£8.6bn in interest alone for UK students

[Eldorado]

"Students will owe a staggering £8.6bn in interest alone on their loans within five years, government figures show – almost double the current debt.

"The burden is set to mushroom amid growing criticism of the government for failing to act on sky-high interest rates – currently 6.3 per cent – charged on the money borrowed for studies."

Full report at the UK Independent: https://www.independent.co.uk/news/uk/politics/student-loan-debt-interest-rates-government-a9054806.html

 

"Interest accrued on undergraduate student loans is set to double to £8.6 billion a year by 2024."

At the paywalled UK Times: https://www.thetimes.co.uk/article/student-loan-interest-to-hit-8-6bn-a-year-bz2vq8xk7

[+Desertrat56]

We have a similar problem in the U.S. but it is worse because of the lack of oversite on the companies that are hired to manage the loans.

[spartan max2]

I'm confused, I was always led to believe the U.K had free college?

Can someone elaborate 

 

@Setton , I believe we discussed it some before . 

Edited August 13, 2019 by spartan max2

[Eldorado]

5 minutes ago, spartan max2 said:

I'm confused, I was always led to believe the U.K had free college?

Can someone elaborate 

 

@Setton , I believe we discussed it some before . 

https://en.wikipedia.org/wiki/Tuition_fees_in_the_United_Kingdom

[Setton]

36 minutes ago, spartan max2 said:

I'm confused, I was always led to believe the U.K had free college?

Can someone elaborate 

 

@Setton , I believe we discussed it some before . 

Not free but we can get a loan from government to cover the tuition fees and an additional one to cover maintenance costs. 

They're paid back as a proportion of income over a specific threshold (23k ish I think) and written off after 25 years. So it doesn't affect you in the way other debts would or the US system. 

The issue is that, after students took out the loans, agreed at ~2% interest, the government sold them on to a private company that then hiked them up to 6%+. 

Joke's on them for me - 55k in debt and rising faster than I pay it. Not a chance of then getting their money back before it's written off 

[+Desertrat56]

1 minute ago, Setton said:

Not free but we can get a loan from government to cover the tuition fees and an additional one to cover maintenance costs. 

They're paid back as a proportion of income over a specific threshold (23k ish I think) and written off after 25 years. So it doesn't affect you in the way other debts would or the US system. 

The issue is that, after students took out the loans, agreed at ~2% interest, the government sold them on to a private company that then hiked them up to 6%+. 

Joke's on them for me - 55k in debt and rising faster than I pay it. Not a chance of then getting their money back before it's written off 

Yeah, currently only people in the U.S with federal student loans can get it written off after 10 year AND 120 payments AND they spent those 10 years in a government or non-profit job.  BUT since our "beloved" Betsy was appointed  to what ever bureaucratic position she has none of those applications have been processed and the rules that were put in place when hiring companies to manage the loans have not been enforced so those companies are getting away with making people destitute illegally based on student loans.  People have even been arrested for 1500.00 because of a student loan.

[ExpandMyMind]

1 hour ago, Setton said:

Not free but we can get a loan from government to cover the tuition fees and an additional one to cover maintenance costs. 

They're paid back as a proportion of income over a specific threshold (23k ish I think) and written off after 25 years. So it doesn't affect you in the way other debts would or the US system. 

The issue is that, after students took out the loans, agreed at ~2% interest, the government sold them on to a private company that then hiked them up to 6%+. 

Joke's on them for me - 55k in debt and rising faster than I pay it. Not a chance of then getting their money back before it's written off 

I'd just add that tuition is still free in Scotland, with our courses paid for by government grants instead of loans.

[spartan max2]

7 minutes ago, ExpandMyMind said:

I'd just add that tuition is still free in Scotland, with our courses paid for by government grants instead of loans.

Free to what extent?

Can you get a PHD for free or does it stop after bachelor or is it a case by case basis?

Or is there a ceiling on how much is paid?

 

[ExpandMyMind]

4 minutes ago, spartan max2 said:

Free to what extent?

Can you get a PHD for free or does it stop after bachelor or is it a case by case basis?

Or is there a ceiling on how much is paid?

 

I think you're funded for a PhD as much as 5k p/y for the course and 15k p/y for living expenses, and around 5.5k total for a Masters. The two have different funding sources though and the PhD funding is merit-based, with more applicants than acceptances per year.

