'Student loans heading for a trillion pounds' - share your thoughts with a journalist Watch

discobish
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A recent story on the BBC claimed that student loans were 'heading for a trillion pounds', after the House of Lords economic affairs committee revealed evidence the student loan book would grow to over £1 trillion over the next 25 years.

This hard-hitting report accuses the government of using "accounting tricks" to conceal the real cost of higher education and to pile up huge debts for future generations.

The conversion of means-tested grants into loans has also meant that the poorest students end up graduating with the biggest debts, says Committee chairman and former Conservative minister Lord Forsyth.

He also warns that the current repayment system was more expensive for people in middle-income jobs such as nursing, rather than high-paid lawyers or financiers, who would pay off their debts more quickly.

Following this news, a journalist from 'i' is now looking to speak to a couple of graduates that feel this affects them.

She would like to speak to you if...

* You're currently working as a nurse, or are in a similar middle-income job
* You're a 'high earner' such as a lawyer or something similar
* You're currently studying a degree which will lead you into one of these careers or similar

... to highlight how it's unfair about the difference in how long it would take you to pay off students loans.

Please send me a PM if you'd like to get involved, or would like more info

What do you think of this story?

What are your thoughts about the current repayment system?
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username2752874
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(Original post by discobish)
A recent story on the BBC claimed that student loans were 'heading for a trillion pounds', after the House of Lords economic affairs committee revealed evidence the student loan book would grow to over £1 trillion over the next 25 years.

This hard-hitting report accuses the government of using "accounting tricks" to conceal the real cost of higher education and to pile up huge debts for future generations.

The conversion of means-tested grants into loans has also meant that the poorest students end up graduating with the biggest debts, says Committee chairman and former Conservative minister Lord Forsyth.

He also warns that the current repayment system was more expensive for people in middle-income jobs such as nursing, rather than high-paid lawyers or financiers, who would pay off their debts more quickly.

Following this news, a journalist from 'i' is now looking to speak to a couple of graduates that feel this affects them.

She would like to speak to you if...

* You're currently working as a nurse, or are in a similar middle-income job
* You're a 'high earner' such as a lawyer or something similar
* You're currently studying a degree which will lead you into one of these careers or similar

... to highlight how it's unfair about the difference in how long it would take you to pay off students loans.

Please send me a PM if you'd like to get involved, or would like more info

What do you think of this story?

What are your thoughts about the current repayment system?
Good tbh - hopefully they reduce the fees
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Princepieman
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(Original post by Kyber Ninja)
Good tbh - hopefully they reduce the fees
How will that make a difference?

Before loans were introduced the government was paying pretty much the same level of fees we are seeing now. The only difference between now and then is that people are trying to dress this up as "debt" instead of "government expenditure".

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username2752874
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(Original post by Princepieman)
How will that make a difference?

Before loans were introduced the government was paying pretty much the same level of fees we are seeing now. The only difference between now and then is that people are trying to dress this up as "debt" instead of "government expenditure".

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Didn't say it would


I said "hopefully they reduce the fees"
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ckfeister
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Its an extra tax, what does it matter? This just mis-leads the public...
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Trinculo
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Oh no.

Student loan debt might top £1Tn.

Whatever will we do?

Help.

Police. Fire. Ambulance.

Public sector pension liability is already at £7.1Tn.

The 0.1 at the end of that is equivalent to the NHS budget for a year. That's how enormous Public Sector Pensions are.
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renegradeisland
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Context people! We need to divide that among the people of the UK and take into context that students are usually richer! We can't expect the poor to pay for us - maybe we should create a tax on parents that send their children to education? A kind of "Child Tax" so it doesn't discourage uni education.
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nexttime
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Even higher earners will simply not pay back loans depending on initial levels of debt.

A doctor for instance typically wouldn't pay back all the loan (without voluntary payments). Due to low initial earnings and higher initial debt, a doctor working full time with no breaks for 30 years would pay it back, but only in year 26 (assuming average 2% RPI, which is perhaps conservative). A couple of years out or part-time (very common for childcare etc) and they wouldn't come close. And that's with the normal loan amount - if you look at graduate entry where initial debts are typically £75-80,000, even working full time every year for 30 years you will not be close to writing it off. If you go part time after 4 years, your debt will be almost £300k by the time it is written off.

It is very very clearly a delaying tactic - borrowing from the future in order to make finances look better.
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BritishJew
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(Original post by Trinculo)
Public sector pension liability is already at £7.1Tn.
That's an outright lie.

The £7.1 trillion includes the state pension, you know.... the one that we all get.

