You should tell him that if he ends up earning 25k that his “massive debt” will cost him £30/month – less than 2% of his take home pay.

That’s what you should tell him.

Tell him too that if he makes it to 30k he will have to pay £67, but that is still less than 4% of his take home pay which would take it from 1900 to 1833/month.

Alternatively you could take your parents’ approach.

Up to you really.

Great piece. I was the first in my family to go to uni in 2005, and the last year to avoid top-up fees. My sister, who is two years younger, limited her choice to Welsh universities, where she wouldn’t have to pay top-up fees. The next sibling down is currently 15: she doesn’t think she’ll go to university at all. Who can blame her? We constantly hear the government claim that the prospect of debt won’t put off the poorest students, but that’s bullshit. Living in a council house on the breadline means you think all the more about the risks associated with debt. The job market’s abysmal, and my siblings are now being forced to consider whether university is “worth it”, as successive governments have commodified higher education. It makes me furious to see the rug slowly being pulled from under my siblings’ feet.

Sorry, you should also tell him that if he spends his life as a smallholder in Garnfadryn – which looks *absolutely beautiful* btw – earning (I assume) less than 21k, then he won’t have to worry about the debt at all.

We hear about the ‘squeezed’ middle class, but what about the excluded poor?

John Bird made an important point in a radio interview last week. He said that people with unemployed parents never go to university.

I do not believe that brains are dished out according to parental income. There is no genetic link between ability to earn pot loads of cash and ability to benefit from higher education.

Any plans that exclude those children from low income families or no-income families from a higher education is plain daft, and will have a serious effect on our country’s future economy. [Want proof? Tally the number of Nobel Prizes per head of population. Apart from an unrepresentative outlier of Iceland (one Icelander has a Nobel Prize) the UK has the most Nobel prizes per head of population. The reason? These are people who benefited from the opening up of higher education in the 50s. Now we are closing down higher education, and hence in the future we will no longer produce more than our fair share of brilliance.]

As the tears of frustration drop what counsel should I give? ‘Go for the debt, it’ll be all right in the end’? Or ‘Don’t do it, poor people don’t go to University – never mind your potential’?

You should sit down with a calculator, a pen and some paper and work out the projected income from the sorts of careers he wants to pursue, the cost of attaining the necessary education to get into that field of work and the impact on his salary from the loan repayments.

If the salary he can reasonably expect to earn means he can repay the loan, and be in “profit” from doing so – then it makes sense to go for the education.

Frankly, if a student is unable to carry out basic mathematics like the above – should they even be considering university?

Would you prefer Ed Miliband’s grad tax, where your daughter will still be paying for the rest of her life but have no hope of ever paying it off?

Open University degree courses cost about £4,000 or £11,000 if you do law.

Sure you don’t get the experience of “going to university” but prospective students do have the option of getting a degree without racking up massive debts.

Personally I’m in favour of a 50/50 split between students and the state when it comes to the cost of university education.

We’ve got to remember that so many more people go to uni now compared to the 1980′s.

Tell him to study in Scotland.

The weather’s crp but he might get a game for the local football team.

You should definitely tell him to apply to university, especially since he’s from a poor background and therefore will, in fact, unquestionably make a financial gain from going. e.g he will get a large amount of maintenance grant and loan *now* (before we even begin to think about bursaries) that he won’t have to pay back at all until he’s earning a decent amount and will even then only pay back a very easily affordable amount of money.

The problem, as the example of your parents aptly demonstrated, is that despite the fact that it is demonstrably rational for poor people (*especially* poor people) to go to university, the vast majority don’t because they’re afraid of “debt,” are generally uninformed about the decision they’re faced with and make irrational decisions pertaining to it.

The same thing happened with me and my family 4 years ago- we’re almost precisely on the median income, yet my family were still afraid of going to university and taking on “debt” (despite the fact that it’s not real debt functionally). This was only exacerbated by the fact that it was Cambridge, which they assumed must be more expensive (despite the fact that it meant that the bursaries I received were incredible). Apart from putting poorer students off university per se, increasing fees definitely puts them off elite institutions. Luckily I was astute or pig-headed enough to go anyway, but many people facing similar pressure don’t. I’ve seen this first hand while working in an Academy in a very deprived area, where pupils are highly irrationally averse to university on grounds that can be shown to be wholly baseless, but they still, in their gut, remain unconvinced, because they’ve long since internalised an attitude that university is for people with money, not for them.

I was talking to a friend who says her daughter’s seriously considering not going to uni because of the costs; told her that if she never earns much she won’t ever get to pay it back, that she doesn’t have to pay the fees upfront and that ‘all’ she has to pay for is day-to-day living costs and that she can get a loan, possibly even a bursary. And anyway, why should uni be a preserve of the rich – shouldn’t any able teenager who wants to go, get the chance? She wasn’t convinced.

Which brings me to this point: if the only people who get to go to university, because the poor (rightly or wrongly) believe they can’t afford it, that means that universities don’t get the BEST, but merely the wealthiest.

Which would you rather have treating you when you’re sick – someone who got there because their parents could afford it, or someone who was really, genuinely, the brightest in their cohort? Yup, me too.

So, it’s in everyone’s interests for universities to take the brightest rather than the richest. It’s in everyone’s interests to make sure the brightest, even if they (or their parents) feel they can’t afford it to make sure they know they can.
Therefore it is also in everyone’s interests for everyone to pay for the cost of university education rather than just those who go there, according to their means – i.e. through income tax.

It’s great you’re all pointing out that kids should consider projected income, but when you’re 17, that’s not so easy. Coming from a no-income family, my siblings are terrified of debt: if they leave university and can’t get a job immediately, they’ve got no safety net, no one in the family who can lend them money. They’ll leave with massive overdrafts, because they’ll have to find accommodation over the university holidays. Or, they could work for three years, and be earning and supporting themselves. My family weren’t supportive of me going to university, and that’s not unusual: massive debt is the biggest disincentive.

Telling kids to “forget about it” just won’t cut it, when all their life they’ve seen their family live hand-to-mouth.

