Should you pay the fees up front each year, if you can afford it to prevent interest of the loan or take the loan and hope that Labour get in and do away with the fees?
It's an interesting one as next september i'll have that dilemma. I wouldn't be surprised to see something in the budget about not charging interest initially.
Get a loan. You will never pay off the 30k + in the 25 years you have to pay it off
I don't share that view. There will of course be some who don't pay it off, maybe even a majority but many many will. Take a 45 year old city worker on 100k (100k salaries aren't that rare in the city) they'd have paid it off years ago.
Get a loan. You will never pay off the 30k + in the 25 years you have to pay it off
Alternatively if your child does well at uni and gets a good job with decent career progression they could pay back as much as 7 or 8 times what they borrowed originally. Especially if the rumours are correct and the 30 year cut off will be increased to 50 years at budget.
If you're in a position to pay it off do it. Then you avoid what is effectively a tax on your child for the bulk of their working life.
Unless you expect them to do nothing with their degree and to work a low paying job all their life.
Should you pay the fees up front each year, if you can afford it to prevent interest of the loan or take the loan and hope that Labour get in and do away with the fees?
It's an interesting one as next september i'll have that dilemma. I wouldn't be surprised to see something in the budget about not charging interest initially.
Get a loan. You will never pay off the 30k + in the 25 years you have to pay it off
I don't share that view. There will of course be some who don't pay it off, maybe even a majority but many many will. Take a 45 year old city worker on 100k (100k salaries aren't that rare in the city) they'd have paid it off years ago.
Exactly. Infact they'd have paid it off multiple times over and will continue doing so for up to 50 years (rumoured to be announced at budget). So will be subsidising others.
Get a loan. You will never pay off the 30k + in the 25 years you have to pay it off
Alternatively if your child does well at uni and gets a good job with decent career progression they could pay back as much as 7 or 8 times what they borrowed originally. Especially if the rumours are correct and the 30 year cut off will be increased to 50 years at budget.
No. I'm pretty sure you stop once you've paid it off.
Our financial advisor was very clear. Pay it up front if you're a billionaire, but otherwise don't bother. If you think you can spare that sort of money, invest it in a fund.
The point is the interest is loaded so as to make it a 'hybrid tax' (official term). So under current interest rates you have to be earning 55k to even cover the monthly interest. So all the time your studying plus for the first few (10) years of work the total sum is just growing. With compound interest the amount owed could easily be triple that which you initially owed.
So at the end of the 30 (soon to be 50) years you could still 'owe' something but have actually paid off considerably more than you borrowed. Money saving expert ran some scenarios and one of them ended up paying 7 times what they initially borrowed.
If you can find a fund that guarantees you more than 6.1% interest (which is what you'll be paying on the 'loan') then I guess that might makes sense.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
you'd need to raise about another 10% of the current income tax receipts to cover just the student loans for the fee's, somewhere around 15% to cover the maintenance element as well I would guess. Depending at what point you start the 'very rich' you could be looking at a very high top rate (maybe as high as 60/70%).
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
Based on my wife's and my joint income, my daughter gets about £4600 in maintenance loan. This only just covers her rent in the halls of residence at Portsmouth. We will be funding her for her food, insurances, any travel, books etc etc. Her social life is her own concern and she will have to work part-time for that. Luckily, she works 12 hours a week for the Co-Op in Dartford and she has secured a transfer to the one next door to where she will be living.
As Cabbles said, everyone gets hammered. It's not cheap when you get there as despite getting £9250 in fees for the academic year, they still charge for things like printing and photocopying. The tenancy agreement for the halls of residence forbids her to wash or dry clothes in her room, forcing her to use the on-site laundry which is £4 for one wash and £2 for one drying cycle (up to three cycles is recommended to fully dry her clothes)
As for the question asked, register your nephew at the address where the parent earns the least. That way the loan will be higher. But why they means test it is anyone's guess. Before this year it was a grant and needed to be means tested. Now, it's a loan and needs to be paid back anyway.
My stepdaughter is going to Portsmouth in September too. What is she studying?
Sorry @Curb_It , I've only just seen your question.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
you'd need to raise about another 10% of the current income tax receipts to cover just the student loans for the fee's, somewhere around 15% to cover the maintenance element as well I would guess. Depending at what point you start the 'very rich' you could be looking at a very high top rate (maybe as high as 60/70%).
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
It depends how you set your bands, but a top rate of 95% for the top 1% should be the aim.
Freezing the loan would be a good start and then maybe coding in the loan?
