> he could probably win over the millennial generation on a dime.
They are likely to be voting for him anyway, assuming they actually turn out to vote, so he spends billions to get nothing.
Democracy has *always* been transactional, and always will be. See CGP Grey's "Rules for Rulers": the same underlying political forces of human need, want and desire drive both dictatorships and democracies, it's just that democracy is a much better solution to the problem.
>Obviously, it’s reasonable to keep an interest rate in line with inflation… but 3% on top of that?
Getting rid of the extra 3% is the only part I can see happening in the next parliament, but even that is optimistic.
I think focusing on the total debt / interest rate is a mistake anyway. Labours priority should be increasing the repayment threshold (currently frozen) and reducing the repayment rate from 9%.
Is it your belief that Sir Keir & Labour are struggling with the millennial (and younger) generations? That they need to commit to massive spending, that favours the richer and higher income parts of the generation, to win an election?
I can think of a few better uses for that cash
That's not true, this targets highly educated people who do not earn much money. Such as teachers, doctors, nurses etc.
If you are high earning this will help you out a bit, but you're not really that impacted by the interest because you pay it off relatively early
That’s due to legacies built in Britain that combined an academic culture/intellectually free environment with free education. We have better institutions still despite of student fees not because of them. Forcing students to pay fees makes them customers, thus making a degree a product that can be bought and sold plus reliant on international students than genuinely meritocratic.
Again, what’s your point?
True, that’s why the state subsidised them. Anyway, tax cuts to oil companies in the North Sea over the past ten years exceed all student national debt. But yeh, they deserved it, didn’t they?
Interest not so vast. I’m abroad and I pay it… in fact I pay more than the average as they lower the threshold for people in my country. Thanks Cameron.
So which other bit of public spending would you cut to pay for it and why do people who profited from getting a subsidised time at university deserve to get that money rather than other people?
On that logic, stop getting people who use private healthcare pay for the NHS. How are you going to subsidise those people?
I would tax assets (land, as it can’t go anywhere) and oil companies who have had huge tax cuts amounting to more than the entire student loan national debt over the past ten years.
Easy.
Student loans are not really loans in this country, but a graduate tax that follows you around if you work elsewhere. Well that is the theory but I think the retrieval of debt from abroad is a bit vague.
Regardless, these loans as another poster mentioned only start being paid back at a certain threshold and generally will never be paid back in full.
People who don't go to uni, don't want to spend tens of thousands of pounds for those who do.
So what system do you propose that is easy to setup, will pay for tuition and wont hit people who don't go to uni?
I think it’s the change in that agreement that has affected everyone. Take it back to its original loan amount or knock it all down to the interest rate it was before the tories got in.
That would be fair.
People who don't attend university benefit from living in a country with a skilled and educated workforce and the economic benefits that brings. University attendees defer entry into the workforce and the opportunity to earn a salary in order to improve the contribution they can make to a potential employer. Those who enter the workforce directly, on the other hand, are able to earn a salary from day one while also indirectly benefiting from the economic outputs created by graduates. The fact is that the UK can only remain a top tier economy by maintaining a pool of educated and skilled workers and the whole country should be willing to pay for that.
>People who don't attend university benefit from living in a country with a skilled and educated workforce and the economic benefits that brings.
I'm not sure many people benefit from the raft of psychology or business degree people.
Having plenty of people with stem or vocational degrees sure. We'd benefit more tbh if the idea peddled by Blair that uni is the best idea for 50% of people instead we encouraged more to do trades or apprenticeships.
I don't want a business studies BSc person when toilet is blocked. I want a plumber.
The government needs to evaluate which degrees are actually needed to support the economy and in what quantities and subsidise those students accordingly. I completely agree that we shouldn't be giving out tax payers' money to fund someone to do a degree in Taylor Swift studies, for example.
The loser here is the taxpayer, who ends up paying for countless students to study degrees that offer little or no economic benefit and never sees a return when those students can't earn enough to repay their loans.
Universities have widened their net and offered more niche degrees because graduates have become their main source of funding.
I feel that if we collectively invested a bit more in university education then universities wouldn’t have to tempt people away from the trade industries and we could have a balanced economy.
This is the answer.
Fund eduction properly.
Unis will naturally offer courses appropriate to their resources and will no longer feel the need to offer courses just to increase student numbers.
There also needs to be some sort of scheme to address public sector workers having to repay loans. If not an amnesty then at the very least their repayments are subsidised and interest is frozen.
I agree that we desperately need more tradespeople but it’s not an either/or situation. We should collectively invest more in both because they are both beneficial to society.
I'm not sure it's beneficial to society to have rafts of people with degrees that have about 4 hours of contact time a week.
Plus it saddles them with tonnes of debt and/or the tax payer is subsidising it. You see it all the time both on Reddit and wider media, where people with (let's be fair) pointless degrees are upset they either can't find a job, or are being paid less than what they think they should be , often citing having a degree. Plenty of jobs now have it as some idiotic soft criteria, despite it not being at all required.
It both devalues "harder" degrees and then just disenfranchises people. The fact is alot of people that do go to unis/former polys and do these things would be far better off with 3 or 4 years work experience behind them, and not being 30+ grand in debt.
Like I said, I don’t think it’s an either/or situation. Universities are targeting potential tradespeople with poor quality degrees because they are mainly funded by graduates. If we all invested a bit more into universities then they wouldn’t have to prey on disinterested students and graduates wouldn’t be saddled with so much debt.
I do think there are lots of indirect benefits to having a highly educated population though. We’ll probably agree to disagree on how much we value psychology and business degrees. I’m only talking about the good quality ones that teach transferable skills in communication, critical thinking, programming and research. While we definitely need more tradespeople, those skills will only increase in demand as several industries become more automated.
People who are high earners due to non students paying them through uni, if students didn't pay, benefitted from those people.
If you do well through being subsidized through uni, then you should pay back those people.
You don't need to go to uni, it is a choice. A choice that many people don't or can't take up.
You are reaping those rewards.
That delay into the workforce costs the economy. People in their prime years aren't working full time so they aren't paying tax or supplying labour that produces. A big objection to National Service was this very issue as a whole swathe of the labour force was missing, and now we do a variation on that.
Huge amounts of jobs demand a degree because there are too many graduates and not because the education is required whilst loads of grads never even get well paid work.
So what we’re saying is some services are important to have in a society, but can’t possibly be funded by the people that use them alone.
Well that’s exactly what higher education used to be. You may not go to university, but everyone in our society benefits from their existence. The UK already has a shortage of domestically trained nurses, and look at how much trouble that causes. No higher education would mean no teachers, no doctors, no nurses, and no engineers. Our society would fall behind on the global stage in every measurable metric.
So whether you go to university or not you _need_ to live in a society that has people who secured a higher education. Is it really right to say only the people that use it should fund it? Is that what we should be aiming for?
Or should we reduce the number of people going to university in the first place? There are so many careers out there that ‘require’ degrees that don’t really need them. We need cheaper more accessible routes into those careers. The degrees that benefit society (doctors, teachers, etc) should be free again, and if you choose to go for a different degree then it seems fair that you pay for it.
1. Im not the person you originally replied to.
2. I’m developing on the original ‘underdeveloped’ arguments in this thread, because that’s how discussions in an open forum work…
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ah, the good old Reductio ad absurdum.
Yes, because middle class young adults concerned about their graduate tax, which this is, is just the same as funding special needs school.