We’re seriously researching to possibility of our youngest to go to a university elsewhere in the EU. For example, we’ve found that there are places in the Netherlands that teach courses in English; the fees are in the region of 1300-1500 euros per year. Of course, if we went down this route the chances are that our child would never return to the UK to work and live, thereby never paying a penny piece in UK tax. The lesson is, if you don’t invest in the future you cannot expect to get any return in the future. Such is the chronic short-sightedness of our ruling clique and those who pull their strings.

The weather’s crp but he might get a game for the local football team.

And he’d walk into the national rugby side.

I too was in the same situation as you though many years before you. Much harder for me as a woman when my sex was a barrier to furthering my education. I went to night school, worked and saved for many years before going to University. Throughout my time at University I held two jobs too. I did not have a social life, could not afford to drink etc etc.

I should read the document on Tuition Fees as children from poorer backgrounds will get more assistance than you portray. in the form of bursaries etc etc. There are also a number of charitable organisations whioch assist with fees. My friend’s daughter managed to obtain a lot of funds from various sources which saw her through university and the Bar.

I am very sceptical of the amount of debt that students will accrue. I would need to know how this figure is reached. Many of my friends grandchildren are finishing university and do not have anything like the figures owing that is being promulgated. They are fully involved in University life but work throughout the year and do not consume alcohol. Neither do they have the latest fashion, latest technological device nor go on holiday. Perhaps we need to look at lifestyle of today’s students.

The University budget is being reduced by 1.6%. Hardly a huge amount compared to all spending departments. Senior staff earn a fortune. We continue to invest .9% of GDP in higher ediucation whichn is comparable and indeed better than other European and world governments. We have a huge dropout – some 22% at the lower rung universities.

Perhaps you should be teaching your children now to save money towards their education. I did not need this teaching some 40 years ago – I knew I would have to work and save before considering it. My wages until I left home was used to support the family. I would urge you to read the higher education funding document. What information that is being circulated at the moment is selective – to reinforce political dogma. I agree with the higher contribution – more so after the demonstrations.

You should sit down with a calculator, a pen and some paper and work out the projected income from the sorts of careers he wants to pursue, the cost of attaining the necessary education to get into that field of work and the impact on his salary from the loan repayments.

Thanks for illustrating why these proposals are so unpopular.

Carl

shouldn’t you at least discuss with him the points cjcjc raises: that he won’t have to repay the debt unless his earnings rise above a certain level? there’s nothing in the OP to show any appreciation of this point.

8

If he was from England he’s still have to pay. Only Scottish students (and those from elsewhere in the EU interestingly) don’t have to pay tuition fees.

Galen10,

For the sake of accuracy, can I point out that all students pay tuition fees (they are billed individually) but that in the case of Scottish or EU students the fees are invoiced to their governments, not to them personally.

This is not a matter of paying or not paying tuition fees – universities charge large amounts of money for all students – it is a matter of who pays the fees for the student.

As to the original post, was not the barrier to going to university there the fact that the family did not support the aspiration? Which reflects a stupid blip in our system, whereby families had to consent to their adult children attending university. An argument for full loans is that this at least allows adults of any age the right to go to university regardless of family income – although this does not seem to have been noted by those devising the system.

I would tell my son 3 things:
1. Education is always worth it. Even if you don’t benefit financially.
2. You’ll only have to start paying back your loan once you earn more than 21.000 £. 3. So try to do a PhD after school and then write a book or do some development work in Africa, where you don’t (need to) earn that much.

You should tell him that if he ends up earning 25k that his “massive debt” will cost him £30/month – less than 2% of his take home pay.

That’s what you should tell him.

Tell him too that if he makes it to 30k he will have to pay £67, but that is still less than 4% of his take home pay which would take it from 1900 to 1833/month.

Is this really the case?

He’ll piss away more than this a week on booze than he’ll repay a month!

I was born before the last World War. I was brought up by a single parent – my mother – because my father was abroad in the forces. I do not remember seeing him till I was eight. When he came back he resumed his work as a building labourer. We lived in a northern industrial city in a terraced house without proper plumbing. I went to the local primary: classes of 50+, I do not remember anyone unable to read or write at that school. I passed the 11+, the only one in that school; to do so. My parents were overjoyed and scrimped every penny to send me to grammar school. Hard for them because, by then, I had two younger brothers. I did well, but at 18 decided I must work for their sake. I did work, taking any job, studying for a degree in the evening, helping my parents put my two brothers through school and university. One brother is a senior solicitor, the other is a chartered engineer. I tell this story not to elicit sympathy or pity, I have done very well indeed in my career, but to say that these funding proposals are not crucial to the decision that the young person has to make. What is crucial is the support they get from their families, and their own sense of drive and purpose. I am saddened by this article. Carl Legge should be saying to his child: ‘ go for it you will prevail, and we will support you all the way’

You should tell him that if he ends up earning 25k that his “massive debt” will cost him £30/month – less than 2% of his take home pay.

That’s what you should tell him.

Tell him too that if he makes it to 30k he will have to pay £67, but that is still less than 4% of his take home pay which would take it from 1900 to 1833/month.

you could also tell him that if alternatively university educations were to be funded out of general taxation, then if he ends up earning 25k or 30k the amount of tax he’ll be paying over his lifetime to fund university educations wouldn’t be terribly different to the £30 or £67 he’d be paying via the loans route. It would be less, because non-graduates will also share the burden, but it’s not a case of comparing fees and a loan with a “free” education otherwise.

‘An argument for full loans is that this at least allows adults of any age the right to go to university regardless of family income – although this does not seem to have been noted by those devising the system.’

Excellent point.

then you can talk to him about the possible consequences of “marketizing” education, and if he’s still awake after all that, point him towards one of the UK’s many excellent economics degrees the cover the topics of education, taxation, inequality, social mobility etc.

Has this guy even bothered to read the policy? If he tells his son not to go to university then it’s nobody’s fault but his.

