[Y333EEE]

Right the answer to this may be simple but i've googled it and can't find any relevant information plus i don't know a great deal about this subject.

Where does the company that does student finance get its money from?
It funds many thousands of students to go to uni each year by paying their tuition fees and giving them maintainence loans but i cannot see where it gets all of this money from in the first place. It obviously doesn't get a great deal of it back through re-payments as a large amount of student debt never gets paid back. Does the government contribute to it through the taxpayer or something like that?

Also, if the above is correct and they just get the money from no-where, will the whole system go to pot in a few years?
If they are making a loss on every loan they make how will it be sustainable if a vast majority of them pay back less than they took out? I'm fairly sure i'm missing something and the answer may be very simple but i genuinely, hand on heart, cannot find any relevant information on the subject. Any serious answers you could give would be much appreciated, thank you.

[Zerforax]

It will be Government backed.

Might have been contracted out to Student Loan Company but the government cannot allow it to fail and would step in.

[The_Jakal]

This is one of the best questions I have ever seen on TSR and it's great to finally see someone realising that the government could be worse off than students with the new system.

Basically, the gvt. stand to get less back from students under the new system if unemployment stays as it is. Once again they seem to have gone for the short term solution.

[Y333EEE]

Just done some more research on this on Google and the average graduate starting salary is £20962. Correct me if i'm wrong, but under the new system does one not have to start paying back their loans until they have earnt £21000. Even if they do earn over £21000, the amount they pay back is so miniscule that the loans company may only recieve several thousand pounds back before the debt gets written off after 30 years. Considering that a large amount of student loans are never fully paid back, the company that handles the student loans must be making a big loss on the amount that they are loaning students. Plus, I still have no idea where they are getting this money to pay for all of the tuition fees from, so will the whole system go to pot in a few years?

[FelineCostumier]

Here's a few hours worth of reading for you to kill, knock yourself out and report back to everyone who didn't find this info. Immediately came up when I Googled.

http://www.slc.co.uk/about-us/remit.aspx

[OU Student]

(Original post by Y333EEE)
Just done some more research on this on Google and the average graduate starting salary is £20962. Correct me if i'm wrong, but under the new system does one not have to start paying back their loans until they have earnt £21000.

That's right. Those of us under the old system pay it back when we earn £15k+. However, we have no interest added - it's just inflation.

[lukejenx]

Student finance isn't about making money, it is about educating people. So even if one person gets through Uni yet only gets a 20k a year job, the student finance team have technically done their job. If nobody had more than 21k jobs then yes it would suffer.

[tsnake23]

(Original post by Y333EEE)
Just done some more research on this on Google and the average graduate starting salary is £20962. Correct me if i'm wrong, but under the new system does one not have to start paying back their loans until they have earnt £21000. Even if they do earn over £21000, the amount they pay back is so miniscule that the loans company may only recieve several thousand pounds back before the debt gets written off after 30 years. Considering that a large amount of student loans are never fully paid back, the company that handles the student loans must be making a big loss on the amount that they are loaning students. Plus, I still have no idea where they are getting this money to pay for all of the tuition fees from, so will the whole system go to pot in a few years?

If your starting on 21k in a skilled graduate job then its extremely unlikely that your only going to receive inflation based salary increases for the next 30 years. Most likely your going to receive over inflationary increases as your get promoted.

And I'm not sure where your getting your information on Google but the average graduate salary in 2012 is likely higher than that.

[xander93]

(Original post by The_Jakal)
This is one of the best questions I have ever seen on TSR and it's great to finally see someone realising that the government could be worse off than students with the new system.

Basically, the gvt. stand to get less back from students under the new system if unemployment stays as it is. Once again they seem to have gone for the short term solution.

Well, not really. You have to remember, university fees used to be completely free. The government is still raking in money (in fact it's highly unlikely that your fees will have been got rid of before you are 50) so there's no real loss.