Do you think Student Finance is FAIR?

Poll

Is Student Finance FAIR?

Yes - People get what they need, not what they want No - The system is outbalanced and needs adjusting Not Sure Yes - 'Higher income' families should help their children through Uni No - Everyone should get equal amounts, it is a LOAN after all

justanothertechie

Student Finance, as you will probably know, currently bases your payments on the amount that your household makes a year. As a standard 'lower income' households, £25,000 or less, are entitled to a Loan and Grant whilst 'higher' income households can usually only receive the loan. According to SF, this is because it is "assumed" that a student who comes from a 'higher income household' will receive financial support from parents or guardians.

Assumed. A little word. A big meaning. An even bigger impact.

But really, SF (or lets be honest, the Government), should our parents income make a difference? I argue not.

In September, regardless of household income, freshers will begin for students up and down the country. At this very pivotal point, each and every one of them has the same challenges and needs.

For instance, for the next three years, each and everyone of them will need somewhere to live. Correct.

Each and everyone of them will need to eat and drink. Correct.

Each and everyone one of them has the same chances of coming out with a first class degree and, equally, will (assuming!) come out with the same degree. Therefore, they will more or less be in the same position come 2017.

So, what does household income have to do with any of that?

In a surprisingly common amount of cases, students loans won't even cover the cost of their accommodation, forcing them to work ridiculous numbers of hours in Part Time work. Whereas students deemed from a 'lower income' household receive loans and grants that can mean they don't need to work at all.

I believe, that when it forces students to decide between food or shelter, that it has become fundamentally flawed.

What do you think? Is the system fair? Unbalanced? Flawed?

Reply 1

Arkasia

Posted elsewhere but I will repost here for sake of adding to the public thread.

Personally, I think if anything needs to change with student loans, it is the need to scrap a system in which a student is unable to repay the loan instantly in one lump sum. The fact is, there are too many young adults coming out of university with a degree, unable to find a job in an increasingly competitive market, and with a £50,000-£100,000+ debt on their backs for when they do find a job.

Indeed, I believe you only start paying back the loans after you are earning a yearly income of £21,000, so about 45% (based on latest figures) of student loans are not fully paid back, causing massive issues. Indeed, if this number rises by only 4% more (which is very possible), then the government will start making losses on the money they were previously making from raising the tuition fees to £9000 a year.

Summarily, I believe it is the system that needs changing, not the pragmatic ideology behind it.

Reply 2

Xyloid

It is not fair.

The assumption that people's parents should provide them with money if they earn over a certain amount doesn't legally obligate them to do so.

Some parents refuse to provide funding, or provide very little. You get others who pay for everything or contribute substantially.

Everyone should be given the chance to claim the same amount, and it should then be up to the student to decide how much he or she wants to take up as a loan depending on how much they feel their parents will support them.

Reply 3

Jeff Winger

It is not fair.
Just because I am just over the upper limit line, I don't even get enough money to pay for my accommodation, never mind things such as food and books. And as I'm just over the max line, my parents aren't loaded and able to dish out money to me all the time so i've got to struggle by. However, there's a girl in my building who, when her loan comes in, puts £300 straight into her savings and then has £60 a week to spend on whatever. I know another guy who is spending 5 weeks in Asia this summer thanks to his student loan, whilst i'm out desperately searching for a summer job just to pay for next year's food. Yes, they will have more to pay back, but a lot of it is grants which they will not have to.

I think all students should be entitled to claim the same amount and that you can borrow as much as you feel you need, like Xyloid said above.

(edited 10 years ago)

Reply 4

balotelli12

This has been discussed so many times!!

It is not perfect but in any system that has limited finance it is very fair.

Jeff your folks are on over £60K a year!

Winger by name, winger by nature.

(edited 10 years ago)

Reply 5

balotelli12

Original post by BenAssirati

you can pay your loan off in one lump sum!

Where did you get the idiotic idea that you couldn't?

Reply 6

Arkasia

Original post by balotelli12

you can pay your loan off in one lump sum!

Where did you get the idiotic idea that you couldn't?

Firstly, don't call it idiotic simply because you disagree. It is rude and makes you seem petty.

It is incredibly hard to pay back student loans in one lump sum, and could often lead to the upfront payment costing more than the eventual debt repayment. Also, most people who take out student loans do so because they can't afford to pay straight away, that's the point of them having the money loaned to them. Again, many people avoid paying up front AND paying via a tax rate of 41% by simply earning under £20,000 a year. Further, all my data and ideas are from either the government website, or verified sources.