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
I disagree, I think there should be fees. However 9k is way too much, it should be nearer the 3k mark as it was a few years ago.
A major problem of the Blair era (amongst others) was getting way too many young kids into Uni to do do courses that are not academic. There needs to be more vocational courses at colleges to fit the diverse working environment.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
you'd need to raise about another 10% of the current income tax receipts to cover just the student loans for the fee's, somewhere around 15% to cover the maintenance element as well I would guess. Depending at what point you start the 'very rich' you could be looking at a very high top rate (maybe as high as 60/70%).
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
It depends how you set your bands, but a top rate of 95% for the top 1% should be the aim.
Freezing the loan would be a good start and then maybe coding in the loan?
I don't think interest should be charged whilst you study and then any interest rate should simply be base rate (which may change today!), the current 6% plus is simply ridiculous.
I'm a little on the fence as to if we should have fee's or not but I certainly feel £9.25k is too much, I'd probably first of all sort out the maintenance element. As I started this topic, my nephew wouldn't have been able to go as his father earned too much to allow him more than the basic element of maintenance and as his father has no legal obligation to support him through uni (and being a complete dick) he simply wouldn't have gone had I not stepped in.
Agreed on setting bands, although my view is no band should exceed 50% tax i.e. you work more for the government/country than you do yourself. 95% is a crazy level, especially as you refer to the top 1% as that's about 165k and above per annum.
On your basis someone earning £165k would take home approximately £98k, someone on £1,165,000 so £1m more would take home £30k more (95% income tax 2% NI) i.e. £128k.
You're starting that as a fact, but I can only see it as a suggestion, as part of a scenario where interest is no longer charged.
I said multiple times rumoured. It's very strongly rumoured that it will happen. Let's wait and see.
The point still stands under the 30 year system. The money saving expert scenarios were under the 30 year systems. It is still possible (likely if you earn even close to reasonably well in that time) that you will pay back multiple times what you initially borrowed.
Take me for an example. My fees were 9k a year. I worked hard throughout sixthform, and my time at uni, including working full time in my summer's so that I did not need to borrow any more than I had to. So I borrowed 27k for fees and 3k in maintenance over the course. The rest I self funded with not a penny from my parents or anyone else.
So 30k debt. 20k less than the average will be for those starting uni this year.
Except it wasn't 30k. By the time I'd graduated the interest had pushed it to 35k. I got onto a good graduate job earning well in London. Right at the top end for someone doing what I do at this level. It'll still take me 10 years to get the the point where I am earning enough to actually cover the interest monthly let alone actually reducing the balance. By which point I could owe them nearly 80k depending on RPI.
Does anyone think that is good, fair or logical?
I'm okay with it as I've accepted that it's a graduate tax not a loan and thatvill never pay it off barring a huge intlheritance from a long lost relative.
My issue is with the government pretending it's a loan when it's not. It's a tax call it that. I also take issue with them letting people who have rich parents pay the 'fees' upfront and so avoid the tax.
I also have issue with the government using CPI (the lower measure of inflation) for anything they pay out. And RPI (higher) for anything they take in. That's blatant profiteering in the same way that commercial banks do it.
Ive just done some spreadsheet analysis (slow day at work) and 20 years after graduating with good salary growth (better than I'm expecting) I will have paid back nearly 20k but still 'owe' over 105k.
Try not to worry about it! You'll never have to pay it off. As you say it's all just gobble de gook for a tax. Even if they put the interest rate up to 4 million % it doesn't matter!
If you had a 'real' loan like a mortgage you would be shackled by this - worried about losing your job, falling ill or even getting married and having children.
Just relax and accept that you live in a nice country run by fuckwits!
Ive just done some spreadsheet analysis (slow day at work) and 20 years after graduating with good salary growth (better than I'm expecting) I will have paid back nearly 20k but still 'owe' over 105k.
That's depressing.
But you got in under the 30 year system and it won't change to 50 for those already in it. You're right - it's a tax, so don't worry about how much you owe. I agree though - it's shit.
Try not to worry about it! You'll never have to pay it off. As you say it's all just gobble de gook for a tax. Even if they put the interest rate up to 4 million % it doesn't matter!
If you had a 'real' loan like a mortgage you would be shackled by this - worried about losing your job, falling ill or even getting married and having children.
Just relax and accept that you live in a nice country run by fuckwits!
That's not true though is it... I will pay it off, plus interest at an extortionate rate. University should be expensive to deter fuckwits going purely for a state sponsored pissup... But the interest should be negligable
Try not to worry about it! You'll never have to pay it off. As you say it's all just gobble de gook for a tax. Even if they put the interest rate up to 4 million % it doesn't matter!
