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The UK loans are actually a good deal if you really understand them, which students here inevitably don’t. It makes demanding government to pay for tuition here

The UK loans are actually a good deal if you really understand them, which students here inevitably don’t. It makes demanding government to pay for tuition here pretty abhorrent imho. I know a lot of working class/blue-collar families here, and talking with them, it really becomes clear how incredibly selfish and unreasonable it is to expect their taxes to buy someone wealthier than them an education that they themselves are denied by virtue of being raised in harsher circumstances.

Ntrails 6y ago
I think that the modern loans are a far less amicable deal than I had just a few years ago. Interest rates far higher despite an incredibly low rate environment. But. The repayment thresholds and the loan forgiveness period do massively reduce the onerousness, especially on those in lower paid roles who would otherwise never repay. My main complaint about the system is really how it drags on the middle. The successful graduates pay off their loans in 6-7 years, or less. If you're earning 40-50k, you'll take more like 20 years to pay off the loan which feels like a long hard slog. I still think graduate tax would have been the right call.
- IanCal 6y ago
  6-7 years on standard repayments would require a salary of around £100k straight out of uni. On £40k you'd end up with them cancelled and likely repay less than you borrowed (45k typical borrowing, £38k repaid over 30 years).
  - throwaway2245 6y ago
    1. The amount that you "borrowed" is a fake number, though, with no correspondence to the true cost of the course and is non-existant for e.g. Scottish students in Scotland. 2. Your salary will (is expected to) inflate; the repayment threshold currently does not, so the "time value of money" has something to say about how much you repay. Someone whose salary remains constant on the equivalent of £40k will find their repayments an increasing burden.
    - IanCal 6y ago
      The repayment threshold is expected to rise with average earnings so someone on an equivalent salary of £40k would be expected to pay back less in real terms than that calculation if wages rise above inflation. The amount you borrow is not a fake number, whether it is related to the course cost or not, just as the price of a car is not a fake number even if it was cheaper to produce. It also includes literal cash payments to you.
throwaway2245 6y ago
What £ of tax would the working class family contribute towards university education (assuming you accept this paradigm of tax and spend)? Back of envelope calculation suggests income tax collected from a median family would be £50 per year. Meanwhile, I know plenty of working class/blue-collar families who believe that debt is an unmanageable risk that they should reject if at all possible. Their children take that to mean that they absolutely shouldn't go to university, no matter how capable they are.
- OJFord 6y ago
  > Back of envelope calculation suggests income tax collected from a median family would be £50 per year. Back of envelope calculation is definitely wrong. I'm not necessarily disagreeing with you, I'm just saying that £50 figure is definitely not right, without doing any calculation. (OK sure - 50/0.2 = £250 taxed at basic rate above personal allowance. Which this year I think is £12k5, and median household income is surely above £12k75.)
  - throwaway2245 6y ago
    Ah apologies, I was answering my own question: I meant marginal tax required to pay for university level education in place of current student loans system.
    - headmelted 6y ago
      this, but also that: “ What £ of tax would the working class family contribute towards university education” Is not really fair to the issue. It’s not a cost for university education, because it’s not open to all - there are gatekeepers - and those from underprivileged backgrounds have very little chance of being accepted to the most prestigious institutions, so it’s unfair to expect them to pay for it, is essentially my point.
      - throwaway2245 6y ago
        My point is that people from underprivileged backgrounds realistically don't pay any different amount in tax and are only further removed from access. To repeat myself: "Their children take [accruing debt] to mean that they absolutely shouldn't go to university, no matter how capable they are." Tax pays for plenty of things that working class people don't use; it also pays for plenty of things that working class people do use, that other people are paying for - and the latter category should include university education. Tax is an agreement that we find these things valuable to pay for, as a society. Not everything paid for in taxes has a direct benefit to everybody.
denotational 6y ago
I'm entirely incapable of understanding how a UK SLC "loan" can be considered a loan in the conventional sense of the word when it seems to have literally no characteristics of a loan, and every characteristic of a tax: * You only pay it when you are in employment and earning money (with a minimum salary for repayments to be taken); * The repayments are calculated as a function of your taxable income; * The balance isn't discharged by bankruptcy; * The balance isn't considered by lenders when assessing your suitability to take on "real" debt. As far as I can tell, it's a graduate tax (on those who took a loan) for all intents and purposes. I see comments from students talking about being "crushed by debt" as a result of taking an SLC loan, and I just can't work out where this perception comes from: yes, it decreases your take-home pay, but since there's a minimum salary threshold for payments to be taken, it's never going to leave you destitute.