Can someone please say if what cjcjc says @post 1 is correct?
It either is or it isn’t. If it is, then this is really a bit of a non-story.
By the time you have to pay anything back at all, you’ll already be doing not too bad, and will be in a much better position than the people who take the first buses of the morning to get to grim industrial eatates, where they spend their days in warehouses as fork lift drivers and security guards.

It seems like it’s not really a personal debt at all, and that it’s pointless worrying yourself about how much you owe, anymore than a young person should worry themselves about all the future taxes they will have to pay generally.

Paying £50 a week income tax for thirty years equals £78,000 – but no one thinks that ”they owe” all that money when they start off in their working life, it’s just PAYE.

What seems to be falling out of this piece and the above comments is that it isn’t the actual govt policy that will stop young people from poorer backgrounds from attending University.

It is the perception that poorer families have about debt (and maybe education more generally) that is the deterrence. Poorer families don’t appreciate the difference between ordinary debt (which you must repay regardless of your income) and student debt (which you won’t repay if your income doesn’t allow it).

So the underlying debate should be about how to tackle this misconception: Should government policy be tailored to directly counteract the misconception, even though it is an irrational perception on analysis? Or should those who support equal opportunity to education (which I hope includes everyone aligned with the stance of this website) do all they can to tackle the misconception itself?

I think the latter is option is preferable. But this means that continued opposition to rises in fees, as argued by this website, Labour, the NUS, and the pre-election Lib Dems, achieves exactly the opposite of what needs to happen to improve access to HE for students from poorer background. It reinforces the misconception that higher fees = University is unaffordable for the poor.

Nothing the government plans to do should stop young people from poorer backgrounds attending University. Pretending it will for ulterior political reasons only harms HE access. Stop it.

Damon, he is indeed telling the truth. I agree it’s a non-story but many on the left don’t care about the substance to this. They only seem to care that we’re not living under socialist rule. Quite sad really.

I wish people would stop calling this a debt. A debt is when the creditor sends a polite but vaguely threatening letter demanding payment. A poor credit score could follow. Maybe saving you from yourself.. The more deregulated market will just break your legs if you don’t pay them. However, if it is any consolation there will not be a hit on your credit score. Student loans are no more a debt than my food bill for the rest of my life or my future tax liability is a debt.

Sticking to the question posed.

“What do I tell my son now about higher education?”

Same as your parents told you.

“we were too poor and they couldn’t afford for me to go”

You pose the question and suggest you don’t want to say go to university because of the high fees. You then relate how your parents said no when there were no fees. Your own answer suggests that poor parents always say “No”, fees are irrelevant. What’s your point?

And just like you did he can choose to be independent and make his own decision against his parents advice.

It’s quite possible to fully understand policy (repayment conditional on earnings etc.) and still oppose the policy on solid left-wing grounds, to do with the 1) a disproportionate effect on the poor, on basis that however it is structured, poor households are simply much less comfortable taking on debt that middle class kids with the bank of mummy and daddy behind them who won’t give it a second’s thought and 2) how it’s going to change what universities do (all sorts to say here, not the time).

not for the first time, I find myself agreeing with the left on the big question (i.e. I oppose the policy too) but disagreeing with almost everything I read on the subject from left wingers, especially those who feel passionately about it. See also Vodafone and taxation.

Luis,

Since as far as I can see the left-wing (only?) opposition to the proposed measures has been on two coherent grounds – that it will deter students from a poor background from attending university (please note, the evidence from every country where something similiar has been tried and the evidence from the partial introduction of fees and the introduction of student loans suggests this is nonsense anyway) and that it is the role of the state to provide free education – I am intrigued to know how you differ on this matter?

Incidentally, the policy is explicitly designed to lessen state control over universities and to allow them to change what they do as a result. This could be seen as a bad thing, but the case needs to be made as to why state control is a good thing in the first place.

Richard W – I agree, and I wish I could think of a more appropriate word than ‘debt’.

Tell him to study as hard as possible to get the best degree he can and then emigrate. This country’s bad enough now but in a decade the Tories (or Labour, the Liberals will be a thing of distant memory with the word Clegg having replaced Judas as a synonym for traitor) will probably be processing the poor into Soylent Green

You could tell him to do a proper degree, so then it’ll be worth the debt.

I still don’t get this “poor people going to uni” issue. It’s people coming OUT of uni with high debt and no job prospects that is a problem. High debt and a good degree isn’t a problem, because you then go get a high paying job and pay off your debts.

Thanks to all for taking the time to comment.

Many have advised me to ‘tell’ my son certain things. Understandable given the headline which is Sunny’s not mine. My post spoke of giving advice and counsel, not instruction. It’s not my decision, it’s his. I will support him to the best of my ability to make the decision and after, whatever he decides.

@cjcjc and others say it’s a simple cost benefit analysis. In a way it is and it’s also a much more complex decision. If you had perfect information about what you wanted to do, whether you’d get a job/career doing that, how mcuh you’d earn, how long you’d be happy to do it etc etc. Then you could make a simple cost/benefit decision. In fact, I could help my son learn some fun maths/accounting by discounting the cash flow and coming up with a NPV. But it’s not that simple – many of those aspects of the decision are unknown. And not everybody judges all of their decisions in this context just on financial grounds. When the time comes we will do the numbers, for both our sakes.

However, and as many picked up, the point I was seeking to make about when I was 18 was that my parents were cost and risk averse. As a result, they did not want to contemplate me going to Uni. It clearly wasn’t completey rational and I fear that many in similar positions now would make a similar decision to my parents.

I agree with @Richard Blogger and @Claire that the consequence of this is a massive waste for the country of its potential talent.

@Jane spoke about teaching him about saving. We already do this and he is very sensible and prudent how he uses his money. We’ve started the ball rolling by paying his Child Benefit into a savings account in his name. It’s be a shame for him if that stopped at 16.

Finally @Bill Kristol Balls mentioned the OU. I’m a great fan as an OU MBA alumni. Fortunately for me my then employer was happy to invest money in me and paid the approximately £12k of fees. At the time there was no way I could have raised the cash to service a loan for them.