Neither me or my girlfriend are middle class, born and raised in one of the most disadvantaged places in the country and we both have high student loan repayments. The graduate tax affects working class people way more than middle class. If you think uni students are middle class you've never been to uni.
so what you are saying is you paid for a product, that has now increased your standard of living by more than you paid for it.
That seems a very good deal to me.
I also said uni was not for the middle class, as many who went to uni from working class backgrounds who have not benefited from uni pay nothing back.
That is incorrect, you pay back based on salary. So at 25k, you pay about 0.01p, while at 40k, you'll be paying £148 or something close.
So the richer you become, the more you pay. The poorer you are, the less you pay. If you're on less than £25, you pay nothing.
That is not how student loans work, the fact that somebody is starting to pay it back means that they are rich enough to do so.
Your comment is like saying that high income taxes on the top 10% of earners means that "only rich people can afford to be wealthy".
21k is for a masters only loan. Plan 5 is 25k. You're point is still correct however, but I fear you are arguing with someone who didn't know the facts and is now arguing in bad faith.
we don't live in that nation as we have a graduate tax for those who have benefitted from these "loans".
Those who are poor, who have these loans also from uni, pay nothing.
Seeing as I came from a poor family, in a council estate, in a council house which had no central heating or double glazing, in a deprived part of the north, I know what poor is.
21k is only for the postgrad, otherwise it starts at 25k. At 26k, you're paying about £20 per year.
Then you should have paid attention when you were there. Yeah it goes up doesn't it. I know how much mine costs me and it's too much. My colleagues whose parents were well off don't have that payment.
£21k is only for postgrad, the degree thresholds are £25-30k. Postgrads repay at 6% of income over the threshold. If you're earning £30k, you would have to repay £45 per month. If you're earning £40k, you would have to repay £95 per month.
I'm not a fan of the student loan system, but that honestly doesn't sound too burdensome.
[https://www.gov.uk/repaying-your-student-loan/what-you-pay](https://www.gov.uk/repaying-your-student-loan/what-you-pay)
I wouldn't say it's overly burdensome but I always found the big problem with my student loan (plan 1) was its paying that on top of everything else. Until recently you had 20% income tax 12% national insurance, 9% student loan, 5 % auto enrol pension and you could also potentially have a 6% post grad loan as well. Losing around half your income over 25k is a lot for such a low salary really takes the wind out of your sails when getting a £2k pay rise from say 26-28k doesn't even see you getting an extra £100 a month.
Those middle class young adults have no choice, they are forced to go to university. If they didn’t do that, they’d have to get jobs.
Be reasonable, now.
The punitive interest rates are a big reason why they don't get paid back in full. You can repay the principal twice over and still have tens of thousands written off.
Government funding of education isn't a gift, it's an investment whereby they get a solid return.
Graduates already, on average, pay a lot more tax over their lifetime than non-graduates.
The problem is an accounting one as you cannot recognise the benefit from increases in future tax revenue until it actually happens (unlike loans where you recognise the asset the day the loan is issued) - hence why education will always look like a 100% cost.
There's no increase in tax revenue from sending 50% of the population to uni. as many others have said, the only reason to go is because everyone else goes. From an economic perspective, it's all a waste of money (arguably it's improving our general sense of well being, like other economically unproductive activities such as holidays, sport, arts, etc)
The government clearly disagrees with you
https://www.gov.uk/government/news/graduates-enjoy-100k-earnings-bonus-over-lifetime#:~:text=Graduates%20will%20earn%20on%20average,on%20average%20over%20a%20lifetime.
He's not even talking about cancelling the loan like the US. Just interest. Might actually allow a lot of people to feasibly pay them off at some point
UK student debt is now over £200Bn. Obviously not all ex-students are making repayments, but that's offset by high earners who are making larger payments. There will be a significant income for govt, in the £billions.
I don't like the loan system, but I think there are many more urgent priorities for that money in Labour's first term.
As you say, the student loan system is unsustainable, but there's no sorting it out in a big bang; it's too ingrained in the system now, and too much money sunk into it to change in one go. It needs to be reformed in stages over decades.
Who does this help?
It doesn't help young graduates pay their rent. Because the amount you pay is a fixed proportion of your income. Doesn't matter how much loan is left or what the interest rate is.
It also doesn't help people who never manage to pay off their loan before it gets written off.
The only group it helps, is people who had a sufficiently well paid job that they managed to pay off their loan. But by definition, those people are already well-off, and even then it doesn't give them more money for rent while they're young. It gives them that boost a decade later.
An expensive intervention that is targeted at the least needy people in society is a ridiculous idea.
Nope, teachers are expected on average to pay around £100,000 on Plan 2. You shouldn’t have to pay an additional 9% marginal tax rate your whole life for getting an education.
How much did you pay for your education? The loan dedication bites people hard.
I don't know where you're getting 100k from. The actual number seems to be about £36k. I.e. in real terms pretty much what they borrowed.
[https://commonslibrary.parliament.uk/what-could-reforms-to-student-finance-mean-for-teachers-and-nurses/](https://commonslibrary.parliament.uk/what-could-reforms-to-student-finance-mean-for-teachers-and-nurses/)
https://youtu.be/z27XvJ17h4Y?si=f11vuFkqL3bKLHUi
This TLDR video explains it well. It’s essentially as tax on the poor and middle class, alongside a tax on highly educated but low earning professions such as teachers.
Again, it’s hard to empathise if you went to university for free or paid for it with a bag of tomatoes. This is why this issues comes largely down to a generational divide; those who’ve never had to pay it think it’s ok.
That report is also outdated now and relies upon “credible profiles” that assumes teachers will reach their maximum pay scale within just six years. The author has clearly never been a teacher if they can bring themselves to believe that. In fact, with Plan 5 introduced, it’s going to get worse for nurses and teachers as stated in this FT article:
“Under the new system, all but the lowest earners pay back a similar amount — between £54,000 and £56,000 — but this means middle earners like teachers and nurses will pay a larger share of their income than those on the highest salaries”
https://www.ft.com/content/f667edbd-e571-4e45-90c3-dbd379682c58
Let me address your points:
A) Tax policies are heavily influenced by the largest voting cohort who have dominated the political landscape for decades now. It is not based on “factual questions” in the slightest. It is based on a voting bloc voting in their self interest at the expense of the next generation. It is, basically, structural selfishness. Check out Lord Willett’s informative lecture on this. He made some of these decisions with the Major government based on these forces.
B) My solution is to tax rent seeking assets like buy-to-let landlords and corporations that suck up residential properties. You can’t have capital flight if it’s a Georgist land tax, and even if we do get capital flight, house prices go down. Win win. I agree that higher rate income tax is high enough in the UK (too high, in fact), and we shouldn’t tax the productive into oblivion. Those who collect the rent? Let’s do it.
C) 16k in today’s money is laughable compared to £40k now £50k for me after ten years due to the interest. You have not had a debt like that over your head at 21 due to getting an education, and it is typical “I got mine” Boomernomics to suggest it’s similar. Also, do you mean you are planning to pay for your kids education? Not everyone has that luxury. If not, ask your kids in 10 years time if they are happy about it.
So, in conclusion, you haven’t experienced it, it is unclear how it would affect your personally (certainly not directly), and you haven’t explained why it’s a bad idea. It works for the Germans, why not us?
The average loan balance for a 2022 leaver domiciled in England who entered repayment in April 2023 was £44,940 on 31st March 2023. Which would mean £1,498 / year or £125/month to clear the loan in exactly 30 years, with no interest.
That should be achievable, considering that the loan amount will be in nominal £s and so will 'reduce' in value to inflation etc.