Ntrails 6y ago

I think that the modern loans are a far less amicable deal than I had just a few years ago. Interest rates far higher despite an incredibly low rate environment. But. The repayment thresholds and the loan forgiveness period do massively reduce the onerousness, especially on those in lower paid roles who would otherwise never repay. My main complaint about the system is really how it drags on the middle. The successful graduates pay off their loans in 6-7 years, or less. If you're earning 40-50k, you'll take more like 20 years to pay off the loan which feels like a long hard slog. I still think graduate tax would have been the right call.

IanCal 6y ago
6-7 years on standard repayments would require a salary of around £100k straight out of uni. On £40k you'd end up with them cancelled and likely repay less than you borrowed (45k typical borrowing, £38k repaid over 30 years).
- throwaway2245 6y ago
  1. The amount that you "borrowed" is a fake number, though, with no correspondence to the true cost of the course and is non-existant for e.g. Scottish students in Scotland. 2. Your salary will (is expected to) inflate; the repayment threshold currently does not, so the "time value of money" has something to say about how much you repay. Someone whose salary remains constant on the equivalent of £40k will find their repayments an increasing burden.
  - IanCal 6y ago
    The repayment threshold is expected to rise with average earnings so someone on an equivalent salary of £40k would be expected to pay back less in real terms than that calculation if wages rise above inflation. The amount you borrow is not a fake number, whether it is related to the course cost or not, just as the price of a car is not a fake number even if it was cheaper to produce. It also includes literal cash payments to you.

throwaway2245 6y ago

What £ of tax would the working class family contribute towards university education (assuming you accept this paradigm of tax and spend)? Back of envelope calculation suggests income tax collected from a median family would be £50 per year. Meanwhile, I know plenty of working class/blue-collar families who believe that debt is an unmanageable risk that they should reject if at all possible. Their children take that to mean that they absolutely shouldn't go to university, no matter how capable they are.

OJFord 6y ago
> Back of envelope calculation suggests income tax collected from a median family would be £50 per year. Back of envelope calculation is definitely wrong. I'm not necessarily disagreeing with you, I'm just saying that £50 figure is definitely not right, without doing any calculation. (OK sure - 50/0.2 = £250 taxed at basic rate above personal allowance. Which this year I think is £12k5, and median household income is surely above £12k75.)
- throwaway2245 6y ago
  Ah apologies, I was answering my own question: I meant marginal tax required to pay for university level education in place of current student loans system.
  - headmelted 6y ago
    this, but also that: “ What £ of tax would the working class family contribute towards university education” Is not really fair to the issue. It’s not a cost for university education, because it’s not open to all - there are gatekeepers - and those from underprivileged backgrounds have very little chance of being accepted to the most prestigious institutions, so it’s unfair to expect them to pay for it, is essentially my point.
    - throwaway2245 6y ago
      My point is that people from underprivileged backgrounds realistically don't pay any different amount in tax and are only further removed from access. To repeat myself: "Their children take [accruing debt] to mean that they absolutely shouldn't go to university, no matter how capable they are." Tax pays for plenty of things that working class people don't use; it also pays for plenty of things that working class people do use, that other people are paying for - and the latter category should include university education. Tax is an agreement that we find these things valuable to pay for, as a society. Not everything paid for in taxes has a direct benefit to everybody.

denotational 6y ago

I'm entirely incapable of understanding how a UK SLC "loan" can be considered a loan in the conventional sense of the word when it seems to have literally no characteristics of a loan, and every characteristic of a tax: * You only pay it when you are in employment and earning money (with a minimum salary for repayments to be taken); * The repayments are calculated as a function of your taxable income; * The balance isn't discharged by bankruptcy; * The balance isn't considered by lenders when assessing your suitability to take on "real" debt. As far as I can tell, it's a graduate tax (on those who took a loan) for all intents and purposes. I see comments from students talking about being "crushed by debt" as a result of taking an SLC loan, and I just can't work out where this perception comes from: yes, it decreases your take-home pay, but since there's a minimum salary threshold for payments to be taken, it's never going to leave you destitute.