Carl,

Any comment on my point that loans should allow greater independence from the whims of parental decisions then?

@Watchman

I absolutely agree that the adult son/daughter should have the means to act on their own decision be it loans or grants. I had a nightmare.

Thanks for coming back on that

@RichhardW:

I wish people would stop calling this a debt. A debt is when the creditor sends a polite but vaguely threatening letter demanding payment.

No – it’s when you owe money: borrowing a tenner from a freind is still a debt even if s/he doesn’t turn up six month later with a baseball bat demanding repayment at 1000% interest. Owing the government for your undergraduate tuition is still a debt; it’s just that the government takes it from your salary without the need for burly men with knuckle dusters. Tthe fact that neither New Labour nor the Coalition can come up with a better euphemism is their own stupid fault.

@CarLegge – what may have happened now is that the cost- and risk-averseness has passed from parent to child.

PS: There’s one other objection: the idea that universities should compete on price – but then I’ve already made that point elsewhere.

Carl, I started my degree as a mature student aged 25 in 1999, didn’t have to pay the top up fee but did have to take out a loan in order to live. I knew when I started I’d graduate with about £12K debt, which I did.

I haven’t paid a penny back as I’ve never hit the earnings threshold. Given I work part time and look after the family while my fiancée works full time, it’s unlikely I’ll be making any payments for awhile. If circumstances change, I’ll start repaying if my income goes over £15K. So if my income is £25K I’ll have to pay back £900.

If my income is £25K, I’ll be able to afford that, given my current income is less than £4K.

The biggest problem with both the current setup and the proposed changes is it calls things a loan and debt. But if you don’t pay it off after a period of time, the ‘debt’ is completely written off, and the interest rate is negligible.

The longer I spend not paying off that debt, the better off I actually are as in real terms the amount is shrinking constantly.

The proposals aren’t good. But they’re nowhere near as bad as some are painting, and the Govt has reduced the proposed level of debt (ie fees charged) significantly from what Browne proposed and Labour would’ve undoubtedly implemented.

This shouldn’t put anyone off going, either you earn enough to be able to pay it off without noticing, or you don’t earn enough to hit the threshold and never need to worry about it. Like me.

That the Govt is painting it as a loan not a de facto graduate tax (which it has been since introduced in 1998) is something that makes it offputting.

Education should be funded through general taxation. But not enough people voted for one of the two parties committed to raising taxes to do this. Most voted for Tories or Labour, who were committed to increasing fees substantially.

Didn’t win the argument with the voters

And I just read your OU comment–one of the things the proposals will help with is part time students, who’re finally included in the same structure as full timers, so they don’t need to find th emoney up front.

Tell him that if he earns 25k a year, he’ll have to pay pack each year £360; less than a gym membership or Sky Sports subscription. Also tell him that income tax in the 1970s was a lot higher than 20%.

In reply to Mark M, and also Carl’s points about cost, benefit and risk:

Let’s assume there are two types of degrees:

-’Proper degrees’ (using Mark’s term), which are in subjects selected solely to enhance your value to the labour market by making you more employable and more able to command a higher salary;

-’Passion degrees’, which are in subjects that are of deep interest to the student, but add nothing to their employability or expected salary.

(In reality, these degree types are likely to be extreme ends of a continuum.)

Proper degrees are sure to come out favourably in terms of cost/benefit. If the cost of a degree is always higher than what you can expect to gain from the higher paid employment you derive from it, I’d declare the entire HE funding arrangement totally broken (along with the future of the country).

It gets more complicated with passion degrees. Whether or not it is financially worthwhile studying a degree depends on your salary expectations (with or without your degree, it makes no difference for passion degrees). If you expect to earn less than £21000 a year, the only thing lost is the income from the three years out of the labour market whilst studying. If you expect to earn over £21000, it then becomes a question of whether it is worth spending 9% of what you earn above £21000 to learn in depth about a subject you’re passionate about. If the answer is ‘no’, I’d suggest academia is not for you.

So I fail to see the risk. Getting a degree will be pretty much always worth it.

Carl Legge, I’m doubting your claim to be poor if you’re putting your son’s child benefit into a trust fund instead of spending it on essentials for him. It’s laughable that you have the cheek to say it will be a shame if it’s cut.

The greed of the socialist left really annoys me sometimes.

@ Duncan Stott, 27

The distinction between the policy and the perceptions of the policy are irrelevant in this case because we are only concerned with the effects of implementing the policy and the perceptions of the policy are necessarily entailed by implementing the policy.

“Doing all we can to tackle the misperception” will do virtually nothing to change misperceptions. Most of the poorest families/students are completely unaware of the details of the policy. The minority that are aware still misconceive the actual relevance of of these facts: e.g. that the amount being paid back will be less than their mobile phone bill. Even my family, who knew precisely what my financial state was throughout university remained terrified of the “debt,” and when I insisted that it bore none of the consequences of normal debt, they just insisted “debt is debt.” The situation is even more extreme with the overwhelmingly poor students I worked with for a year, who aren’t aware of the financial facts and have none of the wherewithal to understand them. Bear in mind that you can’t just reason with 18 year old students, you need to have them convinced that university is an option by 15/16 so they work hard enough for university to be an option in 3 years time. Incidentally, it’s not just ‘economically illiterate’ poor children you need to convince: the majority of teachers advising them understanding none of these issues and systematically misadvise them.

Any idea that you can rationally change students perceptions from the top down is definitely unworkable. There’s a substantial literature already showing that poor children are disposed to make a host of self-defeating choices in navigating the education system: for example, shying away from “prestigious” courses like Law or History to do “practical” courses that should lead into a job (and of course don’t, because they’re massively looked down on, compared to typically middle class pursuits). Working class students also regularly tend to pick less prestigious universities than their grades would warrant, on the assumption that they must be full of posh, clever people not like them, whereas of course less smart middle class students leap at the best institutions. These decisions are rarely informed by rational choice style analysis, they’re gut decisions informed by a multiplicity of sources (friends, parents etc) and will be utterly unmoved by Cameron announcing that “really it’s more like future tax liability than debt per se” or by you or I repeating this on our political blogs.

