75% of students will never pay off their student loans Watch

ruthf
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#61
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(Original post by Princepieman)
a) fewer people went to uni and
b) the cost was more manageable to pay through general taxation (it's not anymore, hence why the new gen of grads has to pay a little extra into the pot)

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I completely understand those things. I just don’t agree with the idea of calling it a ‘tax for the privilege of going to university’ as so many politicians do. It’s not a tax. I’m not saying that it’s not required or needed by any means. I know that it costs the university that I am going to more than £9,250 a year to put an undergraduate through.
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JohanGRK
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#62
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(Original post by Princepieman)
true, but that's literally how taxes work in general..

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Aye, doesn't make them any fairer tho.

(Original post by Doonesbury)
Since when was 6.1% loan shark territory?

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Literally, quite often (if said loan shark is making a nice fat loan - say, one in the tens of thousands - that they know you won't be able to repay no matter what they threaten you with).

Figuratively, 6.1% is excesive when the govt is a) cherrypicking inflation indexes to max out that interest, and b) charging interest that is close to what commercial, profit-seeking banks (which make unsecured loans for which they can't compel payment) charge.

The real reason why I'm p-ed off has less to do with the exact figure and more to do with the policy justifications behind all this bs (including where universities have chosen to spend some of our loan money and why so many students have been encouraged to pursue HE in the first place), but discussion of these matters is probably off topic.
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federam
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#63
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(Original post by Princepieman)
erm, the median is around £27k for FT employees.. not sure what you're getting worked up about.

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yes im getting so worked out i cap letter everything i say
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candokoala
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#64
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The ONS has revealed that part of student loans will be treated as grants in the government's accounts to allow for the fact that much of the debt is never paid back.

What do you think?

I've quoted a few of you in the article
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ltsmith
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#65
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(Original post by federam)
Its extra tax idiot
no, even though it is student debt, it still appears as debt to banks and it can be enforced through a court of law.

Reality Check had a good response to a similar type of comment like this someone made about student finance.
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Princepieman
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#66
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(Original post by ltsmith)
no, even though it is student debt, it still appears as debt to banks and it can be enforced through a court of law.

Reality Check had a good response to a similar type of comment like this someone made about student finance.
not really. it shows up as a reduction on your income to banks.
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ltsmith
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#67
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(Original post by candokoala)
The ONS has revealed that part of student loans will be treated as grants in the government's accounts to allow for the fact that much of the debt is never paid back.

What do you think?

I've quoted a few of you in the article
what fraction of the loan will be treated as a grant ?
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999tigger
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#68
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Old thread but it was my understanding that the figure had now risen to over 80%. Student finance seems to be in a mess and should definitely be regarded as quasi loans. Not sure whether many degrees are worth the costs involved.
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Princepieman
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#69
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(Original post by ltsmith)
what fraction of the loan will be treated as a grant ?
nothing changes on the student side. the government is just doing what they should have done in the first place.. report the subsidy they are giving to university goers on the outset (i.e. now based on the % of the "loan" that will not be paid back rather than when it is actually wiped in 30 years). it's a reporting/accounting change rather than anything to do with semantic "grant/loan" descriptors.
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ajj2000
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(Original post by ltsmith)
what fraction of the loan will be treated as a grant ?
The government will have to record the 'cost' - meaning the proportion of the student loan balance which will not be paid back - as an increase in national debt. As such it reports this cost as a current year expense. Previously it applied reporting principles which would have made Enron proud.

Interestingly Conservative Home has a big discussion about making huge cuts to student loans - prepare for tax rises.
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Doonesbury
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#71
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(Original post by ltsmith)
what fraction of the loan will be treated as a grant ?
As far as students are concerned... none.

It's an accounting exercise so the government properly shows that a signifcant part of the loan boak will not be repaid by the students. And is effectively repaid through general taxation.

The use of the word "grant" isn't very helpful really as, like you, it can make many think they don't have to repay it.

