Student finance UK charge an outrageous level of interest?

That's true, but I'm not sure what more meaning this has, since SLC didn't use this system in 2011. If the idea is just to select a representative RPI, there's no more reason to expect the March date to overstate a given year's inflation than understate it.


The value of money is its buying power of goods and services. The central bank base rate is the rate at which a few politically favoured large institutions can borrow money from the government. Note that if we abolished the central bank the value of money would not become undefined.


The government prefers CPI when they prefer to have a lower inflation number, because CPI excludes a range of asset classes (including property). This makes it less representative of the actual movement of prices.


High compared to what? It's true indeed that if I roll a dice, there is a 100% chance that this interest rate is higher than the number that comes up. It is low compared to any other means of finance that is available to you or that would ever be made available by an institution that is not losing money. SLC does not make a loss to the extent that the taxpayer subsidises its losses; it makes a loss on the loans it issues.

Oh it was March wasn't it? I think it was just an example that in the last three years it has been as high as 6%. Therefore not out of the ordinary to go that high (I disagree with that as analysis), so are people aware the borrowing cost can 'easily be' 9%.

Fair enough, I also suggested the 10 year gilt rate, as this is the cost of the money borrowed for the SLC (or 30 year if you prefer).

Its high compared the the gilt yeild. Thats currently under 3% so paying something plus 3% is high.

In 30mins I'll be borrowing £95k at a rate of 2.79% and the repayments aren't even deducted by the state from salary.

I'm not sure, I'd be interested to know what the difference will be under the new system between the actual loan cost (ie capital + admin cost + interest at gilt rate) and the recovery amount.

What's the relevance of the nominal interest rate as opposed to the real rate, which is fixed at 3%? The only argument can be that the inflation measure overstates inflation - does it? Why?


Again, the link to inflation is not based on the cost of operating the bank/SLC. It's based on the decreasing real value of the loan if the nominal amount is kept fixed. Maybe the government magic money machine enables a company to demand less money back that it loaned out in real terms and still make a profit, or maybe not, but that's not the point I am making. In fact the gilt yield is merely hiding the risk premium, which is instead assumed by the taxpayer via its implicit rolling bailout of the SLC.


Presumably secured against a property. You cannot repossess education and sell it to someone else.


You were on the other thread talking about the government models that suggested 45% would never pay off the loans. They will almost certainly make a profit in nominal pounds, and probably even in real pounds, but almost certainly a loss in net present value.

That said I think the easy repayment terms are a more significant factor at this point than the low interest rate.

Firstly this is an official UK govt figure

Secondly that isn't the implication at all.

Virtually NONE of the EU graduates are paying anything,
a sizeable number of UK grads have "disappeared"
and indeed many are earning below the amount to start paying back the loan, which is considerably more than £15k a year at which PAYE repayments start.

The loan book that the government are currently trying to sell off has only 45% of people paying anything.

See
http://www.theguardian.com/money/2014/jan/14/adrian-bailey-10bn-black-hole-student-debt

And
http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news/student-loans-report-publication/

The real killer figures are at the bottom of this link
http://www.bbc.co.uk/news/business-25084744

Its fixed at 3% above inflation, by defintiion it overstates inflation.

Yes but any other loan is based on the normal rather than 'real' value of the money loaned. A company doesn't make a loss if it's margin is lower than inflation. Its a poor return for sure, but not a loss.

Yes, and yes thats a weakness of the arguement, but then again they also don't have access via my employer for repayments and can't change the Ts&Cs.

If 99% of people paid all but £1 of their loan then 45% would not pay off their loan.
If the loan repayments amounted to (say) 2% more than the gilt rate plus admin costs of the SLC then the Govt would make a massive profit whilst 99% of people never repay the loans. The two things aren't mutually exclusive.

They are, but the easy repayment terms coupled with the high interest mean 45% (or who knows more) will be making repayments for 30 years. A grad tax would have been more effective. A grad tax of (say) 7% of earnings over £21k would draw in more money (typically longer payment than 30 years) and cost less to administer than the current loan system.

Yet, with the misconception that your own choice of degree will 'make the cut', you're perfectly happy proposing that strangers have a very large say in other people's careers?

In answer to your other question, History of Art and Philosophy are academic disciplines. The kind that belong in the ivory tower. Unlike Business.

You and Quady certainly are a bigoted pair of snobs, for what reason, I have no idea. To me, it seems more beneficial to be educated about the mechanics of a company, rather than art history to actually go out into the real world and make a living. I know too many people who have gone and got their history and art degrees at their 'top' unis' and are still living at home, stuck in a non graduate job. I have not conceded this argument, I still think business is a good degree.

You are in Denmark? Well obviously you are in a perfect position to instruct me what to do in the UK education system.

I would not care to hear from you again.

You and Quady certainly are a bigoted pair of snobs, for what reason, I have no idea. To me, it seems more beneficial to be educated about the mechanics of a company, rather than art history to actually go out into the real world and make a living. I know too many people who have gone and got their history and art degrees at their 'top' unis' and are still living at home, stuck in a non graduate job. I have not conceded this argument, I still think business is a good degree.

You are in Denmark? Well obviously you are in a perfect position to instruct me what to do in the UK education system.

I would not care to hear from you again.

Conclusion: Vote UKIP. They want less people in uni and more people on vocational courses. That way, the government can afford to pay for students. Now, people who are doing Harry potter Studies and Study studies are ruining for those who actually want a proper degree.

You and Quady certainly are a bigoted pair of snobs, for what reason, I have no idea. To me, it seems more beneficial to be educated about the mechanics of a company, rather than art history to actually go out into the real world and make a living. I know too many people who have gone and got their history and art degrees at their 'top' unis' and are still living at home, stuck in a non graduate job. I have not conceded this argument, I still think business is a good degree.

You are in Denmark? Well obviously you are in a perfect position to instruct me what to do in the UK education system.

I would not care to hear from you again.

I'm not Danish you utter moron. I know more about the UK education system than you do, having, you know, been through more of it than you have.

How you cannot grasp that Quady and I are not arguing for the abolishment of BA Business and Management, I do not know. We are turning your own snobbish UKIP policy on you, given that you don't have the foresight to realise that it would in all likelihood apply to your very own choice of degree.

Perhaps if you were able to follow a simple argument you'd be hoping to pursue something a bit more challenging than Business.

It would also appear that you cannot read; I refer to my previous comment that I do not wish to hear from you again. Or, you just like bullying people who disagree with you.