Masters and undergraduate funding: https://www.saas.gov.uk/full_time/pg/funding_available.htm

PhD funding (available to all UK students): https://www.findaphd.com/funding/guides/research-council-studentships.aspx

[spartan max2]

26 minutes ago, ExpandMyMind said:

I think you're funded for a PhD as much as 5k p/y for the course and 15k p/y for living expenses, and around 5.5k total for a Masters. The two have different funding sources though and the PhD funding is merit-based, with more applicants than acceptances per year.

Masters and undergraduate funding: https://www.saas.gov.uk/full_time/pg/funding_available.htm

PhD funding (available to all UK students): https://www.findaphd.com/funding/guides/research-council-studentships.aspx

How does Scotland fund the free college?

[ExpandMyMind]

I assume it's some sort of government fund, like any money allocated to public services such as police, fire brigade, NHS, etc. You might find more information on the SAAS website above.

It was the same in England until not too long ago. I'm actually surprised there wasn't more opposition to them doing away with free university education.

Edited August 13, 2019 by ExpandMyMind

[Sir Wearer of Hats]

Why not do what they do in Oz, once you earn over a certain threshold you need to repay some of that loan off at tax time, they simply garnish your tax return.

[hetrodoxly]

12 minutes ago, Sir Wearer of Hats said:

Why not do what they do in Oz, once you earn over a certain threshold you need to repay some of that loan off at tax time, they simply garnish your tax return.

That is what happens here really.

[Duke Wellington]

5 hours ago, Eldorado said:

"Students will owe a staggering £8.6bn in interest alone on their loans within five years, government figures show – almost double the current debt.

"The burden is set to mushroom amid growing criticism of the government for failing to act on sky-high interest rates – currently 6.3 per cent – charged on the money borrowed for studies."

Full report at the UK Independent: https://www.independent.co.uk/news/uk/politics/student-loan-debt-interest-rates-government-a9054806.html

"Interest accrued on undergraduate student loans is set to double to £8.6 billion a year by 2024."

At the paywalled UK Times: https://www.thetimes.co.uk/article/student-loan-interest-to-hit-8-6bn-a-year-bz2vq8xk7

With myself the bank of mother and father paid for my first degree, and the second I paid for myself outright. But I noticed that about half of the students on my course were saddled up with large amounts of debt by the time they got to their final year.

Lets suppose a student is doing a BA then if they drop out or get a 3rd I think they should be made to pay their loans back in full because they clearly weren't interested. If they complete their degree with a 2.2, 2.1, or 1st, they should have their student load wiped clean.

Of course, that should depend on the subject too. With easy degrees like IT that bar should be set higher (maybe 1sts only), but with hard subjects like physics 2.2s are fine.

We really dont want our newly qualified graduates from working class backgrounds on basic salaries for 10 years because everything extra they earn goes towards paying their loans back. They are part of our future, they are intellectuals which will be leading our economy tomorrow. We need to be looking after them better by getting them straight onto middle incomes.

[aztek]

so education is really NOT free in UK, wow who knew, lol

[Setton]

9 hours ago, RabidMongoose said:

 

We really dont want our newly qualified graduates from working class backgrounds on basic salaries for 10 years because everything extra they earn goes towards paying their loans back. They are part of our future, they are intellectuals which will be leading our economy tomorrow. We need to be looking after them better by getting them straight onto middle incomes.

That's not how it works though. It's only a proportion (11% I think) over the threshold. 

For example, I'm on about 2k a month after tax and only pay 150 towards my student loans. And that's for an undergrad, PGCE and masters. My partner is on 1.6k and doesn't pay anything. 

[hetrodoxly]

9 hours ago, aztek said:

so education is really NOT free in UK, wow who knew, lol

It is if you can't afford it.

[spartan max2]

4 hours ago, Setton said:

That's not how it works though. It's only a proportion (11% I think) over the threshold. 

For example, I'm on about 2k a month after tax and only pay 150 towards my student loans. And that's for an undergrad, PGCE and masters. My partner is on 1.6k and doesn't pay anything. 

How much do you make before taxes? 

[Setton]

2 minutes ago, spartan max2 said:

How much do you make before taxes? 

About 2.5k.