8 ms·

That's how undergraduate University education works in Australia (at least it did when I attended. Perhaps someone younger than me can comment if things have ch

That's how undergraduate University education works in Australia (at least it did when I attended. Perhaps someone younger than me can comment if things have changed in the last 20 years). Effectively the government pays your undergraduate university fees. There is then an additional tax applied against your salary, after it reaches a certain threshold. This of course results in jokes that Arts graduates may as well be enjoying free tertiary education. I think this is a much fairer system than being asked to pay upfront and perhaps taking out a student loan in order to pay fees. The Australian system allows any student with the ability and desire to attend University (it's not completely perfect, but it is much better). https://en.wikipedia.org/wiki/Tertiary_education_fees_in_Australia https://en.wikipedia.org/wiki/Tertiary_education_fees_in_Aus...

learc83 9y ago
That's effectively how it works in the US as well for most people. Federal loans (90% of all loans) come with income based repayment plans that charge 10% of your disposable income and are cancelled after 20 years if you don't pay it off.
- phillc73 9y ago
  I did not know that. So why all the noise about how expensive tertiary education is in the US?
  - Larrikin 9y ago
    Large student loans affect your credit and there is no threshold for your salary for when you have to start paying back.
    - learc83 9y ago
      >there is no threshold for your salary for when you have to start paying back. There is. You pay back 10% of your disposable income. Disposable income is income above 1.5x the Federal poverty level. If you make less than that, you pay $0.
      - mcguire 9y ago
        The federal poverty level for a single individual is a bit less than $14,000.
  - JohnTHaller 9y ago
    Cost of university education has risen much faster than inflation for decades primarily due to easily obtained loans and increasing bureaucratic overhead. At the same time, the job prospects for many degree-holders have decreased. Additionally, student loans are for life and can not be cancelled by filing bankruptcy now. The 20 year thing mentioned by the above comment only applies to very specific government jobs. So education is more expensive, student loans are more expensive, student loans can't be cancelled, and job prospects and real income are worse.
    - learc83 9y ago
      >The 20 year thing mentioned by the above comment only applies to very specific government jobs. No you are completely incorrect. For public sector jobs the loan forgiveness happens after 10 years. Under the income based repayment plan anyone who makes payments for 20 years will have the remainder cancelled. https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...
  - learc83 9y ago
    As you can see from my sibling comments, people who make too much money to qualify for income based repayment (because they'd be paying more than the standard plan), people who went to college years ago, and the generally uninformed just don't know about income based repayment plans.
  - s73ver 9y ago
    Not everyone qualifies for government loans.
    - learc83 9y ago
      Government loans are credit independent. Subsidized loans are need based (the interest that accrues while in school is subsidized by the government), but unsubsidized loans are not. The vast majority of students qualify. If you are a felon, once you are released from jail, you can still qualify. The only people who really can't qualify that I'm aware of are non residents, people who have been convicted of drug offenses that occurred while accepting federal financial aid, and people who already have degrees.
  - magic_beans 9y ago
    Not every loan is a federal loan. Additionally, federal loans almost NEVER cover the full amount of university, unless you're at a state school or community college. My federal loans covered about 1/8 of my tuition.
    - learc83 9y ago
      Federal loans make up 90% of all loan disbursements. The vast majority of college students only have Federal student loans. >unless you're at a state school or community college Private colleges enroll about 15-20% of students. If you don't want $100k in debt, go to a public school, or go to a top tier school like Harvard that has very generous financial aid. If you can't get into a top tier school with excellent financial aid (or your parents make too much money to qualify), you have to decide whether $100k in debt is worth it. It's not society's job to pay for private college.
      - magic_beans 9y ago
        I'm from CA. Even with the resident discount, UCs are just as pricy as private colleges.
        learc83 9y ago
        UC Berkeley tuition and fees comes to about $13k per year for California residents. The average private school tuition is over $30k per year. Not sure why you think that it's so expensive. I went to school in Georgia (much lower cost of living area) and UCs are only about 15% more expensive than our flagship schools (Georgia Tech and UGA, and GSU).
  - austenallred 9y ago
    Because a. not everyone qualifies for that, and b. 10% of disposable income for 20 years for something that didn't work out is still a pretty awful deal
    - learc83 9y ago
      >Because a. not everyone qualifies for that Everyone who has federal student loans (90% of all loan disbursements) qualifies for income based repayment plans if the plan will lower your payment. *PLUS loans your parents took out don't qualify, but you won't need those if you're going to a 4 year state school. >20 years for something that didn't work out is still a pretty awful deal Didn't work out meaning can't make much money. For a family of 4 making $50k (about the median household income), you'd pay back around $100 a month.
- Clubber 9y ago
  I don't believe they are cancelled ever. There is a special condition that if you work for the federal government for 20 years, they can be cancelled after 20 years if they aren't paid off, but AFAIK, that's it, and you have to attempt to pay them off during those 20 years. If there is a new exception, please let me know. My wife has some.
  - learc83 9y ago
    If you opt into the income based repayment plan they are cancelled after 20 years of payments. I'm not sure how they retroactively count payments made under old repayment plans if you switch now.
    - austenallred 9y ago
      I can't believe we're acting like taking 10% of disposable income for 20 years is a good deal
      - learc83 9y ago
        It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years. It's designed as a safety net for people who can't find a decent job after taking out student loans. If you get a high paying job you're not going to qualify for the income based repayment plan because you only qualify for the newer income based repayment plans if it will lower your monthly payments below the standard repayment plan.
        drewmol 9y ago
        >It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years. Yes, and also there's lots of non-typical deductions that can furthur reduce your effective income for these plans, and ways to reduce the forgiveness period to 10 years. Lots of lawmakers say that program is not sustainable, and Congress may try to change it soon... If your not utilizing it and have student loan debt, I'd recommend looking into it sooner than later, as you may be grandfathered in if/when it's restructured. Most people who are elegible don't take advantage of it yet, and loan servicers do their best to steer students away from signing up for IDR.