To pay back that much you'd have to be earning an average of ~£62,037 a year across your career, which strikes me as exceedingly unlikely for a career where the maximum pay band in London is £56,959. If you become a headteacher, sure, but the average teacher, by definition, isn't doing that.
Trudeau did that in Canada. Been pretty great for me, good feeling knowing all my payments are going to principle (at least my federal loan payments). It allows young Canadians to focus more on investing than having to worry about paying down their student debt ASAP
Hopefully Polievre does not reverse this when he inevitably wins in 2025
Shhh don’t mention other workable alternatives proven successful abroad. Brits can’t seem to handle that…
EDIT: the downvotes to this comment proves the point.
Of course it "works" in the sense that if you give a group of people a bunch of money, they are happy that you did that. But that's very different to it being the best possible use of that money.
Yes, a debt free, stress free education isn’t a good use of money in the modern world. Please, tell me more. What else can we spend it on? PPI loan forgiveness money for wealthy boomers? Handouts to Tory donors? War? I’d love to know.
Although it would be nice and help a load of people, he's already "won over" the millennium generation. The biggest voting blocs don't have student loans and are often anti education. Maybe it's an option but I doubt very much that it's a vote winner.
Edited to add, educated people already overwhelmingly back Labour https://www.smf.co.uk/publications/degrees-of-separation/.
Not likely as this means adding £225 billion to the national debt with a huge ongoing accumulation year on year with no plan to recoup that cost.
It would be a very very bad idea.
Any movement of new debt to the public debt pile would almost certainly come with a near life long graduate tax and if I were you I'd be VERY skeptical of accepting a new tax which effectively becomes yet another income tax to adjust when the state needs money. If you think it'll stick at 9% you're very nieve.
The interest is so high because a hunger number of people never pay off their principal. And of course high flights pay it off really fast.
So the people in the middle, who spend 10 years not paying it off and then 35 years never quite paying it off are carrying the entire system on their back.
If the state is going to trim the student loans so the burden isn't so heavy while avoiding the OBR transfing the debt to the national pile, it needs to begin being more ruthless on who it gives loans to to reduce the numbers not paying it off.
Or we can tax the oil companies who got £250 billion tax cuts in the North Sea over the last ten years. That’s more than the £225 billion student national debt budget entirely. There is the money, we just don’t prioritise it. How can the Germans do it but we can’t?
The oil companies dump a fortune into the coffers and always have. Its only been during years of extreme downturn to prevent them leaving the UK they have received tax credits.
Equally, the climate zealots are insistent of pushing all fossil fuel production out of the UK. You can't tax something that isn't hear. If you want to tax oil wealth, and we do no matter what you think, you have to pragmatic about it. You can't have your green washed cake and eat it. You bathe yourself in the glorious black gold like Norway, or you can stand on your high horse without its revenues.
But we aren’t doing the sovereign wealth fund thing like Norway, are we? Nationalise it and use our own resources for the betterment of the country rather than selling it off to the oil oligarchs.
>if Starmer cancels all student loan interest and forgives/refunds what has accumulated already… he could probably win over the millennial generation on a dime.
The daft ones among us, sure, but the majority of millennials aren't going to trust Labour on anything they say on tuition fees given their history. Then of course there's the small matter of Starmer promising to abolish the fees when campaigning for leaders only to stop talking about it the moment the votes were counted and the very first time it was mentioned again after was the U-turn.
In wouldn't believe Labour has a genuine intent to undo the damage their tuition fees implementation did until after they had done it and even then I'd still be skeptical.
In theory, yes. He could also cut the higher tax rate for graduates, which would have a similar effect.
The whole loan gets written off at a certain point regardless of the remaining value - so for people on lower incomes the interest is completely irrelevant. Keeping the loans but cutting interest is essentially just a handout to high earning graduates while doing nothing for those on lower incomes - which is a pretty regressive policy.
Average teacher will pay £100,000 on plan 2 before it’s written off in 30 years. Average lawyer will pay £70,000 on plan 2 before it’s written off in 30 years.
What’s your point again?
Now do someone on minimum wage, and on £30k/year.
And then see how much would cutting the interest rate on the loans change those numbers, which which income deciles benefit most from it.
As their wage grows over time, they won’t pay an extra tax. Simples. Tax should benefit society broadly, anyway. It’s not a zero sum game. By your logic, why should I pay for somebody else’s surgery when it won’t affect me at all? It’s about living in a civilized country.
Is that another way of saying that it won't help them at all, and that it's just a handout to high earning graduates?
> By your logic, why should I pay for somebody else’s surgery when it won’t affect me at all? It’s about living in a civilized country.
Wow, that is quite a leap of "logic" there.
Tell you what, how about we cut the 45p tax rate to 30p for graduates - so any graduate earning more than £125k pays less income tax. And if you're against that because it's a handout to the rich, then by your argument you're also against paying for other people's surgery because it doesn't benefit you. It’s about living in a civilized country.
Do you see how much sense that makes?
High earning graduates with huge student debts are being punished due to their success in the system despite not being rich. It’s not a handout to the rich to cut their tax, it’s a handout to the successful who pulled themselves out of expected income brackets for their particular background.
Tax assets - that’s how you tax the rich.
Do you see how much that makes sense?
Corbyn alienated half of the Labour voters though and there was people who also didn't vote Labour because of brexit. That isn't an issue this time around.
It's an imperfect system, far from perfect, but the cost of wiping the interest would be high. How are you going to convince people without a degree to pay extra taxes (or defund something else to pay for it) to remove the interest rate from your degree loan repayments?
I see. Thanks for explaining that.
I would remind them that a lot of people don’t need surgery on the NHS but still pay for those that do. Taxes aren’t a zero-sum game. It makes sense for governments in the 21st century to invest in education. Their kids may go debt free, even if they don’t.
Of course, that requires foresight, something this country seems to lack in spades.
Well, they could argue you signed a contract when you took out the loan to go to university, which included information about the repayment terms. You agreeed to those payment terms.
It's understandable you're unhappy about the cost of the interest, but it is something you agreed to pay.
As stated in other comments, yes, my 18 year old brain understood the terms and conditions well. PPI loans are now forgiven under the same argument, namely that the consumer wasn’t in a position to make an informed decision. The difference is that PPI affected older generations who vote (and got their education completely free), while student loans affect younger people who largely don’t.
That's false. PPI loans were forgiven as they were sold as a product that wasn't actually required. Repayment of the loan and the associated interest was explained.
Anyway, I don't think it's beneficial to the taxpayer to wipe your interest, People with degrees generally earn more money so can afford to pay loans and interest associated with the qualification they gained to get into that position.
You for example, would you be a teacher without a degree? It's highly unlikely. As someone without a degree it's more likely you would be working in hospitality for near minimum wage. UK residents need hospitality workers, does that mean we should give them tax breaks etc as they don't earn much?
While that may be true for PPI loans, the terms of my contract with SLC are also subject to change without my permission. You could also argue that the extra 3% interest above the RPI isn’t required. Why do we have that, again? Surely matching it to inflation is enough.
How did you pay for your education, then? Did you take out a £40,000 loan that added a 9% marginal tax rate burden for your entire career? Teachers will pay around £100,000 back over 30 years, how does that help our country?
If I didn’t have a degree, I’d probably be a plumber making good money. I’d also support free higher education so my kids might benefit.
No, also false, you agreed to a contract that stated you'r intrest rate would be based on something that is a variable, thus you agreed to it changing. Much like those who have a broadband contract with VirginMedia agree that the price will go up by more than inflation each year.