If you had a 'real' loan like a mortgage you would be shackled by this - worried about losing your job, falling ill or even getting married and having children.
Just relax and accept that you live in a nice country run by fuckwits!
You an extent I agree. What annoys me is the pretence that it's not a tax. Just be upfront call it a graduate tax. Add it on to income tax for simplicity and do away with the fees. Also don't allow those with rich parents to pay out upfront and so avoid the tax.
Ive just done some spreadsheet analysis (slow day at work) and 20 years after graduating with good salary growth (better than I'm expecting) I will have paid back nearly 20k but still 'owe' over 105k.
That's depressing.
But you got in under the 30 year system and it won't change to 50 for those already in it. You're right - it's a tax, so don't worry about how much you owe. I agree though - it's shit.
Erm won't it? The regs allow retrospective change of anything. This was what a lot of the original protests were about. If there was another economic crisis right now then the govt woukd get desperate and could easily retrospectively double repayment rates or something else.
no way any government will scrap the loans. not gonna happen.
personally, i borrowed the max to go to a Russell Group. in hindsight, it has been well worth it both socially and economically.
My major bugbear is the incompetence of the repayment process. Namely, the ABSOLUTE theft of the whole of the whole process is the relationship between SLC and HMRC.
one year, i was recorded as repaying £330 for the year, even though that was my monthly payment. When I called SLC they said it would take 18 months to fix due to their relationship with HMRC and that during this period I would be paying interest on the incorrect balance. although the balance has been corrected, i am still robbed of the interest on the error. its not big potatoes and certainly not worth the time, effort and expense to fix it.
So, in interests of equity, if I am a day late paying HMRC, I am liable for a £100 penalty
You're starting that as a fact, but I can only see it as a suggestion, as part of a scenario where interest is no longer charged.
I said multiple times rumoured. It's very strongly rumoured that it will happen. Let's wait and see.
The point still stands under the 30 year system. The money saving expert scenarios were under the 30 year systems. It is still possible (likely if you earn even close to reasonably well in that time) that you will pay back multiple times what you initially borrowed.
Take me for an example. My fees were 9k a year. I worked hard throughout sixthform, and my time at uni, including working full time in my summer's so that I did not need to borrow any more than I had to. So I borrowed 27k for fees and 3k in maintenance over the course. The rest I self funded with not a penny from my parents or anyone else.
So 30k debt. 20k less than the average will be for those starting uni this year.
Except it wasn't 30k. By the time I'd graduated the interest had pushed it to 35k. I got onto a good graduate job earning well in London. Right at the top end for someone doing what I do at this level. It'll still take me 10 years to get the the point where I am earning enough to actually cover the interest monthly let alone actually reducing the balance. By which point I could owe them nearly 80k depending on RPI.
Does anyone think that is good, fair or logical?
I'm okay with it as I've accepted that it's a graduate tax not a loan and thatvill never pay it off barring a huge intlheritance from a long lost relative.
My issue is with the government pretending it's a loan when it's not. It's a tax call it that. I also take issue with them letting people who have rich parents pay the 'fees' upfront and so avoid the tax.
I also have issue with the government using CPI (the lower measure of inflation) for anything they pay out. And RPI (higher) for anything they take in. That's blatant profiteering in the same way that commercial banks do it.
Here here and for what it is worth, jolly well done for doing it yourself.
will be harder in the short term, but you can look back at your achievement in making your own success for the rest of your life.
You're starting that as a fact, but I can only see it as a suggestion, as part of a scenario where interest is no longer charged.
I said multiple times rumoured. It's very strongly rumoured that it will happen. Let's wait and see.
The point still stands under the 30 year system. The money saving expert scenarios were under the 30 year systems. It is still possible (likely if you earn even close to reasonably well in that time) that you will pay back multiple times what you initially borrowed.
Take me for an example. My fees were 9k a year. I worked hard throughout sixthform, and my time at uni, including working full time in my summer's so that I did not need to borrow any more than I had to. So I borrowed 27k for fees and 3k in maintenance over the course. The rest I self funded with not a penny from my parents or anyone else.
So 30k debt. 20k less than the average will be for those starting uni this year.
Except it wasn't 30k. By the time I'd graduated the interest had pushed it to 35k. I got onto a good graduate job earning well in London. Right at the top end for someone doing what I do at this level. It'll still take me 10 years to get the the point where I am earning enough to actually cover the interest monthly let alone actually reducing the balance. By which point I could owe them nearly 80k depending on RPI.
