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insomniac .. no matter how much you read up on or try and work it out, this money that kids are going to be charged for their education will have to be paid back. For the government to claim that they are progressive because if you don’t get a good job you can pay them back more slowly is bordering on ridiculous. I agree with you on most things but you are miles off the mark with this one, sry.
It’s just another part of the social cleasing program I’m afraid.
PS .. Isn’t this how the financial crisis started in the first place banks giving money to people who weren’t ever going to pay it back? .. just a thought.
My peer group make up the [soon to be retired] teachers, engineers and scientists that had the benefit of a free university education; people who, imo, make up the backbone of this country. Who is going to replace them, or would the country be a better place if kids just left school and either worked at Tescos or went on the dole?
PS .. Isn’t this how the financial crisis started in the first place banks giving money to people who weren’t ever going to pay it back? .. just a thought.
it will depend on the detail of it, but it sounds like it at least has the potential to be a bit more pernicious than that.
there you had a fixed liability where the borrower could at least get out from under by declaring bankruptcy.
here it sounds like it may be possible the liability could float, and so not attach to someone about to declare bankruptcy, and so perhaps not be washed away by that process, but still be waiting to continue on the other side.
general rule is that if a contingent liabiity is not of a kind able to be proved in a bankruptcy, it isn’t recoverable in – but equally doesn’t get barred by – the bankruptcy.
social and commercial stigma decreases the more widespread a practice becomes.
although the stigma hasn’t disappeared from bankruptcy, which remains a bar to various things, the stigma today is less than it was even a generation ago, and much less than say fifty years ago.
plus in this kind of context it can be explained away in future as being down to youthful inexperience.
anyone know how is it proposed to address the possibility of students taking this money and then just en masse declaring bankruptcy at the end of their course ?
Wit, as far as I’m aware the decision has either not been made or has not been made public – the full details of this legislation is not to be voted on until next March/April I believe. (It’s all a bit of a disgrace really as no Green Paper has been presented to the Houses)
However, the current Student Loans to cover Maintenance Grants introduced by the Tories in 1997(?) and the current Loans for Top-Up Fees introduced by New Labour are exempt from bankruptcy and IVA agreements.
Btw Dave, if you was a student you wouldn’t need the loans, as going by the kip of your photo on Facebook you would earn plenty working the doors at the Student Union – you look a right thug
However, the current Student Loans to cover Maintenance Grants introduced by the Tories in 1997(?) and the current Loans for Top-Up Fees introduced by New Labour are exempt from bankruptcy and IVA agreements.
Repayable student loans were introduced by the Tories in 1990 but were an addition to the grant, not a replacement.
Labour introduced fees & withdrew non repayable grants with the same act of Parliament in 1998.
thanks for that, Pete.
sounds like there was a loophole around this type of loan that worked for a small number of folk for a limited time, but was plugged effective 1 Sep 2004:
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…..It was for a time possible to discharge yourself from liability to repay (that is, cancel) the second type of loan by declaring yourself bankrupt, and over 1000 students and graduates did just that.
The Government had never intended to allow this, however, and in England and Wales they used the Higher Education Act of 2004 to close the loophole. Similar provisions have since been made for Scotland and Northern Ireland….
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Just found this thread – a good debate.
What some posters appear not to grasp is that this isn’t some politically motivated, "let’s have a go at poor people" effort by the tories, rather it’s a financial necessity. We simply can’t afford to support so many students, so they’ll have to make an increased contribution if they want to go to uni.
Nothing wrong with that, imo.
The cause of the problem is too many people going to uni. Sorry to sound elitist, but university is for clever people, not for everyone. The Labour govt’s ridiculous target of 50% of kids going to uni has just meant that too many embark on expensive and ultimately worthless degrees. How is a Media Studies degree going to get you a job? American Studies? David Beckham Studies? If you have to put ‘Studies’ after it to make it clear that it’s an academic subject, then it isn’t one I’m afraid.
What we should do is make economically ‘useful’ degrees (engineering, maths, medicine etc.) free (this could be partially funded by industry – for example a large engineering firm could fund a university engineering department in return for first crack at the graduates). Non-useful degrees can be £6k per year, which could discourage people from doing subjects that won’t lead to a job in any case.
Simples!
I tend to agree Benny but I just don’t think that the way you exclude people from university is by making it more expensive. By doing so you only deny the less well off in society from getting the best from the education system because they can’t afford it. Isn’t that how making things more expensive works?
Anyway, I have been looking at how much this will cost regarding debt levels etc. This may be wrong, here goes lol
Suppose Rich-but-dim goes to uni and accrues a debt of £36k for fees and a further £10 for living expenses, leaving him with a total debt of £46K.