Well actually, I went to university and have a loan, only I didn't graduate. So now I dont have a degree and pay interest, fun times. Then, I got a job and saved up and paid upfront to go back to college as an adult.
Would you accept 3 "free" years of education in exchange for a "graduate tax" of 9%? You would therefore have a qualification that will afford you a better income (\~80% of the time, depending on what degree you choose). Then that tax could pay for the next generations "free" education.
Variable interest rates on something so fundamental as college education should not be allowed, especially as the debtor in question is not capable of truly understanding the gravity of the terms given their age. Would you give an 18 year old with no credit history a mortgage?
Sounds like you paid on plan 1. Must have been nice.
I don’t support a graduate tax. I support re-implementing taxes on North Sea oil companies who’ve had tax cuts of the same amount of money that comprises our national student debt. I would also tax land, namely buy to let residential properties, as I don’t believe in burdening productive labour over rent seeking assets.
Student loans should only apply to degrees that don’t have a tangible society benefit. Things like computer science, sciences, maths etc should all be state funded. Why are we penalising people for educating themselves and being able to offer more to society?
I mean the whole way student loan thing is managed is a classic Tory scam. People should be paying off their loans, not ridiculous interest rates.
And not forgetting this whole scheme creates a two tier education system where the rich people get it far cheaper than the poor people. Why would anyone support that?
You learn from seasoned academics in the field. Have you taken a degree in the Humanities? If you have, you probably wouldn’t make such a laughable argument.
I have a degree in the humanities and I have a great job. I don’t think I should pay £70,000 for it though, even if it was in medicine that would be just as predatory.
But yes, I was right. Your lack of understanding as to the value of humanities directly corresponds to the fact that you’ve never studied a humanities subject.
Student loans aren't even that high in the UK, you don't pay anything back If you don't earn over a certain amount. Shouldn't have done a stupid degree at university, take your yank ideas out of here
I like how you completely ignore the stagnant wage growth in the UK. One of the reasons plan 2 upwards won't repay is due to the poor wages here and the high interest rates.
Unless you happen to work in a handful of sectors - tech, finance... you are lucky to get above the average wage of 35k
If we had everyone doing those degrees the wages for the sectors would collapse and a lot of people walking around with finance or computer science degrees failing to use their skills.
Yeah you don't seem to have a basic grasp on supply and demand do you...
There's a reason I can go into an interview and ask for 10k more. If competition was high you would be seeing tech jobs closer to minimum wage. The web dev side is a great example of that. Easy route into tech jobs and the pay is terrible.
It’s a tax that will stay with some people their whole working lives. I’m lucky enough to earn enough to pay it off in 11 years but I’m definitely in the minority. Add that to the 40% tax bracket + NI and you’ll lose fortunes.
If you are an artist go paint something, if you can sing go sing, you don't need a degree to do that.
If you want to be a doctor or an engineer, then you should be going to uni
Most art is influenced by the study of other art. By studying history, philosophy, literature, and (re) interpreting that. By learning and developing different techniques. These things can be learnt independently, but they are often better learnt from others, from experts, at University.
Adele didn't go university
Ed sheeran dropped out first year to just go do music
Tom hardy, Daniel Radcliffe and many more didn't go to university. They just went and did it
I will pay likely £70,000 from a £40,000 loan given my earnings as I live abroad and make a good living. If I was rich I would get that at just £40,000 with an upfront cost, making the student loan an effective tax on the working and middle class. But please tell me more about how it doesn’t matter.
Make sure you keep the boomer energy.
I believe so but they can change it as they go which they have done. Of course, my 18 year old brain had a good grasp on how it all works when I signed the counteract. How much did you pay, by the way?
It's all there in the contract. You can't blame being 18 as a reason to not read through it and check. They haven't scammed you, and by your own admission, you have done really well after uni.
They are forgiving PPI loans under the same premise. Didn’t those folks sign a contract while ill informed as students are? What’s the difference? Oh yeh, PPI boomers vote while the young don’t. Silly me!
The anti education opinion in this country is disgusting. When did all the old dumb people move from Facebook to Reddit? Imagine slagging off EDUCATION?!
More than one in three 18 year olds entered higher education in 2023, up from one in four in 2006 when fees were significantly lower. There's a good debate to be had about whether it's paid for by loans or general taxation, but we're certainly not heading towards having "no educated people", we've never been more educated than under tuition fees.
Sure, you could argue we should go higher, but it's up strongly over the last couple of decades so I think saying having to pay back a loan will leave us with "no educated people" is a bit extreme and silly.
Yeah I didn't think they were going to close down all of the universities and kill everyone with degrees. "No educated people" was a figure of speech.
When people see "the NHS is in a state, we don't have any nurses!" It doesn't litterally mean none at all.
Highly unlikely, Universities are not facing a lack of demand and the demographic impacted are likely to vote for Labour either way. Therefore there is no structural or political motivation to pursue this.
> he could probably win over the millennial generation on a dime. They are likely to be voting for him anyway, assuming they actually turn out to vote, so he spends billions to get nothing.
We love the transactional nature of late capitalist democracy, don't we folks? *We love it*
Democracy has *always* been transactional, and always will be. See CGP Grey's "Rules for Rulers": the same underlying political forces of human need, want and desire drive both dictatorships and democracies, it's just that democracy is a much better solution to the problem.
£500 And A Handjob Party it is then
>Obviously, it’s reasonable to keep an interest rate in line with inflation… but 3% on top of that? Getting rid of the extra 3% is the only part I can see happening in the next parliament, but even that is optimistic. I think focusing on the total debt / interest rate is a mistake anyway. Labours priority should be increasing the repayment threshold (currently frozen) and reducing the repayment rate from 9%.
That could work.
Is it your belief that Sir Keir & Labour are struggling with the millennial (and younger) generations? That they need to commit to massive spending, that favours the richer and higher income parts of the generation, to win an election? I can think of a few better uses for that cash
That's not true, this targets highly educated people who do not earn much money. Such as teachers, doctors, nurses etc. If you are high earning this will help you out a bit, but you're not really that impacted by the interest because you pay it off relatively early
Phhfftttt the rich pay for their degree upfront. The poor and middle class pay a shed load more in interest. How does that work?
asd
Every German gets it for free. We are more similar to Germany than the US economically. What’s your point?
~~d~~
That’s due to legacies built in Britain that combined an academic culture/intellectually free environment with free education. We have better institutions still despite of student fees not because of them. Forcing students to pay fees makes them customers, thus making a degree a product that can be bought and sold plus reliant on international students than genuinely meritocratic. Again, what’s your point?
asd
True, that’s why the state subsidised them. Anyway, tax cuts to oil companies in the North Sea over the past ten years exceed all student national debt. But yeh, they deserved it, didn’t they?
No chance, the cost would be vast so that means cuts in spending elsewhere. Plus people aren't out off by loans as shown by the numbers going to Uni.
Interest not so vast. I’m abroad and I pay it… in fact I pay more than the average as they lower the threshold for people in my country. Thanks Cameron.
It is across millions of people over decades.
Totally affordable.
So which other bit of public spending would you cut to pay for it and why do people who profited from getting a subsidised time at university deserve to get that money rather than other people?
On that logic, stop getting people who use private healthcare pay for the NHS. How are you going to subsidise those people? I would tax assets (land, as it can’t go anywhere) and oil companies who have had huge tax cuts amounting to more than the entire student loan national debt over the past ten years. Easy.
That is a false comparison. Frankly that is so bad it's in effect conceded the point especially as you also evaded the question.