@15. Sunny Hundal

“Thanks for illustrating why these proposals are so unpopular.”

- See (1) by cjcjc – These proposals are unpopular because people like you prefer to maintain the willful ignorance of a few. You’re a Labour man, and clearly a fan of Ed, so please Sunny do tell what exactly the difference between the current proposals and a graduate tax actually is for the end user??? Oh thats right, the only difference is that a “loan” is balance and time limited, whilst a tax isn’t. Otherwise both come out of your gross income, and are a proportion of earnings.

“We hear about the ‘squeezed’ middle class, but what about the excluded poor?

‘Go for the debt, it’ll be all right in the end’? Or ‘Don’t do it, poor people don’t go to University – never mind your potential’?”

“Poor people dont go to University…….”
But WHY??? (not how..)

This is the reason that all people are illiberal…
University, hospital, even death needs money…..
But WHY??? (not how..)

And what WE DO about this… (not think..)

A friend for poor Greece,,,,,,,,,,,,,

@redpesto

The risk averseness may have passed, only time will tell. The point I was attempting to make was that the attitude my parents had is enough to restrict many poorer people now from going to uni.

See @David Moss

You elegantly put some weight behind the attitudes I was trying to express. Thanks.

@Sam

We all make choices. Given the only evidence you have is this blog and twitter, you’re probably not in a position to:
- say whether my decisions mean I’m poor or not or
- extrapolate whether I’m greedy, or
- whether I’m of the ‘socialist left’.

Thanks for the contribution though.

David Moss,

fair enough, leaving comments on blogposts won’t change the endemic misperception. But 50,000 protesters will reinforce it. If there was large-scale political will amongst the Left to change this, it could be changed. But while there are votes in it, I guess it’s too easy to pander to public misunderstanding to extract votes rather than make the case for why the public is wrong.

I of course could have written the above paragraph on many other topics.

@15. The unpopularity is because of the ignorance of the workings of the scheme – and because of the seemingly popular notion that university education should be free, paid for by the magical money tree which sheds million pound bank notes about this time of year, and will solve all our problems (or else, among head-in-the-hand leftists like yourself, that we all stick it on the deficit and there’ll be no problems like debt interest with that whatsoever).

Back in the real world, we can’t afford to have 50% of our kids doss about for three years for free, whether lots of people want it or not. And by doss about, that includes three years of Land Management at Cambridge and not just Cliche Degree Studies at Made-Up-Ex-Poly. University education isn’t a right, not even for middle class kids who happened to have smashed up Millbank last Wednesday and think themselves radical.

“There’s no money left” as someone once said; we need to get back to the country making things, and white collar employers recognising that there’s nothing ignoble about the University of Life and that they might have to hire some of the alumni as receptionists and clerks in future.

So fuck off with your pompous “Oh look these proposals are unpopular, so Labour shills should get their way in the face of an enormous deficit and a Labour vote of 28%, haw haw haw haw”: it’s a tough decision that has to be made.

My advice would be to tell him to go to university, but to let him know in no uncertain terms that one of his priorities will be to build up contacts and good relationships with those currently within the industry he wishes to work.

Unless he will be studying an esoteric subject with low take up, “what he knows” will be roughly equal to what several hundred, possibly thousands of other graduates with similar grades “know”. So it will be “who he knows” that will help him secure that plum job that will actually allow him to tackle his debt, and that he will enjoy.

Tell him to go study abroad! Many European universities offer undergraduate degrees in English for the fraction of the cost here. And the experience must be second to none.

I haven’t read the comments, but the best investment you can make is in yourself.

If you’re a lawyer then surely you can afford to subsidize him?

Tell him to take out the loan, then go a casino and put it on black. If he wins he goes to uni for little cost, if he loses then he has a great icebreaker for networking events and achieves pretty much the same thing for his career.

So this whole issue is being spun by disinformation it seems.
From the left – and by Sunny too I guess.
Ex-students on average earnings are only going to have to pay the price of a gym membership or a season ticket for Crystal Palace FC every year.

So why has this website made such a big deal about this?
Having threads about what Paul O’Grady thinks – and You Gov polls that ask questions of people who probably are also misinformed.
Is it all just part of the left/right ideological struggle, of which spinning and disinformnation is a part?

I must say – it smacks of SWP histronics.
http://www.socialistworker.co.uk/art.php?id=23028

@56, and others: the point is, if the Tories didn’t want the policy to have the effect it’s having, they would have positioned it differently. Like, not using the “debt” word, because of its known poisonous implications for working-class families. It’s not the fault of left-wing commentators that the government has chosen to bring the scheme in using terms and structures that will strongly deter poor people from going to university.

I agree completely with Luis here. There is nothing wrong at all with the concept that, if people who go to university with their places paid for by the taxpayer end up earning a great deal of money, some of it should go back towards the cost of their education. But this isn’t the way to implement it.

john b – well OK a little bit. But the idea that you’ll only be paying back £360 a year when you are earning £25,000 is something that even a Daily Star reader can work out and understand. That at £25k, you’re only paying 9% of £4,000 per year.

Anyone can grasp that fact easily enough. So I can’t see what this is really about.

If there continue to be ”support the students” thereads on here, then I think I’ll understand what’s going on. That it’s about that ”mission” that there was a thread about the other day.

@ 26 – yes, cjcjc is correct. It looks like the new proposals are better for people from poorer backgrounds. IF the govt. stick to the thresholds. Labour didn’t and one of my sisters payments started at a much lower threshold than mine.

The real story is the cuts to universities which means whole departments shutting down. The changes in teacher education are awful. But this is getting lost in the fees debate. There shouldn’t be any fees but thanks to Labour introducing fees, the only thing that is going to happen to them is increases.

