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    (Original post by jb9191)
    Learn to read the whole thread before jumping down peoples throats. I rectified my error.

    On £27,000 per year you'd be £6000 over the threshold.

    9% of £6000 is £540 each year.

    Over 30 years of £540 payments that covers £16,200.

    Well below the amount of debt obtained leaving the country in deficit.
    Basically, you'd have to be on a salary of £33,000 per year to pay back £32,400 over 30 years. as you'd be £12000 over the threshold.

    9% of 12000 = £1080 per year x 30 = £32,400.

    Still below the debt I estimated earlier.

    The majority of students will not pay the entire loan back meaning the country will be deep in the **** again. Which we'll then have to pay tax as graduates to sort out.


    Basically, to pay back £32,400 of that £36000 debt you just forecast you'd have to be on a salary of £33,000 for 30 years. I doubt most will be in work for 30 years meaning that they will have to pay back more each year and therefore will need a bigger salary - more than likely between £40-50k.

    I can guarantee most will not pay back the total amount of their loans.


    The only ones who will pay back all their loans are those who go on to get salaries of over £40,000.

    Anything below that won't as no one will work 30 years flat on a salary of £33,000.
    So I'm supposed to read all of your corrections to your OP before commenting?

    Couldn't you just correct your OP?

    Why would we have to 'sort it out with tax'?

    We pay money today for todays education through tax and gilt issues, next year we do the same the year after and so on. Loan charges are then made through the tax system. If in 2025 someone 'hasn't paid back the loan' we don't suddenly have less money in 2025, they'll have been replaced by another person making repayments.
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    (Original post by Quady)
    Have you actually read the Browne report?

    Its not like you're the only person to work this out...

    Why would we have to pay more in tax? People can't default on the loan, as fee payments increase over timethe Uk will gave a higher revenue stream on the same out goings - why would taxes raise rather than fall?
    Because the amount of graduates paying back their loans fully will decrease - most graduates do not earn £40,000+ so therefore there will be a financial void which the taxpayers will have to fill - therefore increasing tax.

    The average graduate salary is £25,000 which is £4000 over the threshold. 9% of 4000 is 360 x 30 years = £10,800. Lets assume I got a salary increase so we'll double that amount to cover any increases to £21,600. Lets say £22,000.

    If I have a debt of £36,000 as someone pointed out earlier I will have not paid back £14,000.

    For every 100 graduates who fail to pay back this amount roughly, it will cost the UK taxpayer £1.4m.

    The key is to increase entry requirements so those who go to university will come out and be able to get a job where the salary will pay back the total sum of loan - which then doesn't lead to a deficit.

    The proposals in the Browne Review will lead to a deficit the taxpayer will have to fork out extra for.
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    (Original post by Quady)
    So I'm supposed to read all of your corrections to your OP before commenting?

    Couldn't you just correct your OP?

    Why would we have to 'sort it out with tax'?

    We pay money today for todays education through tax and gilt issues, next year we do the same the year after and so on. Loan charges are then made through the tax system. If in 2025 someone 'hasn't paid back the loan' we don't suddenly have less money in 2025, they'll have been replaced by another person making repayments.
    No they wont.

    The other person will make payments to cover the total cost of their loan - no one elses.

    Basically, any loan that is not paid off after 30 years will go on the taxpayers bill.
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    (Original post by jb9191)
    Because the amount of graduates paying back their loans fully will decrease - most graduates do not earn £40,000+ so therefore there will be a financial void which the taxpayers will have to fill - therefore increasing tax.

    The proposals in the Browne Review will lead to a deficit the taxpayer will have to fork out extra for.
    But it is TODAYS taxpayers who are paying that void, not tomorrows.

    Fee repayments are as you say 30 years after the payment the taxpayer made, if new graduates make more than the threshold then the deficit does not increase.

    (assuming everyone in repayment currently maintains their salary)

    Sorry, thats maths for you.
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    (Original post by jb9191)
    No they wont.

    The other person will make payments to cover the total cost of their loan - no one elses.

    Basically, any loan that is not paid off after 30 years will go on the taxpayers bill.
    So the deficit does not include borrowing made to pay for loans to students?

    Seriously?
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    jb9191's Grammar = FAIL !
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    (Original post by jb9191)
    http://www.bbc.co.uk/news/education-11483638

    Read it.

    A university course costs roughly £7000.

    At current

    £3290 tuition loans - paid up front by taxpayer
    £3710 government funding - paid by taxpayer

    The rest of the universities funding is from sponsors and a other budgets.


    New System


    Example 1

    £6000 tuition loans - paid up front by taxpayer

    Only 40% of government funding is being cut - 60% is still available

    60% of £3710 is £2226

    That totals = £8226 < The uni has £1226 more funding.