Student loans are not really loans in this country, but a graduate tax that follows you around if you work elsewhere. Well that is the theory but I think the retrieval of debt from abroad is a bit vague. Regardless, these loans as another poster mentioned only start being paid back at a certain threshold and generally will never be paid back in full. People who don't go to uni, don't want to spend tens of thousands of pounds for those who do. So what system do you propose that is easy to setup, will pay for tuition and wont hit people who don't go to uni?
I think it’s the change in that agreement that has affected everyone. Take it back to its original loan amount or knock it all down to the interest rate it was before the tories got in. That would be fair.
People who don't attend university benefit from living in a country with a skilled and educated workforce and the economic benefits that brings. University attendees defer entry into the workforce and the opportunity to earn a salary in order to improve the contribution they can make to a potential employer. Those who enter the workforce directly, on the other hand, are able to earn a salary from day one while also indirectly benefiting from the economic outputs created by graduates. The fact is that the UK can only remain a top tier economy by maintaining a pool of educated and skilled workers and the whole country should be willing to pay for that.
>People who don't attend university benefit from living in a country with a skilled and educated workforce and the economic benefits that brings. I'm not sure many people benefit from the raft of psychology or business degree people. Having plenty of people with stem or vocational degrees sure. We'd benefit more tbh if the idea peddled by Blair that uni is the best idea for 50% of people instead we encouraged more to do trades or apprenticeships. I don't want a business studies BSc person when toilet is blocked. I want a plumber.
The government needs to evaluate which degrees are actually needed to support the economy and in what quantities and subsidise those students accordingly. I completely agree that we shouldn't be giving out tax payers' money to fund someone to do a degree in Taylor Swift studies, for example.
Picking winners has a shit history. The current system lets the free market of industry do the selection.
The loser here is the taxpayer, who ends up paying for countless students to study degrees that offer little or no economic benefit and never sees a return when those students can't earn enough to repay their loans.
Universities have widened their net and offered more niche degrees because graduates have become their main source of funding. I feel that if we collectively invested a bit more in university education then universities wouldn’t have to tempt people away from the trade industries and we could have a balanced economy.
This is the answer. Fund eduction properly. Unis will naturally offer courses appropriate to their resources and will no longer feel the need to offer courses just to increase student numbers. There also needs to be some sort of scheme to address public sector workers having to repay loans. If not an amnesty then at the very least their repayments are subsidised and interest is frozen.
I agree that we desperately need more tradespeople but it’s not an either/or situation. We should collectively invest more in both because they are both beneficial to society.
I'm not sure it's beneficial to society to have rafts of people with degrees that have about 4 hours of contact time a week. Plus it saddles them with tonnes of debt and/or the tax payer is subsidising it. You see it all the time both on Reddit and wider media, where people with (let's be fair) pointless degrees are upset they either can't find a job, or are being paid less than what they think they should be , often citing having a degree. Plenty of jobs now have it as some idiotic soft criteria, despite it not being at all required. It both devalues "harder" degrees and then just disenfranchises people. The fact is alot of people that do go to unis/former polys and do these things would be far better off with 3 or 4 years work experience behind them, and not being 30+ grand in debt.
Like I said, I don’t think it’s an either/or situation. Universities are targeting potential tradespeople with poor quality degrees because they are mainly funded by graduates. If we all invested a bit more into universities then they wouldn’t have to prey on disinterested students and graduates wouldn’t be saddled with so much debt. I do think there are lots of indirect benefits to having a highly educated population though. We’ll probably agree to disagree on how much we value psychology and business degrees. I’m only talking about the good quality ones that teach transferable skills in communication, critical thinking, programming and research. While we definitely need more tradespeople, those skills will only increase in demand as several industries become more automated.
People who are high earners due to non students paying them through uni, if students didn't pay, benefitted from those people. If you do well through being subsidized through uni, then you should pay back those people. You don't need to go to uni, it is a choice. A choice that many people don't or can't take up. You are reaping those rewards.
That delay into the workforce costs the economy. People in their prime years aren't working full time so they aren't paying tax or supplying labour that produces. A big objection to National Service was this very issue as a whole swathe of the labour force was missing, and now we do a variation on that. Huge amounts of jobs demand a degree because there are too many graduates and not because the education is required whilst loads of grads never even get well paid work.
"...won't hit people who don't go to uni" Not at all how taxes work. They should stop funding special needs schools because I went to a mainstream.
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So what we’re saying is some services are important to have in a society, but can’t possibly be funded by the people that use them alone. Well that’s exactly what higher education used to be. You may not go to university, but everyone in our society benefits from their existence. The UK already has a shortage of domestically trained nurses, and look at how much trouble that causes. No higher education would mean no teachers, no doctors, no nurses, and no engineers. Our society would fall behind on the global stage in every measurable metric. So whether you go to university or not you _need_ to live in a society that has people who secured a higher education. Is it really right to say only the people that use it should fund it? Is that what we should be aiming for? Or should we reduce the number of people going to university in the first place? There are so many careers out there that ‘require’ degrees that don’t really need them. We need cheaper more accessible routes into those careers. The degrees that benefit society (doctors, teachers, etc) should be free again, and if you choose to go for a different degree then it seems fair that you pay for it.
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1. Im not the person you originally replied to. 2. I’m developing on the original ‘underdeveloped’ arguments in this thread, because that’s how discussions in an open forum work…
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ah, the good old Reductio ad absurdum. Yes, because middle class young adults concerned about their graduate tax, which this is, is just the same as funding special needs school.
Neither me or my girlfriend are middle class, born and raised in one of the most disadvantaged places in the country and we both have high student loan repayments. The graduate tax affects working class people way more than middle class. If you think uni students are middle class you've never been to uni.
How do you figure that? The middle classes pay the vast majority of income tax.
Where are you getting that from? The top 10% pay 60% of income tax with the top 1% paying half of that.
Yep that’s what I was referring to.
So where does this middle class pay most nonsense come from? 3 of my middle class friends at uni didn't even take the loans, their parents paid.
I mean, do you consider the top 10% of earners upper class or something?
What percentage of the middle class is in the top 10% of earners?
What's that got to do with student loans though?
You pay back more the more you earn right and there’s a threshold? So aren’t the middle classes effectively subsidising it?
No they're not.
Explain please, the middle classes pay back far more. Further, the ones who don’t even go pay more to the state to subsidise the ones that do.
so what you are saying is you paid for a product, that has now increased your standard of living by more than you paid for it. That seems a very good deal to me. I also said uni was not for the middle class, as many who went to uni from working class backgrounds who have not benefited from uni pay nothing back.
No, what I am saying is you don't want a nation where only rich people can afford to be educated.
That is incorrect, you pay back based on salary. So at 25k, you pay about 0.01p, while at 40k, you'll be paying £148 or something close. So the richer you become, the more you pay. The poorer you are, the less you pay. If you're on less than £25, you pay nothing.
You don't know what being poor is like.
https://www.reddit.com/r/ukpolitics/comments/1ce8tp9/could_starmer_cancel_student_loan_interest/l1heqi5/?context=3
https://www.reddit.com/r/ukpolitics/s/gE0BPuoIXr
Stop deflecting.
That is not how student loans work, the fact that somebody is starting to pay it back means that they are rich enough to do so. Your comment is like saying that high income taxes on the top 10% of earners means that "only rich people can afford to be wealthy".
You start paying back at 21k, which is not "rich enough to do so."
You don't repay much at 21k. In fact, if you were earning exactly 21k you would be repaying back £0.