Perhaps parents should worry more about what to tell their daughters. I shouldn’t be at all surprised if we didn’t see a lot more young women financing their higher education studies through part-time work to avoid piling up student loans:

“Savanna is a English 23yrs old brunette with green eyes. She is a university student and only works for us one day a week”
http://www.northcheammassage.co.uk/savanna1.htmlerhaps parent

Correction – the link @60 got messed up:
http://www.northcheammassage.co.uk/savanna1.html

60. Ah, that’s the problem solved for my lovely daughter! I’ll let her know she needn’t worry about money when she gets to uni.

One question. But if everyone’s going to pay back “so little”, judging by what several Wisemen are saying on this thread, how many people are going to repay the full £27,000 (plus interest)?

In which case, how is the whole HE system not going to end up bankrupt? Or am I missign something here?

PS The Wisemen are also forgetting the hefty student loan added to the new “improved” uni fees. But to them £100 to £150 a month (every month) taken off your wages is nowt is it.

“how many people are going to repay the full £27,000 (plus interest)?”

The top two-thirds of graduates in terms of earnings, according to the IFS estimates.
**The bottom third will pay less than under the current arrangement.**

In rough terms if your average earnings over 30 years are approx 38k you will have paid the lot back, assuming a 4% interest rate.

Come on now claude. What’s with this ‘Wisemen’?
I would swap my wages in a second if I could move to earning £25,000 and pay back an extra £360 a year.
It’s been pointed out already that a large part of the debts owed will be written off when they haven’t been payed after 30 years.

We asked data analyst Moneyfacts to calculate how long it would take a graduate to repay their debt.

We assumed they start on a salary of £21,000 and get a pay rise of 3% every year. To calculate the rate of interest, we set RPI at 2%.

Using these figures, Moneyfacts calculated that graduates with a debt of £43,500 would never repay all their loan. Instead they would repay £33,217, but much of this would be interest. And, as a result of further interest added to the loan, £73,659 would be wiped off after 30 years.

If tuition fees were £7,000, then the same graduate may have a total debt of £37,500. Using the same calculation repayments would be the same, but the amount written off would be £56,199.

http://www.thisismoney.co.uk/savings-and-banking/student-finance/article.html?in_article_id=518001&in_page_id=52

I’m not sure about how the student loan for living expenses will work out, but the fees aren’t really an issue. You could almost call it free at the point of delivery.

Earwicga has it right when she says it’s whether these percentages like 9%, and the £21K threshold stay fixed, or whether once the system is in place, these figures can be raised and lowered at will and graduates are squeezed like rail passengers.

The universities might argue that once they get higer student fees, then they will be able to start spending more money on the quality of the universities and the education.

I’m not sure about how the student loan for living expenses will work out, but the fees aren’t really an issue.

If fees aren’t an issue, the loan isn’t either, as the fees are paid for by adding the money to the amount on your student loan account.

Loans can be taken into account and worked out in the same way, the difference is under the nwer system, poorer kids can get bursaries to help with living expenses, I couldn’t get that, it was all loan plus earnings plus overdraft.

Do I like the proposals? No. Are the proposals better overall than the current system? Yes. That’s my bottom line. It’s not what I want, but it’s better than status quo.

@62: “60. Ah, that’s the problem solved for my lovely daughter! I’ll let her know she needn’t worry about money when she gets to uni.”

Some years back now, I came upon this Penguin (really) paperback in the best-selling book section of a Tesco superstore where I used to shop. It’s an autobiographical account by another girl who, in an enterprising spirit, also financed her higher education studies by working part-time at the massage parlour down the road from her regular student lodgings. In part, the book reads like an operations manual with lots of helpful health and safety tips as well as recommendations about efficient working practices:

Confessions of a Working Girl [Paperback] by Miss S [Penguin Books, 2007]:
http://www.amazon.co.uk/Confessions-Working-Girl-Miss-S/dp/0141032340

“WOMEN university students now outnumber men across all subject areas, from engineering to medicine and law to physical sciences.”
http://www.timesonline.co.uk/article/0,,2-2356965.html

We have come a long way since Daniel Defoe wrote this in 1719:

“I have often thought of it as one of the most barbarous customs in the world, considering us as a civilized and a Christian country, that we deny the advantages of learning to women. We reproach the sex every day with folly and impertinence; while I am confident, had they the advantages of education equal to us, they would be guilty of less than ourselves.”
http://www.fordham.edu/halsall/mod/1719defoe-women.html

Claude, to be paying back £100 a month you’d need to be earning £34,332 a year.
And to be paying back £150 a month, over £41,000.

Unless I’m missing something, this whole thing is a joke. I have no sympathy for someone who has to pay back an extra 100 or 150 quid a month as they will be making huge money anyway.

And as for financing that post-graduate degree, we have the luminous example of Dr Brooke Magnanti:

“While completing her doctoral studies, between 2003 and 2004, Magnanti supported her income by working as a London call girl. Her diary, published as the anonymous blog Belle de Jour: Diary of a London Call Girl became increasingly popular, as speculation surrounded the identity of Belle de Jour, and whether the diary was even real.”
http://en.wikipedia.org/wiki/Belle_de_Jour_(writer)

@68 Do you agree that there’s a good chance significant chunks will never be repaid? You don’t really expect the biggest majority of graduates to earn well over the median salary? How is the system going to be sustainable?

Do you agree that there’s a good chance significant chunks will never be repaid?

Depends what you mean by significant, but a large amount under the current and proposed changes aren’t repaid (see my comment above about my loan under the current system)

You don’t really expect the biggest majority of graduates to earn well over the median salary?

The Browne review figures indicate that most currently do, why do you think that’ll change?

How is the system going to be sustainable?

Because those on higher incomes will pay a higher interest rate which’ll make up shortfall, a majority will repay in part or full, but only if they earn over £21K.

Claude, I am the least qualified person to talk about this. I knew none of this detail three days ago – but it seems to be how MatGB says.
Or no one has come in and said that it’s wrong anyway.
If it was wrong, then surely someone would have made a post and just simply explained why.

