Uni fee cuts from 2021... should I delay going to uni? Watch

Yodaller
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As some of you may have already seen, there have been proposals to cut uni fees from £9,250 to £7,500.

Sounds amazing, right?

Thing is, for me, I'm meant to be graduating/going to uni in 2020, a whole year before this cut. Whilst I understand this is just a proposal just of yet, should I take a gap year to avoid having to pay the extra fees?

What would you do? And are any of you in this situation?
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ByEeek
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There is no cut. They are just rejigging the figures to try and get more money in. The key point is that yhe outstanding balance is written off after 40 years, not the current 30 so you may borrow less but pay for longer acrewing interest along the way.

However, don't think of it as a loan. It is nothing like a loan. It is a tax. As long as you see it as a tax then it matters not a lot what you do.
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Yodaller
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(Original post by ByEeek)
There is no cut. They are just rejigging the figures to try and get more money in. The key point is that yhe outstanding balance is written off after 40 years, not the current 30 so you may borrow less but pay for longer acrewing interest along the way.

However, don't think of it as a loan. It is nothing like a loan. It is a tax. As long as you see it as a tax then it matters not a lot what you do.
While that is true, if you were to be able to pay the full fees without any outstanding balance, wouldn't the overall price still be lower?

It does seem to be a pretty terrible deal for those with loans but a sweet one for the rich- the one's who would actually benefit from the cuts
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ByEeek
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(Original post by Yodaller)
While that is true, if you were to be able to pay the full fees without any outstanding balance, wouldn't the overall price still be lower?

It does seem to be a pretty terrible deal for those with loans but a sweet one for the rich- the one's who would actually benefit from the cuts
It depends. If you intend paying everything back in full the yes, it would be cheaper. But personally, I never will. I borrowed around £20k to train to teach and 2 years in am still below the threashold. During my career I will see some money go in the form of 9% tax.

We shouldn't get too hung up about the morals of this. Rich people are able to buy property with cash hencecsaving interest payments on a mortgage.

It is however better than the old loans system which hangs over you until paid back in full.
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PQ
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(Original post by Yodaller)
As some of you may have already seen, there have been proposals to cut uni fees from £9,250 to £7,500.

Sounds amazing, right?

Thing is, for me, I'm meant to be graduating/going to uni in 2020, a whole year before this cut. Whilst I understand this is just a proposal just of yet, should I take a gap year to avoid having to pay the extra fees?

What would you do? And are any of you in this situation?
This Autumn in the spending review the Chancellor (of whoever is in government then) will announce what will ACTUALLY happen with student fees and funding. Expect to go to uni as expected in 2020 but be ready to change your plans next autumn to add in a gap year if the changes are likely to benefit you substantially (unlikely tbh).
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Roving Fish
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The only benefit I can see is that repayment will be capped at 1.2x what you borrow. Other than that, you'll pay more per month and might just about pay back 100% of your fees.

Under Plan 2, I'll have paid 73% of the initial amount back by the end of my 30 years, probably less tbh as the threshold keeps rising. So the high interest is irrelevant, it's just the government charging themselves for my education.
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ltsmith
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The 10 years of interest will result in an an extra amount greater than 4.5k (9-7.5*3)
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She-Ra
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The change (if it happens) won't probably come into existence until 2022/23...
(Original post by Yodaller)
As some of you may have already seen, there have been proposals to cut uni fees from £9,250 to £7,500.

Sounds amazing, right?

Thing is, for me, I'm meant to be graduating/going to uni in 2020, a whole year before this cut. Whilst I understand this is just a proposal just of yet, should I take a gap year to avoid having to pay the extra fees?

What would you do? And are any of you in this situation?
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SarcAndSpark
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As others have said, absolutely nothing is set in stone- I wouldn't plan on a gap year just yet.

The proposal is being suggested partly because the current system is unsustainable- most people aren't paying back anything near what they borrowed. That suggests that the new deal won't be better for borrowers- the idea is that they will pay back much more (if not all) of what they borrow.

I agree, if you can afford to pay your fees up front, it's a better deal for you- but it's very rare for people to do this. If you've got £27,000 or so available, better to save it for a house deposit etc.

The other issue is where the shortfall in funding for unis will come from. Many smaller unis are already struggling financially under the current system- lowering their funding would only see more unis start to struggle. If there is a fees cut without any other funding introduced I'd expect to see some unis shutting down all together- and others ditching their least viable courses. Other unis may try to offset losses by recruiting huge numbers of students to their cheapest courses, whacking up accommodation costs, or recruiting large numbers of international students. Some unis may also make cuts to staffing/support services. This would all mean it wouldn't be a very stable time to be entering higher education.

If there is government funding introduced, then it may come with strings attached- e.g. quotas of places on some courses, and if lots of people have had the same thoughts as you, this could lead to a shortage of places.

Overall, I'm not sure there would be a huge benefit to waiting and there could be some unforeseen downsides.
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steamed-hams
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Free tuition with maintenance grants and cut down student numbers and courses. Only the brightest should go to university. I am man enough to admit I shouldn't have got in with my grades.
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JohanGRK
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(Original post by Yodaller)
As some of you may have already seen, there have been proposals to cut uni fees from £9,250 to £7,500.

Sounds amazing, right?

Thing is, for me, I'm meant to be graduating/going to uni in 2020, a whole year before this cut. Whilst I understand this is just a proposal just of yet, should I take a gap year to avoid having to pay the extra fees?