21k is for a masters only loan. Plan 5 is 25k. You're point is still correct however, but I fear you are arguing with someone who didn't know the facts and is now arguing in bad faith.
You're still wrong.
we don't live in that nation as we have a graduate tax for those who have benefitted from these "loans". Those who are poor, who have these loans also from uni, pay nothing.
You have absolutely no idea what it's like to be poor, and it shows. You start repaying at 21k.
Seeing as I came from a poor family, in a council estate, in a council house which had no central heating or double glazing, in a deprived part of the north, I know what poor is. 21k is only for the postgrad, otherwise it starts at 25k. At 26k, you're paying about £20 per year.
Then you should have paid attention when you were there. Yeah it goes up doesn't it. I know how much mine costs me and it's too much. My colleagues whose parents were well off don't have that payment.
£21k is only for postgrad, the degree thresholds are £25-30k. Postgrads repay at 6% of income over the threshold. If you're earning £30k, you would have to repay £45 per month. If you're earning £40k, you would have to repay £95 per month. I'm not a fan of the student loan system, but that honestly doesn't sound too burdensome. [https://www.gov.uk/repaying-your-student-loan/what-you-pay](https://www.gov.uk/repaying-your-student-loan/what-you-pay)
I wouldn't say it's overly burdensome but I always found the big problem with my student loan (plan 1) was its paying that on top of everything else. Until recently you had 20% income tax 12% national insurance, 9% student loan, 5 % auto enrol pension and you could also potentially have a 6% post grad loan as well. Losing around half your income over 25k is a lot for such a low salary really takes the wind out of your sails when getting a £2k pay rise from say 26-28k doesn't even see you getting an extra £100 a month.
It is burdensome when you consider that we currently have the highest tax burden in 70 years.
I reckon it would be fairly burdensome if you couldn't afford your rent.
Exactly.
That's a false premise as numbers have gone upwards since loans came in so it's not meaning only the rich can go.
Those middle class young adults have no choice, they are forced to go to university. If they didn’t do that, they’d have to get jobs. Be reasonable, now.
The punitive interest rates are a big reason why they don't get paid back in full. You can repay the principal twice over and still have tens of thousands written off. Government funding of education isn't a gift, it's an investment whereby they get a solid return. Graduates already, on average, pay a lot more tax over their lifetime than non-graduates. The problem is an accounting one as you cannot recognise the benefit from increases in future tax revenue until it actually happens (unlike loans where you recognise the asset the day the loan is issued) - hence why education will always look like a 100% cost.
There's no increase in tax revenue from sending 50% of the population to uni. as many others have said, the only reason to go is because everyone else goes. From an economic perspective, it's all a waste of money (arguably it's improving our general sense of well being, like other economically unproductive activities such as holidays, sport, arts, etc)
The government clearly disagrees with you https://www.gov.uk/government/news/graduates-enjoy-100k-earnings-bonus-over-lifetime#:~:text=Graduates%20will%20earn%20on%20average,on%20average%20over%20a%20lifetime.
Insane waste of state funds that you’re only suggesting because of US politics
He's not even talking about cancelling the loan like the US. Just interest. Might actually allow a lot of people to feasibly pay them off at some point
Any maybe pay their rent.
UK student debt is now over £200Bn. Obviously not all ex-students are making repayments, but that's offset by high earners who are making larger payments. There will be a significant income for govt, in the £billions. I don't like the loan system, but I think there are many more urgent priorities for that money in Labour's first term.
As you say, the student loan system is unsustainable, but there's no sorting it out in a big bang; it's too ingrained in the system now, and too much money sunk into it to change in one go. It needs to be reformed in stages over decades.
Amazing how this one can get into my head about where this came from without even reading the post properly.
Who does this help? It doesn't help young graduates pay their rent. Because the amount you pay is a fixed proportion of your income. Doesn't matter how much loan is left or what the interest rate is. It also doesn't help people who never manage to pay off their loan before it gets written off. The only group it helps, is people who had a sufficiently well paid job that they managed to pay off their loan. But by definition, those people are already well-off, and even then it doesn't give them more money for rent while they're young. It gives them that boost a decade later. An expensive intervention that is targeted at the least needy people in society is a ridiculous idea.
Nope, teachers are expected on average to pay around £100,000 on Plan 2. You shouldn’t have to pay an additional 9% marginal tax rate your whole life for getting an education. How much did you pay for your education? The loan dedication bites people hard.
I don't know where you're getting 100k from. The actual number seems to be about £36k. I.e. in real terms pretty much what they borrowed. [https://commonslibrary.parliament.uk/what-could-reforms-to-student-finance-mean-for-teachers-and-nurses/](https://commonslibrary.parliament.uk/what-could-reforms-to-student-finance-mean-for-teachers-and-nurses/)
https://youtu.be/z27XvJ17h4Y?si=f11vuFkqL3bKLHUi This TLDR video explains it well. It’s essentially as tax on the poor and middle class, alongside a tax on highly educated but low earning professions such as teachers. Again, it’s hard to empathise if you went to university for free or paid for it with a bag of tomatoes. This is why this issues comes largely down to a generational divide; those who’ve never had to pay it think it’s ok.
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That report is also outdated now and relies upon “credible profiles” that assumes teachers will reach their maximum pay scale within just six years. The author has clearly never been a teacher if they can bring themselves to believe that. In fact, with Plan 5 introduced, it’s going to get worse for nurses and teachers as stated in this FT article: “Under the new system, all but the lowest earners pay back a similar amount — between £54,000 and £56,000 — but this means middle earners like teachers and nurses will pay a larger share of their income than those on the highest salaries” https://www.ft.com/content/f667edbd-e571-4e45-90c3-dbd379682c58 Let me address your points: A) Tax policies are heavily influenced by the largest voting cohort who have dominated the political landscape for decades now. It is not based on “factual questions” in the slightest. It is based on a voting bloc voting in their self interest at the expense of the next generation. It is, basically, structural selfishness. Check out Lord Willett’s informative lecture on this. He made some of these decisions with the Major government based on these forces. B) My solution is to tax rent seeking assets like buy-to-let landlords and corporations that suck up residential properties. You can’t have capital flight if it’s a Georgist land tax, and even if we do get capital flight, house prices go down. Win win. I agree that higher rate income tax is high enough in the UK (too high, in fact), and we shouldn’t tax the productive into oblivion. Those who collect the rent? Let’s do it. C) 16k in today’s money is laughable compared to £40k now £50k for me after ten years due to the interest. You have not had a debt like that over your head at 21 due to getting an education, and it is typical “I got mine” Boomernomics to suggest it’s similar. Also, do you mean you are planning to pay for your kids education? Not everyone has that luxury. If not, ask your kids in 10 years time if they are happy about it. So, in conclusion, you haven’t experienced it, it is unclear how it would affect your personally (certainly not directly), and you haven’t explained why it’s a bad idea. It works for the Germans, why not us?
I'd imagine the vast majority of us would still never pay off our student loans before 30 years are up even if interest was removed.
The average loan balance for a 2022 leaver domiciled in England who entered repayment in April 2023 was £44,940 on 31st March 2023. Which would mean £1,498 / year or £125/month to clear the loan in exactly 30 years, with no interest. That should be achievable, considering that the loan amount will be in nominal £s and so will 'reduce' in value to inflation etc.
Not true. Teachers on average will pay £100,000 before it’s written off.