His debt now attracts 3% interest and increases by £1380 per year. In order to cover this under the £21K formula, ie. pay 9% of anything over £21K he needs his first job to pay £36K per year. (36 – 21 = 15K , 1380 = 9% of 15K).
If he wants to pay his debt off over 25yr, capital only, he will need to make 300 monthly payments of £153.
I suppose you could just look at this as a £46K repayment morgage with 3% interest.
That’s what I meant by saying the banks aren’t going to get this money back, I think
Dave – I too agree with Benny.
Your analysis of the expenses for rich-but-dim kid’s university charges assumes that Uni’s will let dim kids in . (Okay, so nowadays due to the expansion in Uni places dimmer kids can get a Uni place.)
Theoretically, (if Universities had the standards that were applicable 20 years ago), rich dim kid wouldn’t get a uni place – thus no fees. As things stand, one might hope that dim kids of whatever background will think twice before embarking on the "David Beckham Studies"-type degree course, that will do them no favours in the employment market.
Bright poor kids need to choose the more academic or worthwhile degrees (as Benny mentioned) at the better Universities and have the faith/confidence in their ability to earn above-average income upon obtaining their degree.
Whether they do or don’t, there’s no obvious reason why the binman or barista should have their taxes used to subsidise the clever (or the not-so-clever|) who choose to spend 3+ yrs at University... if you exclude people by placing a prohibitive price on doing something then, the people who miss out are the ones that can’t afford it.
Standards will obvioulsy drop at univerisities as the poorer smart kids make way for less smart richer kids, it’s capitalist evolution.
http://www.bbc.co.uk/homes/property/mor … ator.shtml
.. the mortgage calculator for £46K at 3% over 25yrs is £220 a month, omg, that’s a scream !!
If this silly piece of Libertive legislation actually gets to become law the Uni population will be decimated and unemployment will rise proportionately?
Q) Who got us (the country) in this mess?
A) The Banks started it.
Q) Who made the situation worse?
A) The Government i.e. Labour politicians.
Q) Who will get the country out of the mess?
A) All the tax payers.
Q) Who is paying taxes?
A) Well, the students sure are not in that catergory are they.
Billy's Outback Shack
When is a debt not a debt?
Answer:
When it is a student debt.It should not be called a "debt".
If it were not called a debt, it would not put off so many people.Students do not have to pay anything back unless they get a job worth 21k+. If he becomes richer than 21k he pays more.
Can’t understand those who believe this is somehow against the poor. If the poor man remains poor, he pays nothing. If the poor man becomes rich, he pays; but is no longer poor.
GT (a poor man)
Value Is EverythingStudent protesters:
There are many with good intentions who do understand the situation.
There are many with good intentions who don’t understand the situation.
There are some who don’t want to understand and just want to cause anarchy.
In the 80’s some of my teachers went on strike, disrupting our lessons. Some of the older kids (with good intentions, who were aware of the situation) did not like this, so organised a sit in protest themselves. A small group sat in the centre of the playing field after lunchtime. Word got around what was happening and they were joined by more and more pupils. Yet when the teachers asked some what they were demonstrating against, they had not got a clue. When the youth see the chance for anarchy, they will take the chance, in some cases no matter what the cause.
These violent vandles don’t care about tuition fees. Just a convenient excuse.
Value Is EverythingInsomniac,
Your posts on this thread have been brilliantly argued. There was a lot more I was going to say, but you’ve said it all far more elequantly than I could ever hope to do.
Well done.
Value Is Everything.. 46K at 3% over 25yrs means the student will have to pay back a total of £86k for his 3yr course, unless he has rich parents who can pay it off for him.
Hardly fair is it .. ?
£46K for the unni
£40K for the bank, if you don’t have well to do parents.But Dave, if you bought say, a car, (or a racehorse) for £46K and your parents wouldn’t pay for it, and you don’t want to pay for it, why should the taxpayer?
You don’t have to buy that expensive car (or horse), it’s not compulsory. Neither do you have to go to University. So why should the taxpayer pay for that?
As with the 46K car/horse, you need to make sure that the University course you’re going to have to pay for is value for money. Since the mad rush to increase the number of school-leavers going on to University to 50% (and the increase in the number of Universities), the number of value-for-money degrees has decreased. The gold-standard that was once a degree from a British university has been devalued. So why should the taxes of the binman or barista pay for crap degrees from 3rd rate Universities? Or, to put it another way, why should the taxpayer pay for £46k for your car especially if it’s a rust-bucket and at a time when the country is economically in a bad way.
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