    The rest of the universities funding is from sponsors and a other budgets.
    Assumptions: Taxpayer will still be paying the 3710 and not a lower amount. Taxpayer will be getting back all the 6k from the average loan on a given day. Neither will happen, in reality there will be some shortfall on the loan side today, but overall it will not lead to an increase on how much universities have to play with. And you still haven't addressed my previous objections, just gone on an entirely different tangent.
    Example 2

    Cambridge University

    £12000 tuition loans - paid up front by taxpayer

    Government funding probably be minimal - less than £1000 - if that.

    Total = £12000 - 13,000 for a course that costs roughly £7000

    Therefore Cambridge boost funding by roughly £5000.
    The 7k's an average of all universites, not what it costs Cambridge. For all you know, Cambridge costs more than average, and in fact it will cost 9-12k(depending on course stream) which is what it is charging. Also, the average university, if it charges more than 6k will give out extra bursaries etc, so on average universities will probably be around 6-7k, not 9-12k as you seem to be implying. Basically they are being forced to take away some of the funding by cutting teaching budgets and asking students and graduates to bear that share instead.
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    Is there anything Nick Clegg doesn't fail at these days :sigh:
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    (Original post by Quady)
    But it is TODAYS taxpayers who are paying that void, not tomorrows.

    Fee repayments are as you say 30 years after the payment the taxpayer made, if new graduates make more than the threshold then the deficit does not increase.

    (assuming everyone in repayment currently maintains their salary)

    Sorry, thats maths for you.
    Regardless.

    A void of £1.4m per every 100 graduates who earn less than £40k per year under the new scheme is not acceptable..

    Sooner or later that will build up to a massive amount, the coalition will say further cuts need to be made and we'll be worse off again.

    100 graduates will become 10000 graduates which will then leave the country in a deficit of £140m.

    A graduate under the new scheme will not pay all the money back in loans they borrowed from the taxpayer unless they earn more than £40,000 per year. Those that do will pay back the money they lent and that's it. They'll pay tax but the majority of it will be used for other things.
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    Why do people assume the raising in the university fee cap is meant to reduce the deficit directly?

    -The government is reducing spending on university tuition.
    -They are raising fees so the universities have adequate funding.
    -The government is reducing spending so that they have more in the government budget, thereby reducing the deficit.

    The money is not going into the government's pockets for them to have a laugh with, it's for your university...
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    (Original post by ish90an)
    Assumptions: Taxpayer will still be paying the 3710 and not a lower amount. Taxpayer will be getting back all the 6k from the average loan on a given day. Neither will happen, in reality there will be some shortfall on the loan side today, but overall it will not lead to an increase on how much universities have to play with. And you still haven't addressed my previous objections, just gone on an entirely different tangent.

    http://www.bbc.co.uk/news/education-11735254

    http://www.bbc.co.uk/news/education-11483638

    I suggest you read that. It blatantly says universities will be able to increase funding by increasing fees.

    Also, what are you on about? I haven't addressed it because you can't see sense.


    The 7k's an average of all universites, not what it costs Cambridge. For all you know, Cambridge costs more than average, and in fact it will cost 9-12k(depending on course stream) which is what it is charging. Also, the average university, if it charges more than 6k will give out extra bursaries etc, so on average universities will probably be around 6-7k, not 9-12k as you seem to be implying. Basically they are being forced to take away some of the funding by cutting teaching budgets and asking students and graduates to bear that share instead.
    the education budget is paid for by the taxpayer :facepalm:

    the fact is the increase to tuition fees will by far outweight the cut to the education budget meaning universities can make more money from the taxpayers.
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    (Original post by jb9191)
    Regardless.

    A void of £1.4m per every 100 graduates who earn less than £40k per year under the new scheme is not acceptable..

    Sooner or later that will build up to a massive amount, the coalition will say further cuts need to be made and we'll be worse off again.

    100 graduates will become 10000 graduates which will then leave the country in a deficit of £140m.

    A graduate under the new scheme will not pay all the money back in loans they borrowed from the taxpayer unless they earn more than £40,000 per year. Those that do will pay back the money they lent and that's it. They'll pay tax but the majority of it will be used for other things.
    So your maths sucks too... nice.

    The model doesn't expect everyone to repay, that is recognised and built in. So there isn't a deficit, just as it is expected some people will die before they repay the amount spent on their primary and secondary education, it is expected that people will not pay off the nominal fees.

    The proposal provides for people to pay more than the loan they take out in real terms, again this is deliberately built into the model.

    What do you mean 'the majority of it will be used for other things'? other things than what?
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    (Original post by jb9191)
    Its costing the taxpayer more.
    It really won't, and using the present tense is a bit weird.