What would you do? And are any of you in this situation?
With this level of political awareness, it may be best for you to just stay in school
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Snufkin
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(Original post by Roving Fish)
Other than that, you'll pay more per month and might just about pay back 100% of your fees.
Indeed, I'm pretty glad this won't affect me - slightly lower fees is not worth an extra 10 years of repayments (especially as those last 10 years are likely to be your peak earning time).
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CoolCavy
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10 years more of repayment?? :eek2: glad wont be in this cohort then. What they really need to cut is the ridiculous amount of interest on the loans that start as soon as you study
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Roving Fish
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(Original post by CoolCavy)
10 years more of repayment?? :eek2: glad wont be in this cohort then. What they really need to cut is the ridiculous amount of interest on the loans that start as soon as you study
The suggestion is to do that, during study at least.

Though nobody really pays them back, so it's just the government generating more money to invoice itself at the end of the repayment period.
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KJEKJE Says Hi
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Real talk, on one hand I'm not for it because if you actually calculate the difference, it's only around £6000 less you have to pay off. For 10 more years to repay it? Poor trade-off imo.

On the other hand, depending on you job prospects from your degree, you may not even have to pay it since you'd be getting too low of an income, so it wouldn't really make too much of a difference.

Still. Not a very good trade-off and I feel there are more cons than pros.
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mnot
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(Original post by Yodaller)
As some of you may have already seen, there have been proposals to cut uni fees from £9,250 to £7,500.

Sounds amazing, right?

Thing is, for me, I'm meant to be graduating/going to uni in 2020, a whole year before this cut. Whilst I understand this is just a proposal just of yet, should I take a gap year to avoid having to pay the extra fees?

What would you do? And are any of you in this situation?
nothing has changed yet, 1 report said this, and offset it over a 40 year repayment period.

if and when student finance rules change then look & consider delaying by a year, but nothing has changed yet and theres been no indication from the government that anything will change. TBH i think the current deal might actually be better, unless your planning on paying cash.
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Retired_Messiah
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No. It's unlikely to make any change at all on the amount you actually pay back, and they're planning on extending the repayment period for those "cheaper" fees so you'll likely end up more out of pocket over time.

Absolutely don't cuck yourself into 10 years more repayments just for the sake of a cost reduction that you likely won't even get any benefit from.
(Original post by Yodaller)
While that is true, if you were to be able to pay the full fees without any outstanding balance, wouldn't the overall price still be lower?

It does seem to be a pretty terrible deal for those with loans but a sweet one for the rich- the one's who would actually benefit from the cuts
The poorer and middle class are worse off, assuming they don't launch into a really high paying job after their degree. For those rich enough to pay the fees outright, it works out nicely. For those who would've earned enough to pay it off before the cut to pay off the loan, it will mean they clear the debt sooner. It may push a few people (and I mean a few) into a place where they can pay off the full loan before the end of the usual 30 year period, but for others it just means more years of repayment which is super nasty. If you never earn over the repayment threshold anyway, then there will be absolutely no difference to your life at all.

It does not benefit the vast majority of graduates at all. It does benefit the government as they can claim repayments for longer, assuming they've done their maths right with the flat fee reduction.
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JSG29
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From what I've seen of the proposals, it is far better to borrow under the current rules.

I'll go through the proposals one by one:
1. Fee reduction from £9250 to £7500:
Only helps if you pay your fees off. Will benefit the high-earners, won't affect anyone else. This is because the majority of people don't pay off their student loans, so what does it matter whether there is an extra £5250 owed at the end of the 30 years? Beneficial to anyone who earns enough to pay their fees back (and the very rich who pay their tuition fees straight away). Issue for everyone is Unis are losing over £5000 per student, so will likely cut back on more expensive courses (or increase number of places that go to international students who pay higher fees). From what I've read, plenty of Unis are already struggling financially. These Unis will simply struggle more.

2. Loan cancellations after 40 years instead of 30
Pretty irritating for anyone who doesn't pay back their fees within 30 years (around 81% of students under the current system). Not good news for anyone, bad news for a lot of people.

3. Reducing payment threshold from £25725 a year to £23000 a year
Repayments will be £245 a year higher for anyone earning over the current minimum. Bad news for a lot of people

4. Maintenance grants for poorer students
Helpful only for the poor students who pay back their entire loan - as with the tuition fee decrease, if you don't pay the rest of the loan back it doesn't benefit you. Good news for any poor students who end up in very high paying jobs.

Overall, this seems like a lot of policies which are intended to get more votes. IMO the changes are pretty bad for students, and I would cancel a gap year to get into uni on the current system.

TLDR: Proposals are bad for students, will cost the majority of students more money, and those who save money are earning enough that the current system shouldn't bother them anyway.
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Joinedup
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the reduction in fee income is supposed to be made up by direct grants from government... which is to say the government gets a lot of influence back over the numbers of students who can be enrolled on particular courses at particular unis...

Damien Hinds is probably giving a heavy hint about the types of courses he'd like to see begin to experience a funding winter here Education Secretary calls for an end to low value degrees coincidentally* published 6 days ago.

*probably not actually a coincidence
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JohanGRK
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(Original post by Joinedup)
the reduction in fee income is supposed to be made up by direct grants from government... which is to say the government gets a lot of influence back over the numbers of students who can be enrolled on particular courses at particular unis...

Damien Hinds is probably giving a heavy hint about the types of courses he'd like to see begin to experience a funding winter here Education Secretary calls for an end to low value degrees coincidentally* published 6 days ago.

*probably not actually a coincidence
Only in the UK could the 'value' of a course be measured by its graduate salary.
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