Also, as Princepieman noted, banks don't view the student loan as a normal debt at all. It doesn't affect your credit rating. But the repayments are included in any "ability to pay" calculations when you are looking for more loans - e.g. for a mortgage.
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SJW-
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#72
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its all well and good for students who'll probably never pay all or any of it back. but not so good for the NHS, social care, policing and co. where money is being diverted away from all because students want to go study some mickey mouse degree which job market doesnt want from some third rate uni at 50k a pop. everyone moans money spent on foreign aid etc but not the cost of sending ppl to uni
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Rabbit2
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#73
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It's not just student loans. Consider home loans: In the US [which, of course is the realty market that i am most familiar with - but i suspect that the same thing is true in the Uk, as well as W Germany, etc], houses all over the US used to cost 3x to 3.5x the gross annual income in that area. In New York city, people made a lot of money (but it cost a lot to live), so flats in Manhattan cost $700,000 up. In Nevada, people didn't make much money, so a simple 2 bedroom house could be had for $30,000 to $40,000. In 1971, i bought a 3 br, 1.5 bath house, with a one car garage, on a 1/4 acre lot about 30 miles west of D.C. for $28,800. I took over the owner's loan and my monthly payment was $215 USD/month. Now, that same house [one just up the street actually], just sold for $315,000 USD. The combined income of two adults living in it are probably not over $100,000. In all liklihood, they will never be able to pay this loan off. Everything is being financed this way - cars included. The approach of a financial collapse appears to be true. Hang on to your wallets!! Cheers.
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Doonesbury
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(Original post by Rabbit2)
It's not just student loans. Consider home loans: In the US [which, of course is the realty market that i am most familiar with - but i suspect that the same thing is true in the Uk, as well as W Germany, etc], houses all over the US used to cost 3x to 3.5x the gross annual income in that area. In New York city, people made a lot of money (but it cost a lot to live), so flats in Manhattan cost $700,000 up. In Nevada, people didn't make much money, so a simple 2 bedroom house could be had for $30,000 to $40,000. In 1971, i bought a 3 br, 1.5 bath house, with a one car garage, on a 1/4 acre lot about 30 miles west of D.C. for $28,800. I took over the owner's loan and my monthly payment was $215 USD/month. Now, that same house [one just up the street actually], just sold for $315,000 USD. The combined income of two adults living in it are probably not over $100,000. In all liklihood, they will never be able to pay this loan off. Everything is being financed this way - cars included. The approach of a financial collapse appears to be true. Hang on to your wallets!! Cheers.
It depends:
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Rabbit2
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(Original post by Doonesbury)
It depends:
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I think that supports my statement about the 3x to 3.5x price to gross earnings ratio in the 60's and 70's, and even up to the early 2000s according to your graph. Why the sales of kit & pre-fab houses hasn't taken off more than it has surprises me. Most of the people i knew in engineering that were older than i was, started out building their own homes. Now, of course, these are mostly engineers (or at least technicians), so they were somewhat experienced in actually 'doing' things, rather than just talking about them. It would be interesting to see how your graph related "Earnings" - was that gross household income (i.e. included both husband and wife), or was it husband's earnings only? It's only fairly lately on this side of the pond, that both adults would normally have full time jobs paying substantial incomes - say two programmers or engineers each making $70,000 USD pa. Even back in the '70s, many women had part time jobs driving a school bus or working in a library, and so would be lucky to be earning $20,000 pa. The trade-off, of course, is that they didn't have to pay for 'child care' whilest they were working. More lately, an alternative is to take in an 'au-pair' or a uni student, and get 'free' child care in exchange for free housing and/or food for the extra member of the household. Considering that a 2 bedroom flat within commuting distance of D.C. runs $2400/month and up. - that's not a bad deal. Cheers.
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federam
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#76
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#76
(Original post by ltsmith)
no, even though it is student debt, it still appears as debt to banks and it can be enforced through a court of law.

Reality Check had a good response to a similar type of comment like this someone made about student finance.
stop spreading crap
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