Uni fees may rise up to 20K

Privatisation of Student loan company and retrospective interest hike... *cough cough* or at least that's what the demonstrations a week on Wednesday are going to be for...

And it feels like very real money to me... it's money that I won't be earning but will still be working for... Though with 9K fees manypeople will never pay it off anyway...

Take medicine and dentistry with the highest average graduate lifetime salary at £41,624 (source - Daily Telegraph online) so -20% tax and a bit for NI this becomes about £32000 so SLC takes each year 10% of this which is £3200 ok so take your average student loan as max maintenance and living costs for a 3 year course which is £37725 so the fees are payed off after 12 years. SLC makes a net profit.

However the average grad lifetime salary is in fact apparently lower than this
http://ww2.prospects.ac.uk/cms/ShowPage/Home_page/Main_menu___Research/Labour_market_information/Labour_market_FAQs/How_do_graduate_and_non_graduate_salaries_compare_/p!elkFpLg
coming out over a year to be £28929 so that means by the same maths that SLC get around £2200 a year, fine gets payed off in full eventually.

Ok now lets say fees rise to £20000, now your 3 year course loan comes out to over 60K and you only pay back for 30 years after you graduate... so SLC makes a net loss (taking inflation over 30 years into account)... As SLC is now privatised then it goes bust or is renationalised and that is not sustainable in the long run... Even if it isn't privatised it is still unsustainable.

The 9% is pre tax/NI not post.

Retrospective interest rate hike? huh? Thats just stuff made up isn't it? They aren't even privatising all of it, more like a third of it.

The loans and the SLC are different, the SLC just does admin, it doesn't hold the loan revenue, that goes to HMRC.

so I'd essentially just have debt for no reason.

I'm not sure. I think it's a bit cheeky if theu did rise it up that much and I think a lot of people would noy want to go as a result.

So that?

People thought that when fees were introduced, when they rose to 3k, when they rose to 9k - didn't happen...

Can you cite that please, I haven't seen the figures are you saying there has been no decrease? Also I think theres a big difference between 20k and 9k

Can you cite that please, I haven't seen the figures are you saying there has been no decrease? Also I think theres a big difference between 20k and 9k

Take medicine and dentistry with the highest average graduate lifetime salary at £32000 so SLC takes each year 10% of this which is £3200 ok so take your average student loan as max maintenance and living costs for a 3 year course which is £37725 so the fees are payed off after 12 years. SLC makes a net profit.

However the average grad lifetime salary is in fact apparently lower than this £28929 so that means by the same maths that SLC get around £2200 a year, fine gets payed off in full eventually.

Loans are only repaid with income OVER the threshold. My loan is 9% of earnings above £15k for example. If I earned £16k a year, my repayments would be £90 per year, not £1,440.

True that... and with the threshold now at £21,000 that means that it becomes quite unsustainable...

I believe there was a decrease in the first application cycle following the introduction of top up fees in 2006, but application numbers soon recovered and continued to record levels each year.

How do you mean 'unsustainable'?

Each year the income from student loans the Government gets rises as an additional year of graduates fall into repayments (which will drive revenue up for the next 20 years) and graduates in repayment see rises in their income, which will happen indefinitely.

Meanwhile the amount the Government spends will rise with inflation.

Each and every year payment for higher education by Government gets more and more sustainable.

People failing to completely pay off their student loans in the long run.

So what...?

As long as the revenue from loans doesn't go down, what does it matter?

As long as students can get a loan to cover the costs, which gets written off after a certain amount of time, they will continue to go - because it doesn't feel like "real money". If anything, it feels like getting paid if you have anything left over from your loan, and it still feels like an easier option than getting a job for a few years.

Say I lend you £100 with 5% interest. Until you have paid back the original £100 I haven't made any money on it at all. That is the crux of the issue. The revenue itself is irrelevant if it is less than the costs. So say I now lend out £100 to 100 people who each only pay back £99 I get a £100 loss and the more people who borrow money and fail to pay it back the greater my loss. Now I suddenly lend them £200 each but they are now earning a bit more and can pay back £150 I make a loss of £5000 etc.

Say I lend you £100 with 5% interest. Until you have paid back the original £100 I haven't made any money on it at all. That is the crux of the issue. The revenue itself is irrelevant if it is less than the costs. So say I now lend out £100 to 100 people who each only pay back £99 I get a £100 loss and the more people who borrow money and fail to pay it back the greater my loss. Now I suddenly lend them £200 each but they are now earning a bit more and can pay back £150 I make a loss of £5000 etc.

These aren't traditional loans, the repayment approach is such that the state can never make a profit. Actually thats simplifying things given with 9k fees there will be different interest rates for different earners, but its still set up that the state makes 'a loss' on the loans themselves.

You are entirely forgetting all other forms of tax, grads with better jobs they'd have otherwise had pay more NI/Income Tax/VAT, the companies they work for pay more corporation tax etc.

The loans are designed to bring in more revenue overall.

Edit
Oh and you're forgetting the state used to pay everything and just get the tax, they were 'losing' much more then - they 'lost' everything.