decide an upper limit and they're legally obliged (now) to make sure it's repayable even in the event of interest rate increases. (Obviously they can't control circumstances or how people budget, but they HAVE to look at affordability).

 

The payments are structured like a tax but those payments are pinned to a very real debt.

 

Even the SLC describes the loans as debt.

 

https://www.slc.co.uk/official-statistics/student-loans-debt-and-repayment/england.aspx

[Cyclone]

I don't disagree, but they way the payments work it might as well just be called a graduate tax and applied equally to all graduates until 55.

Of course that wouldn't favour rich families who can avoid it by paying the fees and living costs themselves, saving their children tens of thousands in 'tax' that exists because of interest charged on the debt.

[I1L2T3]

I don't disagree, but they way the payments work it might as well just be called a graduate tax and applied equally to all graduates until 55.

Of course that wouldn't favour rich families who can avoid it by paying the fees and living costs themselves, saving their children tens of thousands in 'tax' that exists because of interest charged on the debt.

 

Indeed, that would be the sensible and fair thing to do.

 

There is no need to pin repayments to a debt vehicle.

 

Just fund the universities, mark the students’ tax records and collect later.

[Cyclone]

Might as well backdate it. Why should I get away without it, I got a degree basically for free. 1 loan for £1500, but I'd had 4 years of grants which came to more than that!

[Anna B]

I don't disagree, but they way the payments work it might as well just be called a graduate tax and applied equally to all graduates until 55.

Of course that wouldn't favour rich families who can avoid it by paying the fees and living costs themselves, saving their children tens of thousands in 'tax' that exists because of interest charged on the debt.

 

That's probably exactly why they didn't go down that route, knowing that children of rich (and influential,) families will get the best jobs and have to pay extra tax on paying 6 and 7 figure salaries. and have to pay more tax

 

Let all the minions pay extortionate fees which don't bother the wealthy, and the rich and influential will then have nothig to worry about.

[ez8004]

Might as well backdate it. Why should I get away without it, I got a degree basically for free. 1 loan for £1500, but I'd had 4 years of grants which came to more than that!

 

Because laws are never retrospective, maybe?

 

Do you not know anything?