learc83 9y ago

That's effectively how it works in the US as well for most people. Federal loans (90% of all loans) come with income based repayment plans that charge 10% of your disposable income and are cancelled after 20 years if you don't pay it off.

phillc73 9y ago
I did not know that. So why all the noise about how expensive tertiary education is in the US?
- Larrikin 9y ago
  Large student loans affect your credit and there is no threshold for your salary for when you have to start paying back.
  - learc83 9y ago
    >there is no threshold for your salary for when you have to start paying back. There is. You pay back 10% of your disposable income. Disposable income is income above 1.5x the Federal poverty level. If you make less than that, you pay $0.
    - mcguire 9y ago
      The federal poverty level for a single individual is a bit less than $14,000.
- JohnTHaller 9y ago
  Cost of university education has risen much faster than inflation for decades primarily due to easily obtained loans and increasing bureaucratic overhead. At the same time, the job prospects for many degree-holders have decreased. Additionally, student loans are for life and can not be cancelled by filing bankruptcy now. The 20 year thing mentioned by the above comment only applies to very specific government jobs. So education is more expensive, student loans are more expensive, student loans can't be cancelled, and job prospects and real income are worse.
  - learc83 9y ago
    >The 20 year thing mentioned by the above comment only applies to very specific government jobs. No you are completely incorrect. For public sector jobs the loan forgiveness happens after 10 years. Under the income based repayment plan anyone who makes payments for 20 years will have the remainder cancelled. https://studentaid.ed.gov/sa/repay-loans/understand/plans/income-driven https://studentaid.ed.gov/sa/repay-loans/understand/plans/in...
- learc83 9y ago
  As you can see from my sibling comments, people who make too much money to qualify for income based repayment (because they'd be paying more than the standard plan), people who went to college years ago, and the generally uninformed just don't know about income based repayment plans.
- s73ver 9y ago
  Not everyone qualifies for government loans.
  - learc83 9y ago
    Government loans are credit independent. Subsidized loans are need based (the interest that accrues while in school is subsidized by the government), but unsubsidized loans are not. The vast majority of students qualify. If you are a felon, once you are released from jail, you can still qualify. The only people who really can't qualify that I'm aware of are non residents, people who have been convicted of drug offenses that occurred while accepting federal financial aid, and people who already have degrees.
- magic_beans 9y ago
  Not every loan is a federal loan. Additionally, federal loans almost NEVER cover the full amount of university, unless you're at a state school or community college. My federal loans covered about 1/8 of my tuition.
  - learc83 9y ago
    Federal loans make up 90% of all loan disbursements. The vast majority of college students only have Federal student loans. >unless you're at a state school or community college Private colleges enroll about 15-20% of students. If you don't want $100k in debt, go to a public school, or go to a top tier school like Harvard that has very generous financial aid. If you can't get into a top tier school with excellent financial aid (or your parents make too much money to qualify), you have to decide whether $100k in debt is worth it. It's not society's job to pay for private college.
    - magic_beans 9y ago
      I'm from CA. Even with the resident discount, UCs are just as pricy as private colleges.
      - learc83 9y ago
        UC Berkeley tuition and fees comes to about $13k per year for California residents. The average private school tuition is over $30k per year. Not sure why you think that it's so expensive. I went to school in Georgia (much lower cost of living area) and UCs are only about 15% more expensive than our flagship schools (Georgia Tech and UGA, and GSU).
- austenallred 9y ago
  Because a. not everyone qualifies for that, and b. 10% of disposable income for 20 years for something that didn't work out is still a pretty awful deal
  - learc83 9y ago
    >Because a. not everyone qualifies for that Everyone who has federal student loans (90% of all loan disbursements) qualifies for income based repayment plans if the plan will lower your payment. *PLUS loans your parents took out don't qualify, but you won't need those if you're going to a 4 year state school. >20 years for something that didn't work out is still a pretty awful deal Didn't work out meaning can't make much money. For a family of 4 making $50k (about the median household income), you'd pay back around $100 a month.
Clubber 9y ago
I don't believe they are cancelled ever. There is a special condition that if you work for the federal government for 20 years, they can be cancelled after 20 years if they aren't paid off, but AFAIK, that's it, and you have to attempt to pay them off during those 20 years. If there is a new exception, please let me know. My wife has some.
- learc83 9y ago
  If you opt into the income based repayment plan they are cancelled after 20 years of payments. I'm not sure how they retroactively count payments made under old repayment plans if you switch now.
  - austenallred 9y ago
    I can't believe we're acting like taking 10% of disposable income for 20 years is a good deal
    - learc83 9y ago
      It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years. It's designed as a safety net for people who can't find a decent job after taking out student loans. If you get a high paying job you're not going to qualify for the income based repayment plan because you only qualify for the newer income based repayment plans if it will lower your monthly payments below the standard repayment plan.
      - drewmol 9y ago
        >It's not 10% of your disposable income for 20 years. It's capped at 10% of your disposable income for 20 years. Yes, and also there's lots of non-typical deductions that can furthur reduce your effective income for these plans, and ways to reduce the forgiveness period to 10 years. Lots of lawmakers say that program is not sustainable, and Congress may try to change it soon... If your not utilizing it and have student loan debt, I'd recommend looking into it sooner than later, as you may be grandfathered in if/when it's restructured. Most people who are elegible don't take advantage of it yet, and loan servicers do their best to steer students away from signing up for IDR.