And it includes the deficit of private pensions.

£4 trillion of that is state pension, and £2 trillion of that is related to the deficit of private sector defined contribution pensions.

Last time I checked the total future liability for unfunded public sector pensions is around £1.3 trillion. But it has actually been calculated that the public sector pension liability as a percentage of GDP is set to steadily decrease over the next few decades.

Nothing like a bit of truth to straighten things out hey?

https://www.ipe.com/countries/uk/uk-...54.fullarticle
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e^iπ
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I think it's absolutely shambolic that the government blindly gives student loans to anyone attending university even if they are doing a course which quite obviously will not enable them to pay back the loan after graduating. And for what? so it can be said that "lots of people are going to university"
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Retired_Messiah
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I would like to share these thoughts
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PTMalewski
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(Original post by e^iπ)
I think it's absolutely shambolic that the government blindly gives student loans to anyone attending university even if they are doing a course which quite obviously will not enable them to pay back the loan after graduating. And for what? so it can be said that "lots of people are going to university"
If we look deeper into this, we will find a paradox that the very same courses which not allow them to pay their debts back, do allow to pay debts back. Presume there are multiple fewer people graduating from humanities, it would turn out, that when there are much fewer graduates of the courses, which would struggle to pay the debts back when there would be more of them, as for example, 10 or 50 such graduates can be very useful to work at various government agendas, but 5 or 50 thousand is a completely different story, so if there were only a few of them, they would find no difficulty in paying the debts back.

Also, I suppose there isn't any definite research which established what impact the university education exactly has on the development of people's careers, outside the branches when specialist knowledge (eg. engineering) is essential to do the job, or what actually is their unique impact on the society.

University lecturers along with many people who went through higher education, and some people who did not, but have depth-in interest in things, often agree that people such as philosophers, or people who have depth-in understanding and knowledge in politics, social sciences etc. are very beneficial to the society although it is difficult if not impossible to measure these benefits.

We might add, although of course, this is by no means obligatory for the UK to follow, that many European countries simply provide free higher education to their citizens, and some even allow them to study multiple degrees, even as many as a one pleases.

This may be not to best or the most cost-effective system, but at least it allows people a second chance which sometimes may back with interest, plus it enables the talented people who would normally struggle or be unable to get funds for further standing to gain further skills an knowledge which can boost their capabilities and sometimes enable them to do an excellent scientific work.

Take the research on the AI for example. A fully-capable team figuring out how the thinking works and how to apply it to computers should include computer scientists, neurobiologists, linguists and philosophers. A person possessing a deep understanding of both the computer science and one of the other fields would be most useful in such work, both as a person who knows more of what he or she is doing and as a person who makes communication between two groups of specialists much easier. Such project (as any challenging one) can of course end in failure which looks bad in the financial statistics, but in case of success, the benefits and profits can sometimes be enormous and pay for many failed with interests.

My point would be, all this should be considered on many levels. Taking things only on one would lead us, for example, to a conclusion that 'we should get rid of the army, it costs billions, and we didn't really need it since Hitler was killed!"
Personally I would sooner get rid of the army, than save on public education. Even in some endangered countries, not to mention the unsunkable carrier that noone wants to attack, because it is much better as a business partner.
Take for example the countries of the eastern NATO borders- they seem to be endangered by Russia, but Russia has no interest in attacking them, an in case of any serious conflict, none of them would be able to defend itself anyway, so why spending money on something which is completely useless.
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e^iπ
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(Original post by PTMalewski)
If we look deeper into this, we will find a paradox that the very same courses which not allow them to pay their debts back, do allow to pay debts back. Presume there are multiple fewer people graduating from humanities, it would turn out, that when there are much fewer graduates of the courses, which would struggle to pay the debts back when there would be more of them, as for example, 10 or 50 such graduates can be very useful to work at various government agendas, but 5 or 50 thousand is a completely different story.

Also, I supposed there is definite research which established what impact the university education exactly has on the development of people's careers, outside the branches when specialist knowledge (eg. engineering) is essential to do the job, or what actually is their unique impact on the society.

University lecturers along with many people who went through higher education, and some people who did not, but have depth-in interest in things, often agree that people such as philosophers, or people who have depth-in understanding and knowledge in politics, social sciences etc. are very beneficial to the society although it is difficult if not impossible to measure these benefits.

We might add, although of course, this is by no means obligatory for the UK to follow, that many European countries simply provide free higher education to their citizens, and some even allow them to study multiple degrees, even as many as a one pleases.