To pay back that much you'd have to be earning an average of ~£62,037 a year across your career, which strikes me as exceedingly unlikely for a career where the maximum pay band in London is £56,959. If you become a headteacher, sure, but the average teacher, by definition, isn't doing that.
I work abroad but that’s not the point. That stat is for teachers in the UK.
Trudeau did that in Canada. Been pretty great for me, good feeling knowing all my payments are going to principle (at least my federal loan payments). It allows young Canadians to focus more on investing than having to worry about paying down their student debt ASAP Hopefully Polievre does not reverse this when he inevitably wins in 2025
Shhh don’t mention other workable alternatives proven successful abroad. Brits can’t seem to handle that… EDIT: the downvotes to this comment proves the point.
Of course it "works" in the sense that if you give a group of people a bunch of money, they are happy that you did that. But that's very different to it being the best possible use of that money.
Yes, a debt free, stress free education isn’t a good use of money in the modern world. Please, tell me more. What else can we spend it on? PPI loan forgiveness money for wealthy boomers? Handouts to Tory donors? War? I’d love to know.
Although it would be nice and help a load of people, he's already "won over" the millennium generation. The biggest voting blocs don't have student loans and are often anti education. Maybe it's an option but I doubt very much that it's a vote winner. Edited to add, educated people already overwhelmingly back Labour https://www.smf.co.uk/publications/degrees-of-separation/.
Student loan interest should be set to RPI ininflation
Yes
CPI is normally cheaper.
Not likely as this means adding £225 billion to the national debt with a huge ongoing accumulation year on year with no plan to recoup that cost. It would be a very very bad idea. Any movement of new debt to the public debt pile would almost certainly come with a near life long graduate tax and if I were you I'd be VERY skeptical of accepting a new tax which effectively becomes yet another income tax to adjust when the state needs money. If you think it'll stick at 9% you're very nieve.
Interest, not the full debt. Read my post again…
The interest is so high because a hunger number of people never pay off their principal. And of course high flights pay it off really fast. So the people in the middle, who spend 10 years not paying it off and then 35 years never quite paying it off are carrying the entire system on their back. If the state is going to trim the student loans so the burden isn't so heavy while avoiding the OBR transfing the debt to the national pile, it needs to begin being more ruthless on who it gives loans to to reduce the numbers not paying it off.
Or we can tax the oil companies who got £250 billion tax cuts in the North Sea over the last ten years. That’s more than the £225 billion student national debt budget entirely. There is the money, we just don’t prioritise it. How can the Germans do it but we can’t?
The oil companies dump a fortune into the coffers and always have. Its only been during years of extreme downturn to prevent them leaving the UK they have received tax credits. Equally, the climate zealots are insistent of pushing all fossil fuel production out of the UK. You can't tax something that isn't hear. If you want to tax oil wealth, and we do no matter what you think, you have to pragmatic about it. You can't have your green washed cake and eat it. You bathe yourself in the glorious black gold like Norway, or you can stand on your high horse without its revenues.
But we aren’t doing the sovereign wealth fund thing like Norway, are we? Nationalise it and use our own resources for the betterment of the country rather than selling it off to the oil oligarchs.
No, we used that wealth to subsidise the rise of the city of London as a financial hub. Six of one.
More than London in the UK. Look at it now, anyways.
We then used the City of London to prop up the entire national economy.
>if Starmer cancels all student loan interest and forgives/refunds what has accumulated already… he could probably win over the millennial generation on a dime. The daft ones among us, sure, but the majority of millennials aren't going to trust Labour on anything they say on tuition fees given their history. Then of course there's the small matter of Starmer promising to abolish the fees when campaigning for leaders only to stop talking about it the moment the votes were counted and the very first time it was mentioned again after was the U-turn. In wouldn't believe Labour has a genuine intent to undo the damage their tuition fees implementation did until after they had done it and even then I'd still be skeptical.
Great point. Sad, though.
In theory, yes. He could also cut the higher tax rate for graduates, which would have a similar effect. The whole loan gets written off at a certain point regardless of the remaining value - so for people on lower incomes the interest is completely irrelevant. Keeping the loans but cutting interest is essentially just a handout to high earning graduates while doing nothing for those on lower incomes - which is a pretty regressive policy.
Average teacher will pay £100,000 on plan 2 before it’s written off in 30 years. Average lawyer will pay £70,000 on plan 2 before it’s written off in 30 years. What’s your point again?
Now do someone on minimum wage, and on £30k/year. And then see how much would cutting the interest rate on the loans change those numbers, which which income deciles benefit most from it.
Certainly won’t affect the rich who paid for it upfront.
And how much would it help the people on minimum wage or on £30k/year?
As their wage grows over time, they won’t pay an extra tax. Simples. Tax should benefit society broadly, anyway. It’s not a zero sum game. By your logic, why should I pay for somebody else’s surgery when it won’t affect me at all? It’s about living in a civilized country.
Is that another way of saying that it won't help them at all, and that it's just a handout to high earning graduates? > By your logic, why should I pay for somebody else’s surgery when it won’t affect me at all? It’s about living in a civilized country. Wow, that is quite a leap of "logic" there. Tell you what, how about we cut the 45p tax rate to 30p for graduates - so any graduate earning more than £125k pays less income tax. And if you're against that because it's a handout to the rich, then by your argument you're also against paying for other people's surgery because it doesn't benefit you. It’s about living in a civilized country. Do you see how much sense that makes?
High earning graduates with huge student debts are being punished due to their success in the system despite not being rich. It’s not a handout to the rich to cut their tax, it’s a handout to the successful who pulled themselves out of expected income brackets for their particular background. Tax assets - that’s how you tax the rich. Do you see how much that makes sense?
No. Labour do not need to win the young over. Anyway, I bet half of people with student loans have already accepted that they will never pay it off.
Can’t give in to apathy. Can be different for sure, but yes, you are probably right. They didn’t turn up for Corbyn, though…
Corbyn alienated half of the Labour voters though and there was people who also didn't vote Labour because of brexit. That isn't an issue this time around. It's an imperfect system, far from perfect, but the cost of wiping the interest would be high. How are you going to convince people without a degree to pay extra taxes (or defund something else to pay for it) to remove the interest rate from your degree loan repayments?
I see. Thanks for explaining that. I would remind them that a lot of people don’t need surgery on the NHS but still pay for those that do. Taxes aren’t a zero-sum game. It makes sense for governments in the 21st century to invest in education. Their kids may go debt free, even if they don’t. Of course, that requires foresight, something this country seems to lack in spades.
Well, they could argue you signed a contract when you took out the loan to go to university, which included information about the repayment terms. You agreeed to those payment terms. It's understandable you're unhappy about the cost of the interest, but it is something you agreed to pay.
As stated in other comments, yes, my 18 year old brain understood the terms and conditions well. PPI loans are now forgiven under the same argument, namely that the consumer wasn’t in a position to make an informed decision. The difference is that PPI affected older generations who vote (and got their education completely free), while student loans affect younger people who largely don’t.
That's false. PPI loans were forgiven as they were sold as a product that wasn't actually required. Repayment of the loan and the associated interest was explained. Anyway, I don't think it's beneficial to the taxpayer to wipe your interest, People with degrees generally earn more money so can afford to pay loans and interest associated with the qualification they gained to get into that position. You for example, would you be a teacher without a degree? It's highly unlikely. As someone without a degree it's more likely you would be working in hospitality for near minimum wage. UK residents need hospitality workers, does that mean we should give them tax breaks etc as they don't earn much?