    Of course, we don’t have any proper statistics for how many people pay back their student loan at the moment, as they’ve only existed in the current form (ie as opposed to private loans to pay for living costs pre-fees) for 12 years, and even then, they were smaller than they are today. University courses right now do not all cost the same to the government, but the number £7k is getting banded around, so let’s use that. So that’s x3 = £21k in fees alone. Then whack in the further £3k a year for fees. We then add in the liability for another £3.5k a year for maintenance, and let’s not include overdrafts and other things not underwritten by the government. Why were you ever including them? Seems a bit misleading. Anyway, that gives the current government, per student, a total cost of £21k + (3 * £3.5k + £3k) = £40.5k.

    The absolute maximum of this that they can claw back is the £10.5k maintenance loan, and approx £3k per year of the fees, a total of about £20k (when you add in the interest rates for the fees increasing). This could be a bit more or less depending on your maintenance loan, but this will vary. So, even if you paid back every penny now, it’ll still cost the government over £20k to put you through university. Working it out like that, you’d need a (not unreasonable) average salary of £24k a year in order to pay that off within the 25 years allowed to do so. Given that the Association of Graduate Recruiters puts the average starting salary of graduates at £25k, that doesn’t seem too unreasonable. It leaves the government – sorry, taxpayer – with a deficit of £25k.

    Under the new system, the government would pay nothing up front except your loans. Well, not quite, they’d obviously still spend some money, but not on a per-student basis, and they do that already, so let’s ignore that. If we use £9k a year as the average (which we don’t really know if it will be yet), then the government liability is now 3 x £9k + 3 x £3.5k = £40k, of which potentially £40k is repayable.
    So that same chump on £24k all his life will pay back not £20k, but £8,100 over the 30 years that the new loans are due for. This is less. But of course, the average salary for graduates is not £24k, that’s just the absolute minimum average you need to pay off your loan. The absolute minimum you’d need under the new system to pay off the exact same amount is approximately £28.5k. To pay off the full amount, you’d need an average salary of approximately £36k. This isn’t an unreasonable salary to expect as an average for a graduate, but I acknowledge it’s not low, either. But that’s the beauty of it.

    For every person who earns £36k and thus pays back £40,000 over the 30 years, they’ve effectively subsidized another student from ever having to work, and the government ends up with the same amount of money as now. Thus the key number is £28.5k. If all graduates earnt below this, the government would lose more money than now. If all earnt above this, they’d get more money than now.
    So what is the average salary of a graduate over the course of their life? Well average earnings over the course of a life for a graduate are put at anything between £250,000 and £1m. Granted, this is based upon people who lived and have no retired in an age where significantly fewer people had degrees and so they earn’t more, but in that case let’s take the lower limit of that margin of £250k (incidentally, the government claims the average over the course of a lifetime is £400k – approx an extra £10k a year on a working life of 40 years. On £250k that’s a “mere” £6,250 extra a year. And the average salary is, according to the Office for National statistics, £26,000 (rising to £31k if you only include full-time workers – quite a nice number!)

    Which puts the average graduate earnings at approximately £34k mean a year. Which is only just shy of paying off the whole £40k, and well over the £20k they’d be limited to paying under the current system.

    Hello.
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    (Original post by CyclopsRock)
    It really won't, and using the present tense is a bit weird.

    Hello.
    You gave the OP a way better explanation than they deserve...
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    (Original post by jb9191)
    the education budget is paid for by the taxpayer :facepalm:
    Only three quarters of it is.
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    Read this

    http://www.ifs.org.uk/publications/5342

    Note this section

    Tighter means testing of grants (which saves the taxpayer money);

    Increasing interest rates for higher earning gratuates and reducing them for lower earning graduates (which makes the system more progressive, more complicated and lower cost to the taxpayer than that proposed by Browne);

    Making the maintenance loan system much more complex and more generous (which increases the taxpayer burden from Lord Browne);

    Increasing the funding for universities charging fees above £6,000 a year (costing the taxpayer more money compared to Lord Browne).

    -----------------------------

    I dont really care as I'm going to be a student and If it means I dont have to pay back all my loan then great. I'll earn £35,000 and just pay a little back.
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    (Original post by Elwyn)
    Yet another ****-up by these dummies who are in charge of our country. After the tuition fee fiasco and the recent comment an MP made regarding how benefit cuts will encourage the poor to breed I think Mr. Milliband must be busy contemplating which colour he will be redecorating his room in 10 downing street with.
    Could you explain the what the ****-up is since the OP doesn't really seem to know?
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    I'm more than happy to pay off all my loan...but i dont wanna be footing the bill for someone elses and them have got the same education as me for free while I pay off my loan plus theirs!
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    Seriously

    How come the BBC are blatantly saying universities can get more funding then.

    Where do you think that money comes from?

    the taxpayer.
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    Clegg is a moron
 
 
 
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