It’s actually really annoying that this is being spun so blatantly for ideological reasons and that deliberate obfuscation is taking place.

It does turn me off the left and ”the mission” that some people on the left state they are on. (To fight the Lib/Cons and the cuts).

#68
to be paying back £100 a month you’d need to be earning £34,332 a year.
And to be paying back £150 a month, over £41,000.

And the student loan? You left that behind. Or has that magically vanished school-of Nick Clegg’s promises?

This is the continuation down the line of the “normalisation” of debt. “Stop whining mate, what’s £150 a month”. We already live in a society where mortgage lending means people actually need to earn more than £54,000 a year before they can get a 90 per cent mortgage on an average home. Not that renting is much cheaper either, the whole housing sytem is mental.

I agree with you that an income placed at £34,000 a year is certainly a very good one. But you have to take into account that:

a) these people will already pay a much higher rate of income tax (therefore they’re already doing their fair bit to repay back into society);
b) that on top of repaying the fee there’s a hefty student loan instalment each month;
c) that as consumers they will be deterred from taking out more forms of credit and will presumably tighten their belt meaning less money into “consumer society”;
d) that in parts of the country the same income is not as high as it would be in others;
e) graduates with an average income of £27,000 will pay back more than any of their contemporaries because, under the slower repayment process, they will accumulate more interest than those on higher incomes.

And that’s without delving into arguments like the marketisation of Higher Education, cuts on education and the comparative issue that, objectively, HE is totally free or much cheaper at point of use in a number of countries. How can Scandinavia and Germany educate their population without saddling them with a lifetime prospect of debt and still produce decent universities along a system of apprenticeship that the UK can only dream of?

Doesn’t that you or are you really so certain the Libservatives are going the right way?

And these are all fair doubts. You can’t sweep them aside patronising people that “It does turn me off the left and ”the mission” that some people on the left state they are on“. I couldn’t give a mokey’s if it turns you off. It turns me off that there are people ready to toe the “party line” so easily when only a few months ago these same people were the Taliban of anti-tuition fees. Funny old world this, eh?

Doesn’t that bother you, I meant to type above. Read it back 34 times, still typos. I’m hopeless.

Perhaps you son could help you understand the proposal and recent history and get over your “Thatcher Britain” fantasy which entering the real world after your fantasy education clearly didn’t manage for you. ( Student’s were also better off, in terms of getting everyone else to pay for them, in “Thatcher’s Britain” than Brown or Blair’s – the fact you describe things like this just shows your blind prejudice.

In short grow up. Education has NEVER been free. Someone has always had to pay. The questions if who and how. The answer is those who benefit clearly from it themselves. Those who don’t become rich because of it don’t pay. ( Why is that so hard to understand ?)

Anyone who wants to go to University should be able to grasp these facts – if they can’t their IQ is clearly so low that University is not the right life path for them.

Look, it isn’t really a “debt” at all, is it?

It is to all extents and purposes a tax liability which is charged against marginal income above a certain level (just as other tax obligations are), the only difference being that this liability comes to an end either after a certain amount has been paid or after 30 years.

It is nothing other than a particular and not especially onerous form of graduate tax.

And, in terms of how it impacts low versus high earners, quite “progressive”, certainly relative to the existing arrangements.

How can Scandinavia and Germany educate their population without saddling them with a lifetime prospect of debt and still produce decent universities

Simple answer: they don’t. None of the top 50 global universities are in Germany or Scandinavia. Eight are in the UK.

Germany (don’t know about Scandi) takes a wholly pragmatic approach, with very strict differentiation between “academic” and “vocational” education from 15 onwards. A very small proportion (15% I think) of students attend “universities”.
A greater number attend “polytechnics” where thet learn to, erm, make stuff.

How’s that working out for them?

Claude. When you ask a question, like this

And the student loan? You left that behind.

It would do yourposition in the discussion a lot of good if you would then follw the basic courtesy and read the answers given. I, and others, have already answered your repeated question about the loan.

The fee repayment scheme includes the student loan, indeed, it in fact is the student loan. When they’re talking of a typical student graduating with a notional debt of £30K, that’s £6K per year for 3 years of fees, plus £4K per year of loan.

All of the numbers quoted about how lower paid graduates won’t have to worry about the repayments, etc, apply equally to maintenance loan, as the fees are paid by the student loan company on the students behalf, as they currently are.

The rest of your comment appears to either be based on the false premise that we’re ignoring the loan, when in fact the opposite is true, we’re talking entirely about the loan, or on other false premises, ignoring the cutoff date for repayments and the loan being written off.

I say again. I don’t like these proposals. But they’re better than the status quo, and not enough people voted for either of the two national parties prepared to increase taxation to pay for it differently. Specifically, the Government proposals are better than the Browne report proposals, and the funding settlement for HE is better than Browne was told to expect by Labour under his initial terms of reference.

As Don Paskini has established on another thread, if unis were paid for out of general taxation it would cost 2p more on the standard rate – which would cost someone on £25k per annum an extra £29 per month.

Under the loan repayment scheme, a graduate earning £25k would be charged £30 per month.

They are rioting over £1 per month!

earwicga/59: “The real story is the cuts to universities which means whole departments shutting down.”

Agreed, but again not in the way that is being highlighted by most of the opposition. The cuts in block grant teaching funding from HEFCE will be cancelled out by the increased tuition fees (more than cancelled out, if they charge the full £9,000, which they all will, I’m sure) charged, on a per-student basis.

The catch is that student numbers get deregulated, so that’s only true on an institutional basis if you can attract at least as many students as you were previously allocated under HEFCE. (Actually, you can get away with slightly fewer, if you charge £9k)

This moves UK undergraduate student numbers to the same footing as international undergraduates and all postgraduates – universities get what they can attract and get paid accordingly.

Many of the universities being held up as “isn’t this terrible – their entire teaching budget has been cut” will, I expect, actually end up with the government giving more money to them (in the form of paid tuition fees) than they previously got from the HEFCE block grant, because they’ll attract more students.