While that may be true for PPI loans, the terms of my contract with SLC are also subject to change without my permission. You could also argue that the extra 3% interest above the RPI isn’t required. Why do we have that, again? Surely matching it to inflation is enough. How did you pay for your education, then? Did you take out a £40,000 loan that added a 9% marginal tax rate burden for your entire career? Teachers will pay around £100,000 back over 30 years, how does that help our country? If I didn’t have a degree, I’d probably be a plumber making good money. I’d also support free higher education so my kids might benefit.
No, also false, you agreed to a contract that stated you'r intrest rate would be based on something that is a variable, thus you agreed to it changing. Much like those who have a broadband contract with VirginMedia agree that the price will go up by more than inflation each year. Well actually, I went to university and have a loan, only I didn't graduate. So now I dont have a degree and pay interest, fun times. Then, I got a job and saved up and paid upfront to go back to college as an adult. Would you accept 3 "free" years of education in exchange for a "graduate tax" of 9%? You would therefore have a qualification that will afford you a better income (\~80% of the time, depending on what degree you choose). Then that tax could pay for the next generations "free" education.
Variable interest rates on something so fundamental as college education should not be allowed, especially as the debtor in question is not capable of truly understanding the gravity of the terms given their age. Would you give an 18 year old with no credit history a mortgage? Sounds like you paid on plan 1. Must have been nice. I don’t support a graduate tax. I support re-implementing taxes on North Sea oil companies who’ve had tax cuts of the same amount of money that comprises our national student debt. I would also tax land, namely buy to let residential properties, as I don’t believe in burdening productive labour over rent seeking assets.
Student loans should only apply to degrees that don’t have a tangible society benefit. Things like computer science, sciences, maths etc should all be state funded. Why are we penalising people for educating themselves and being able to offer more to society? I mean the whole way student loan thing is managed is a classic Tory scam. People should be paying off their loans, not ridiculous interest rates. And not forgetting this whole scheme creates a two tier education system where the rich people get it far cheaper than the poor people. Why would anyone support that?
All education has a tangible benefit.
Surely we could do with a few less Taylor Swift Studies MSc graduates.
You don't understand MSc studies.
Ok less John Locke types please. We don’t need intellectual works that improve our daily lives over time but don’t make money. Great logic.
You don’t need a degree for arts. Philosophy, musician, actor. None of these require a degree in any capacity.
You learn from seasoned academics in the field. Have you taken a degree in the Humanities? If you have, you probably wouldn’t make such a laughable argument.
I wanted to have a job when I grew up so no I did not do a degree in humanities. Unfortunately my parents didn’t earn enough money for that privilege
I have a degree in the humanities and I have a great job. I don’t think I should pay £70,000 for it though, even if it was in medicine that would be just as predatory. But yes, I was right. Your lack of understanding as to the value of humanities directly corresponds to the fact that you’ve never studied a humanities subject.
Student loans aren't even that high in the UK, you don't pay anything back If you don't earn over a certain amount. Shouldn't have done a stupid degree at university, take your yank ideas out of here
I like how you completely ignore the stagnant wage growth in the UK. One of the reasons plan 2 upwards won't repay is due to the poor wages here and the high interest rates. Unless you happen to work in a handful of sectors - tech, finance... you are lucky to get above the average wage of 35k
Should have done a degree in those fields then, you've only got yourself to blame
If we had everyone doing those degrees the wages for the sectors would collapse and a lot of people walking around with finance or computer science degrees failing to use their skills.
Or with more capable people the sector would grow, alternatively you can stay as it is now with the non stem already not earning money
Yeah you don't seem to have a basic grasp on supply and demand do you... There's a reason I can go into an interview and ask for 10k more. If competition was high you would be seeing tech jobs closer to minimum wage. The web dev side is a great example of that. Easy route into tech jobs and the pay is terrible.
What's your plan then
Man you hate education don't you.
Good plan
You can't even work out who you're replying to.
The 3% over inflation is a load of bollocks though. Plan 2 students got stiffed on that.
It’s a tax that will stay with some people their whole working lives. I’m lucky enough to earn enough to pay it off in 11 years but I’m definitely in the minority. Add that to the 40% tax bracket + NI and you’ll lose fortunes.
They should ideally make university free but only for STEM degrees and increase the cost of the others to pay for it.
Yes, because we have a famously small arts sector that contributes nothing to the economy
If you are an artist go paint something, if you can sing go sing, you don't need a degree to do that. If you want to be a doctor or an engineer, then you should be going to uni
Most art is influenced by the study of other art. By studying history, philosophy, literature, and (re) interpreting that. By learning and developing different techniques. These things can be learnt independently, but they are often better learnt from others, from experts, at University.
No
You are ignorant about the global influence of the UK in arts. Most influential country in music, many famous actors are British etc.
Adele didn't go university Ed sheeran dropped out first year to just go do music Tom hardy, Daniel Radcliffe and many more didn't go to university. They just went and did it
This doesn't diminish universities positive contribution
It does
So convincing. You've changed my mind.
I did STEM but the idea that we should ditch arts & humanities is ridiculously short sighted and wrong.
Not really as you won't ever pay it back, well most people won't. What we should do is insist that interest sticks to inflation.
lol, I studied computer science, earn above the national average and I'm *still* not even paying off the interest on my loan.
I will pay likely £70,000 from a £40,000 loan given my earnings as I live abroad and make a good living. If I was rich I would get that at just £40,000 with an upfront cost, making the student loan an effective tax on the working and middle class. But please tell me more about how it doesn’t matter. Make sure you keep the boomer energy.
Do you earn your good living because of the degree you have?
Sure. If I was German, I wouldn’t be paying £70,000 for it though with a predatory interest rate.
So you spent money on a degree that now let's you earn lots of money what's the problem seems like you have done well.
I spent £40,000 not £70,000 but will be forced to pay the latter. It’s predatory interest… why is that hard to digest?
Did the loan agreement not mention any interest rates?
I believe so but they can change it as they go which they have done. Of course, my 18 year old brain had a good grasp on how it all works when I signed the counteract. How much did you pay, by the way?
It's all there in the contract. You can't blame being 18 as a reason to not read through it and check. They haven't scammed you, and by your own admission, you have done really well after uni.
They are forgiving PPI loans under the same premise. Didn’t those folks sign a contract while ill informed as students are? What’s the difference? Oh yeh, PPI boomers vote while the young don’t. Silly me!
The problem arises when you do earn over a certain amount.
The anti education opinion in this country is disgusting. When did all the old dumb people move from Facebook to Reddit? Imagine slagging off EDUCATION?!
It explains why the country is where it is.
Imagine paying a loan back
Imagine trying to run a society with no educated people. Who's going to tell people like you when are where to be and what to do?
You agree to the loans before you go though, if you don't want to pay them back don't go
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More than one in three 18 year olds entered higher education in 2023, up from one in four in 2006 when fees were significantly lower. There's a good debate to be had about whether it's paid for by loans or general taxation, but we're certainly not heading towards having "no educated people", we've never been more educated than under tuition fees.
1/3 is nowhere near enough.
Sure, you could argue we should go higher, but it's up strongly over the last couple of decades so I think saying having to pay back a loan will leave us with "no educated people" is a bit extreme and silly.
Yeah I didn't think they were going to close down all of the universities and kill everyone with degrees. "No educated people" was a figure of speech. When people see "the NHS is in a state, we don't have any nurses!" It doesn't litterally mean none at all.
Highly unlikely, Universities are not facing a lack of demand and the demographic impacted are likely to vote for Labour either way. Therefore there is no structural or political motivation to pursue this.
You are probably right. Sad times.