Reply 7

Klix88

Original post by BenAssirati

It is incredibly hard to pay back student loans in one lump sum, and could often lead to the upfront payment costing more than the eventual debt repayment.

How so? The online Student Loan Repayment system allows you to make one-off additional payments at any time. If I won the lottery tomorrow, I could just log into the system, make the payment for the outstanding balance and the loan's cleared. Or have I misunderstood?

http://www.studentloanrepayment.co.uk/pls/portal/docs/PAGE/RPIPG001/RPIPS001/RPIPS006/SFE_T_C_GUIDE_1314_D.PDF

Making extra repayments

You can pay off your loan more quickly by making extra repayments voluntarily. You can do this anytime at:
www.studentloanrepayment.co.uk
If you do choose to make additional voluntary repayments directly to SLC, you’ll repay your loan off more quickly.

Reply 8

Arkasia

Original post by Klix88

Because unless you end up earning over 40k a year, you will be repaying more than you would otherwise have. Also, referring to my previous point, it is incredibly hard for people who would have to take out a loan to be able to find the spare cash to repay it all at once.

Reply 9

Klix88

Original post by BenAssirati

Ah - I think we're having two separate conversations. The first part of your statement was

It is incredibly hard to pay back student loans in one lump sum

From an actual "getting the money to SF" point of view it's actually very easy, which is the point I was addressing.

Whether it's desirable to do so or even financially possible (the second part of your statement) is another matter. Laying your hands on a spare £30k+ isn't going to be easy for most people, although you can overpay in small amounts if you have the income to do it. Sadly the decision on whether to do so depends on being able to predict your personal earnings profile over the next 25/30 years (depending on whether you're on the old or new SF repayment scheme), which very few people can do. I certainly couldn't have anticipated my wage at 40, when I was 22.

Reply 10

balotelli12

All whining rich kids please read this and see how badly off most of the population are compared to you

http://www.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

Reply 11

Arkasia

Original post by Klix88

Ah - I think we're having two separate conversations. The first part of your statement was

From an actual "getting the money to SF" point of view it's actually very easy, which is the point I was addressing.

Whether it's desirable to do so or even financially possible (the second part of your statement) is another matter. Laying your hands on a spare £30k+ isn't going to be easy for most people, although you can overpay in small amounts if you have the income to do it. Sadly the decision on whether to do so depends on being able to predict your personal earnings profile over the next 25/30 years (depending on whether you're on the old or new SF repayment scheme), which very few people can do. I certainly couldn't have anticipated my wage at 40, when I was 22.

Ah well if we are debating (money and background set aside) whether it is POSSIBLE to pay it back, then yes, I agree, it would be very easy. But in a realistic world it isn't for most people, if you see where I am coming from?

Reply 12

Katie_p

Original post by balotelli12

All whining rich kids please read this and see how badly off most of the population are compared to you

http://www.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

The thing is, as students, this is useless because it just shows how "badly off" the population are compared to our parents.
I can't even see how my family compares because we're a three-child family.

Reply 13

Klix88

Original post by BenAssirati

Absolutely. An alternative approach would be to make small overpayments whenever there's spare cash around (if you're lucky enough to be in that position). I did this with my mortgage - sometimes £20 a month, sometimes more, sometimes nothing - and I ended up paying it off 7 years early and saving myself a pile of interest. My wages increased as I got older and moved through my career, gradually giving me more of a surplus to use. It's the kind of strategy which needn't be financially painful but can be pretty helpful in the longer term.

Reply 14

Tillybop

Original post by balotelli12

All whining rich kids please read this and see how badly off most of the population are compared to you

http://www.theguardian.com/money/2014/mar/25/uk-incomes-how-salary-compare

Sorry but we're not all whining rich kids. My dad's wage takes me into the higher band - and yeah they worked hard to get there! But they get taxed 40% so we get in total only about £7,000 more a year than you do on benefits a year (for 40+ hours of work per week). They don't take into consideration the amount removed by tax, which means that my family according to your tables on that link put my family in the second or third decile, just above the bottom (2 adults, 2 children). And from most unis they offer £50 for the entire year on a maintenance loan. So no we don't actually get what you think we get. And it doesn't mean that they can just give it all to me. It's my parents money not mine. And for those reasons it means I cannot go to university, because neither my parents or myself can afford accommodation or transport. While people on a low income will be given bucket loads of support and have no worries when they leave for uni, because their loans covers a good portion of their living costs.