Does anyone think that is good, fair or logical?
I'm okay with it as I've accepted that it's a graduate tax not a loan and thatvill never pay it off barring a huge intlheritance from a long lost relative.
My issue is with the government pretending it's a loan when it's not. It's a tax call it that. I also take issue with them letting people who have rich parents pay the 'fees' upfront and so avoid the tax.
I also have issue with the government using CPI (the lower measure of inflation) for anything they pay out. And RPI (higher) for anything they take in. That's blatant profiteering in the same way that commercial banks do it.
Here here and for what it is worth, jolly well done for doing it yourself.
will be harder in the short term, but you can look back at your achievement in making your own success for the rest of your life.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
you'd need to raise about another 10% of the current income tax receipts to cover just the student loans for the fee's, somewhere around 15% to cover the maintenance element as well I would guess. Depending at what point you start the 'very rich' you could be looking at a very high top rate (maybe as high as 60/70%).
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
It depends how you set your bands, but a top rate of 95% for the top 1% should be the aim.
Freezing the loan would be a good start and then maybe coding in the loan?
I don't think interest should be charged whilst you study and then any interest rate should simply be base rate (which may change today!), the current 6% plus is simply ridiculous.
I'm a little on the fence as to if we should have fee's or not but I certainly feel £9.25k is too much, I'd probably first of all sort out the maintenance element. As I started this topic, my nephew wouldn't have been able to go as his father earned too much to allow him more than the basic element of maintenance and as his father has no legal obligation to support him through uni (and being a complete dick) he simply wouldn't have gone had I not stepped in.
Agreed on setting bands, although my view is no band should exceed 50% tax i.e. you work more for the government/country than you do yourself. 95% is a crazy level, especially as you refer to the top 1% as that's about 165k and above per annum.
On your basis someone earning £165k would take home approximately £98k, someone on £1,165,000 so £1m more would take home £30k more (95% income tax 2% NI) i.e. £128k.
It would depend how many tax bands you have and the sliding rate until you got to the top rate.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
you'd need to raise about another 10% of the current income tax receipts to cover just the student loans for the fee's, somewhere around 15% to cover the maintenance element as well I would guess. Depending at what point you start the 'very rich' you could be looking at a very high top rate (maybe as high as 60/70%).
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
It depends how you set your bands, but a top rate of 95% for the top 1% should be the aim.
Freezing the loan would be a good start and then maybe coding in the loan?
I don't think interest should be charged whilst you study and then any interest rate should simply be base rate (which may change today!), the current 6% plus is simply ridiculous.
I'm a little on the fence as to if we should have fee's or not but I certainly feel £9.25k is too much, I'd probably first of all sort out the maintenance element. As I started this topic, my nephew wouldn't have been able to go as his father earned too much to allow him more than the basic element of maintenance and as his father has no legal obligation to support him through uni (and being a complete dick) he simply wouldn't have gone had I not stepped in.
Agreed on setting bands, although my view is no band should exceed 50% tax i.e. you work more for the government/country than you do yourself. 95% is a crazy level, especially as you refer to the top 1% as that's about 165k and above per annum.
On your basis someone earning £165k would take home approximately £98k, someone on £1,165,000 so £1m more would take home £30k more (95% income tax 2% NI) i.e. £128k.
It would depend how many tax bands you have and the sliding rate until you got to the top rate.
Don't think it would make a huge amount of difference, a 95% tax bracket is a massive cliff edge wherever it is (but you did mention the 1%, i.e. 165k plus) or whatever the bands are below. Taxing someone to that level will stifle business, if you run your own business and do well enough to get to the 95% bracket why bother trying to grow and taking all the additional risk and responsibility if you won't see 95/97% of it, got to be a risk v reward.
Or if you were an FD on £200k and you were offered a promotion to CEO on £400k why would you bother with all that additional work/hassle etc for £6k a year/£500 a month?
Daughter has been offered places at Queen Mary & Royal Holloway to study Comparative Literature. Still waiting to hear from others. After visiting both, it looks like it will be RHUL, she has fallen in love with the place, also not too far away, other than having to deal with M25.
Comments
If you're in a position to pay it off do it. Then you avoid what is effectively a tax on your child for the bulk of their working life.
Unless you expect them to do nothing with their degree and to work a low paying job all their life.
United Kingdom, my arse.