This may be not to best or the most cost-effective system, but at least it allows people a second chance which sometimes may back with interest, plus it enables the talented people who would normally struggle or be unable to get funds for further standing to gain further skills an knowledge which can boost their capabilities and sometimes enable them to do an excellent scientific work.

Take the research on the AI for example. A fully-capable team figuring out how the thinking works and how to apply it to computers should include computer scientists, neurobiologists, linguists and philosophers. A person possessing a deep understanding of both the computer science and one of the other fields would be most useful in such work, both as a person who knows more of what he or she is doing and as a person who makes communication between two groups of specialists much easier. Such project (as any challenging one) can of course end in failure which looks bad in the financial statistics, but in case of success, the benefits and profits can sometimes be enormous and pay for many failed with interests.
I very much agree with your point that paying back the loan is not the I my way if paying back the loan if that makes sense, but the main problem is that universities are very greedy and are charging money for course which are obviously not worth it.

Take courses in which lab work is required, the cost of maintaining equipment and buying resources would be substantial and now compare that with something like philosophy in which the only things required are textbooks which one offers better value for money?
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ThomH97
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(Original post by nexttime)
Even higher earners will simply not pay back loans depending on initial levels of debt.

A doctor for instance typically wouldn't pay back all the loan (without voluntary payments). Due to low initial earnings and higher initial debt, a doctor working full time with no breaks for 30 years would pay it back, but only in year 26 (assuming average 2% RPI, which is perhaps conservative). A couple of years out or part-time (very common for childcare etc) and they wouldn't come close. And that's with the normal loan amount - if you look at graduate entry where initial debts are typically £75-80,000, even working full time every year for 30 years you will not be close to writing it off. If you go part time after 4 years, your debt will be almost £300k by the time it is written off.

It is very very clearly a delaying tactic - borrowing from the future in order to make finances look better.
Who actually owes the 'missing' money, and how much is it exactly? The government sells off student loans to private companies, who presumably aren't going to pay the full price because they know the graduates probably aren't going to pay it all back.

You're right about borrowing from the future. Successive governments just have to keep delaying it until the baby boomers die off and then they can be blamed without losing votes.
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PTMalewski
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(Original post by e^iπ)
Take courses in which lab work is required, the cost of maintaining equipment and buying resources would be substantial and now compare that with something like philosophy in which the only things required are textbooks which one offers better value for money?
In this particular example, we can't say because of the output effect is unclear, but I agree it is reasonable to consider that some courses are cheaper to run than others and there is no reason why any government should spend the same amount of money on them.
I don't know however if that's the case in the UK, do actually the fees cover all spendings which are made to run courses, or perhaps there are other funds to run some?
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ThomH97
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(Original post by PTMalewski)
In this particular example, we can't say because of the output effect is unclear, but I agree it is reasonable to consider that some courses are cheaper to run than others and there is no reason why any government should spend the same amount of money on them.
I don't know however if that's the case in the UK, do actually the fees cover all spendings which are made to run courses, or perhaps there are other funds to run some?
I'm sure an average lecture theatre of 100 students paying a total of £900k a year easily covers 300 hours of lectures. Those are conservative figures from my university but I'd imagine others aren't too different. That extra cash is probably to subsidise science and other equipment intensive subjects, research and their chancellors' lifestyle.
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Princepieman
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(Original post by ThomH97)
I'm sure an average lecture theatre of 100 students paying a total of £900k a year easily covers 300 hours of lectures. Those are conservative figures from my university but I'd imagine others aren't too different. That extra cash is probably to subsidise science and other equipment intensive subjects, research and their chancellors' lifestyle.
There's also the entire support infrastructure behind you being able to sit in that lecture hall.

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Retrodiction
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(Original post by renegradeisland)
Context people! We need to divide that among the people of the UK and take into context that students are usually richer! We can't expect the poor to pay for us - maybe we should create a tax on parents that send their children to education? A kind of "Child Tax" so it doesn't discourage uni education.
I can't think of a single person whose parents 'sent' them to university. Everyone I know went of their own volition.
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renegradeisland
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(Original post by Retrodiction)
I can't think of a single person whose parents 'sent' them to university. Everyone I know went of their own volition.
Why would a parent send their children to private school but not university?
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ThomH97
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(Original post by Princepieman)
There's also the entire support infrastructure behind you being able to sit in that lecture hall.

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The fact that universities can balance their books while charging the same amount for applied physics and history degrees (for example) shows that they overcharge for some subjects to subsidise others. Whether that's right or not is another matter, but on a personal level it's not unreasonable to be unhappy you're paying for someone else's degree.
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