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# with the new fees, is going to university even worth it?

Discussion and questions about student financial support arrangements - from government loans and grants to university bursaries. Please use the main Money & Finance forum for more general financial topics.

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1. Re: with the new fees, is going to university even worth it?
How much money you're going to have to pay back isn't actually the issue. It's worth the money if you MAKE it worth it.

ie, if you're giving up a good degree at a good uni to go and do a pointless degree, don't. when paying £9,000 a year, you should be thinking about doing a degree that would be worth your while in the long term. What are you doing now, and what do you want to change to? How do you know you won't want to drop out of that too?
2. Re: with the new fees, is going to university even worth it?
(Original post by Shani)
It's amazing how bath some people's maths is!

You pay back 9% of whatever you earn above 21k. If you earn 22k, you will pay 9% of 1k. If you earn 30k, you will pay 9% of 9k. If you earn 50k, you will pay 9% of 29k.

Currently, the tax code is 747L. Which means EVERYONE can earn £7475 a year before paying any tax. In April the personal tax allowance is going up around £500.

Between the personal tax allowance and 35k you will pay 20% tax, and between 35k and 150k you will pay 40% tax.

Also, no one seems to have mentioned NI contributions. For earnings above £5304 a year 12% is taken in NI contributions (not quite that clear cut but for this example this is the figure I will use).

So, for the OP's example of £40,000.

Student Loan
£40,000 - £21,000 = £19,000
9% of £19,000 = £1710

Income Tax
£35,000 - £7475 = £27525 @ 20% tax = £5505
Remaining £5000 @ 40% tax = £2000

NI contributions
£40,000 - £5300 = £34.700 @ 12% NI = £4164 NI

So, £40,000 - £1710 (student loan) - £5505 (basic tax) - £2000 (upper tax) - £4614 (NI)

= £26,171 p.a. Or, £2180.91 per month. (may not be acurate to the penny but a lot more accurate than £1333 a month!)

If you didn't have a Student Loan to pay back you would be getting £2323 a month. You just gotta decide if that £142.50 a month you're paying back on a student loan is worth the higher chance of getting a higher salary.
You've made a mistake, the £35000 limit for lower rate tax is on top of your tax free allowance. You start paying higher rate tax on £35000 + £7475 = £42475. So on £40k per year you don't pay any higher rate tax.

So you can knock off about £1000 tax per year, i.e. bring home about an extra £80 per month.
3. Re: with the new fees, is going to university even worth it?
(Original post by Mbob)
You've made a mistake, the £35000 limit for lower rate tax is on top of your tax free allowance. You start paying higher rate tax on £35000 + £7475 = £42475. So on £40k per year you don't pay any higher rate tax.

So you can knock off about £1000 tax per year, i.e. bring home about an extra £80 per month.
Thanks for pointing that out, I knew there was something I hadn't considered! That'll teach me for coming on TSR before I've had my morning caffeine dose
4. Re: with the new fees, is going to university even worth it?
There's some shocking inaccuracies on many posts in this thread - OP and responses! The lesson is to consult a qualified tax accountant if you want reliable advice.

I'm not an expert, but it seems obvious to me that the average worker wouldn't normally pay 40% tax on an income of £40,000 and take home pay for 2011/12 would have been roughly £2,400 pm after income tax and NI contributions.

This scenario is well above the average salary of £26,000 and anyone earning this should consider themselves very lucky indeed.
5. Re: with the new fees, is going to university even worth it?
(Original post by Darth Stewie)
ah forgot about the before tax amount, but yeh think if the government taxed 40% on the entire salary this country would empty pretty quickly
Sorry for bugging you, I'm still so confused.

So, say I earned 30,000 a year... I'd end up paying 810 a month because 9% of 9000 is 810?
6. Re: with the new fees, is going to university even worth it?
(Original post by ellasmith)
Sorry for bugging you, I'm still so confused.

So, say I earned 30,000 a year... I'd end up paying 810 a month because 9% of 9000 is 810?
np

you would pay 810 a year, £67.5 a month

so after all tax/fees you would be taking home around about £2071 a month from a 30k salary
7. Re: with the new fees, is going to university even worth it?
(Original post by ellasmith)
Student tax is not a set rate of 9% of 21000, its 9% of whatever you earn so 9% of 40000 is 4320... That's the grad tax being paid

Maths a bit out there. I think thats nearer 11%.
8. Re: with the new fees, is going to university even worth it?
people argue that university degrees result in higher salaries

so the question is do you want to enter a low paying industry without having to pay tuition fees, or enter a higher paying industry at the cost of paying tuition fees?
9. Re: with the new fees, is going to university even worth it?
(Original post by viksta1000)
people argue that university degrees result in higher salaries

so the question is do you want to enter a low paying industry without having to pay tuition fees, or enter a higher paying industry at the cost of paying tuition fees?
According to government figures a man with a degree in history or philosophy will earn (after taking into account tuition fees etc) on average over his lifetime £1,395 more than a non-graduate. A man with a degree in art or design will earn £15,302 less than a non-graduate.

http://www.bis.gov.uk/assets/biscore...ifications.pdf

See table 20
10. Re: with the new fees, is going to university even worth it?
(Original post by ellasmith)
Sorry for bugging you, I'm still so confused.

So, say I earned 30,000 a year... I'd end up paying 810 a month because 9% of 9000 is 810?
youre an idiot are you doing a dance degree or something? flipping heck. youre worried about money, but yet you cant do basic numbers. my 2 year old kid could work this out!
11. Re: with the new fees, is going to university even worth it?
(Original post by nulli tertius)
According to government figures a man with a degree in history or philosophy will earn (after taking into account tuition fees etc) on average over his lifetime £1,395 more than a non-graduate. A man with a degree in art or design will earn £15,302 less than a non-graduate.

http://www.bis.gov.uk/assets/biscore...ifications.pdf

See table 20
with the average Net Graduate Premium being £120,512, also, Arts and Design is the only degree that results in a net loss to an individual according to the table...all others result in a net gain, whether it be £1000, or £100,000, the fact of the matter is that a degree results in higher earnings in all but one of cases!
12. Re: with the new fees, is going to university even worth it?
(Original post by sharp910sh)
youre an idiot are you doing a dance degree or something? flipping heck. youre worried about money, but yet you cant do basic numbers. my 2 year old kid could work this out!
Wow, thank you that was a nice start to my day.
13. Re: with the new fees, is going to university even worth it?
(Original post by ellasmith)
Wow, thank you that was a nice start to my day.
My two year old kid isnt even that intelligent...

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