The point is the interest is loaded so as to make it a 'hybrid tax' (official term). So under current interest rates you have to be earning 55k to even cover the monthly interest. So all the time your studying plus for the first few (10) years of work the total sum is just growing. With compound interest the amount owed could easily be triple that which you initially owed.
So at the end of the 30 (soon to be 50) years you could still 'owe' something but have actually paid off considerably more than you borrowed. Money saving expert ran some scenarios and one of them ended up paying 7 times what they initially borrowed.
If you can find a fund that guarantees you more than 6.1% interest (which is what you'll be paying on the 'loan') then I guess that might makes sense.
The very rich have got considerably richer year on year while the standard of living has dropped for most of the population. Raise the tax rate for the rich.
I can't see how you can do something for the future without also looking at the past otherwise you could have people paying their student loans also paying more tax to allow people to attend for free now.
My daughter is studying Journalism. Yours?
Freezing the loan would be a good start and then maybe coding in the loan?
A major problem of the Blair era (amongst others) was getting way too many young kids into Uni to do do courses that are not academic. There needs to be more vocational courses at colleges to fit the diverse working environment.
I'm a little on the fence as to if we should have fee's or not but I certainly feel £9.25k is too much, I'd probably first of all sort out the maintenance element. As I started this topic, my nephew wouldn't have been able to go as his father earned too much to allow him more than the basic element of maintenance and as his father has no legal obligation to support him through uni (and being a complete dick) he simply wouldn't have gone had I not stepped in.
Agreed on setting bands, although my view is no band should exceed 50% tax i.e. you work more for the government/country than you do yourself. 95% is a crazy level, especially as you refer to the top 1% as that's about 165k and above per annum.
On your basis someone earning £165k would take home approximately £98k, someone on £1,165,000 so £1m more would take home £30k more (95% income tax 2% NI) i.e. £128k.
The point still stands under the 30 year system. The money saving expert scenarios were under the 30 year systems. It is still possible (likely if you earn even close to reasonably well in that time) that you will pay back multiple times what you initially borrowed.
Take me for an example. My fees were 9k a year. I worked hard throughout sixthform, and my time at uni, including working full time in my summer's so that I did not need to borrow any more than I had to. So I borrowed 27k for fees and 3k in maintenance over the course. The rest I self funded with not a penny from my parents or anyone else.
So 30k debt. 20k less than the average will be for those starting uni this year.
Except it wasn't 30k. By the time I'd graduated the interest had pushed it to 35k. I got onto a good graduate job earning well in London. Right at the top end for someone doing what I do at this level. It'll still take me 10 years to get the the point where I am earning enough to actually cover the interest monthly let alone actually reducing the balance. By which point I could owe them nearly 80k depending on RPI.
Does anyone think that is good, fair or logical?
I'm okay with it as I've accepted that it's a graduate tax not a loan and thatvill never pay it off barring a huge intlheritance from a long lost relative.
My issue is with the government pretending it's a loan when it's not. It's a tax call it that. I also take issue with them letting people who have rich parents pay the 'fees' upfront and so avoid the tax.
I also have issue with the government using CPI (the lower measure of inflation) for anything they pay out. And RPI (higher) for anything they take in. That's blatant profiteering in the same way that commercial banks do it.
That's depressing.
If you had a 'real' loan like a mortgage you would be shackled by this - worried about losing your job, falling ill or even getting married and having children.
Just relax and accept that you live in a nice country run by fuckwits!
I agree though - it's shit.
That's not true though is it... I will pay it off, plus interest at an extortionate rate. University should be expensive to deter fuckwits going purely for a state sponsored pissup... But the interest should be negligable
personally, i borrowed the max to go to a Russell Group. in hindsight, it has been well worth it both socially and economically.
My major bugbear is the incompetence of the repayment process. Namely, the ABSOLUTE theft of the whole of the whole process is the relationship between SLC and HMRC.
one year, i was recorded as repaying £330 for the year, even though that was my monthly payment. When I called SLC they said it would take 18 months to fix due to their relationship with HMRC and that during this period I would be paying interest on the incorrect balance. although the balance has been corrected, i am still robbed of the interest on the error. its not big potatoes and certainly not worth the time, effort and expense to fix it.
So, in interests of equity, if I am a day late paying HMRC, I am liable for a £100 penalty
but if the SLC steal your money, lump it.
will be harder in the short term, but you can look back at your achievement in making your own success for the rest of your life.
Or if you were an FD on £200k and you were offered a promotion to CEO on £400k why would you bother with all that additional work/hassle etc for £6k a year/£500 a month?