Others will get less, and perhaps some universities – and again, not necessarily the ones people expect – will end up shrinking significantly, merging with other institutions, or vanishing.

The deregulation of student numbers is the really unpredictable part of these proposals: the rest is basically just there to enable it to happen. (And hardly anyone is mentioning it, because the rest looks scarier at first glance)

claude/70: “How is the system going to be sustainable?”

Increased stealth funding from general taxation and government debt. (It does amuse me that it’s the Tories proposing this)

It’s actually quite clever. I’ve said before that it could be rebranded as a graduate tax (as cjcjc described in 76), combined with means-tested grants between £3750 and £7k in size, abolition of tuition fees, and an expansion of HE funding and independence without changing a single detail, just the names of things (in fact, if you change the names of a few items, and nothing else, Browne looks very similar to the NUS Graduate Tax proposal – though Browne is marginally better for low-earning graduates and somewhat worse for high-earning ones than the NUS proposal).

On further thought, though, that’s not actually true. There is a difference, and it’s in the government’s balance sheet. If the government commits to pay for all of this from general taxation (including a graduate tax) then it pays now, takes out a loan to cover costs, which it will repay later from graduate tax. This increases government debt and this will of course lead to DOOM! DOOM! (and the Tories not voting for it)

If the government instead charges students tuition fees, and makes them take out a “loan” to pay it off, then it’s a bit different. The government still takes out a loan (a real one) to pay the university costs, but the value of this on the balance sheet is offset against the “loan” (the fake one) from the student. The government’s total assets/liabilities balance remains the same as now. Even better, the fake “loan” that the government holds for student repayments can be sold to private investors for real money, which the government can then use to repay its real loan.

It’s really quite a clever accounting trick, if you ignore the massive political side-effects in the loans vs tax branding issue.

@79
While I’m prepared to concede you’re right on the “loan” point, are you also prepared to concede that you conveniently glossed over 4 out of 5 points (a to e) that I made above @73?

@77 john b
Not strictly true. University of Copenhagen is.
If you look at the ‘Academic Reputation’ ranking you can also add both Heidelberg in Germany and Amsterdam to the Top 50.

Incidentally, I dont believe in University Ranking. Never have, never will. It means FA. It depends on the actual faculty/department/degree.

Actually Claude, I’d already answered a few, but if you want a detailed point by point.

a) these people will already pay a much higher rate of income tax (therefore they’re already doing their fair bit to repay back into society);

True, and like I’ve said repeatedly, that’s my preferred option, however 70% of the population voted for parties favouring higher fees instead.

However, the income tax is future money that goes to the treasury. The fees are money the treasury borrows on the (very cheap) govt bonds market and gives to the university now, to be possibly repaid in the future, or written off and then repaid out of general taxation anyway (mine will very likely be, for example).

b) that on top of repaying the fee there’s a hefty student loan instalment each month;

Nope, already covered, the fee and loan repayment are the same thing, both are combined together and worked out together.

c) that as consumers they will be deterred from taking out more forms of credit and will presumably tighten their belt meaning less money into “consumer society”;

Where does this come from? It has no effect on credit rating, and is only repaid if you’re earning a large amount of money by most standards. This is, I’m afraid, a spurious point. It might be true if they’re stupid, but if they’re graduates earning good money, one would hope they’re not. It certainly never stopped me, it’s my cash debts since graduation that got me into a massive hole, the loan is irrelevent.

d) that in parts of the country the same income is not as high as it would be in others;

This isn’t a coherent English statement.

I assume you mean in some parts of the country (ie London) a salary of £21K is worth less given overall cost of living? Yes, that’s true, but if that bothers you, work somewhere else, my standard of living has gone up since I moved to Yorkshire, despite my earnings going down. And of course if enough people take this sensible option, it’ll bring prices down in the expensive bits.

If that wasn’t what you meant, feel free to remake the point in an understandable manner.

e) graduates with an average income of £27,000 will pay back more than any of their contemporaries because, under the slower repayment process, they will accumulate more interest than those on higher incomes.

a) answered above b) average income isn’t £27K, I think it’s about £21, which is why the threshold is set at that level if I remember the figures correctly (open to correction there, can’t be arsed to go look).

c) the number from the link you give makes no sense. Someone earning £27K would repay £16,200 over the 30 year loan period, then it would be written off. They’d be repaying £540 per year. Someone earning roughly £50K+ would repay the full loan amount plus interest, someone on £27K doesn’t even cover half the loan, let alone the interest on top.

There’s a lot of hyperbole about this, on both sides. I repeat. I want to raise taxes to pay for university education, and probably cut Uni places and expand technical/vocational/polytechnic places. Unfortunately, the party that had that as a fully costed policy only got 24% of the vote. The country, it appears, voted to increase fees, and some of those voting for parties that said they were going to increae fees are now complaining about this result.

“I repeat. I want to raise taxes to pay for university education, and probably cut Uni places and expand technical/vocational/polytechnic places”
On this we fully agree. Well said.

However, I hope you wrote this sentence in the heat of the moment because it’s actually impossible to describe without doing the general gentlemanly tone of this debate a disservice:

“if that bothers you, work somewhere else, ”
Wow, cheers mate. The doubts of millions of people gone in one fell swoop. Amazing.

Claude, what are you actually objecting to?

I’ve moved across the country several times since I graduated, and if the job were good enough would happily do so again. Graduate mobility within the employment market is one of the reasons for the graduate premium.

When choosing where to live, you have to balance up multiple factors, one of them is pay, but another is cost of living in the area. I specifically left London as I didn’t think I would be able to earn enough to pay my way there. Like I’ve said above, I feel much better off in Yorkshire, where costs are a lot lower, than I did in Devon (where wages are low but costs are high) or London (Where wages are high but costs are higher).

If that’s not what you’re objecting to, then please explain, but I’ve now given two answers where I’ve had to guess at what you’re actually saying. I’m trying to be clear in my answers, but it’s hard if the question is unclear and the requested clarification doesn’t appear.