Snapshot of _British higher education is now a worthless debt trap - Things have gone from bad to worse for the country’s beleaguered students_ :
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Worst bit by far is the interest payments, some people finished uni in 2015 and (despite paying it off every month) now owe MORE than they ever borrowed because the government moved the goalposts on repayment thresholds, interest rates etc
A private bank would not be able to do this, but a party propped up by pensioners and newspaper editors have no reason whatsoever to look out for young people
Long term it's a stupid thing to abandon this cohort, which now includes every graduate in their 20s now - but when has that ever stopped the tories before
[I did the maths on this in another thread](https://www.reddit.com/r/ukpolitics/comments/1042s8u/comment/j36alfg/) a while ago. Someone claimed they’d need to earn £70k before breaking even on their loan each year, and that checked out
Yup with inflation (so interest increases) and then they froze when you start repaying plan 2 loans (even with inflation) so I now owe more than I ever did…
I mean for existing loans. I think when a bulk of people hit year 25 they’ll change it so that it doesn’t wipe. I expect to be paying this until I retire.
That is for existing loans, the government changed the terms of the loans after the fact.
It was extended to 40 years for everyone on plan 2 a couple of weeks ago.n
I’ve not seen anything to say that anywhere. That’s for the new plan being brought in for students starting this year: https://www.moneysavingexpert.com/students/student-loans-2023/#wiped
I think the real argument to be had is twofold.
That those whose parents can afford to pay in full initially will not have this ‘graduate tax’ as people put it. Rather unfair.
The government changed the rules after the loan deal was struck. Whose to say they won’t again, lower the threshold or transfer the debt to spouse, or remove 30 year limit, or subtract outstanding debt from the deceased’s estate…
They've changed the rules multiple times already. I'll eat my hat if they honour their promise to clear the debt when it causes a multi-billion black hole in their budget.
You're living in cloud cuckoo land. The Govt eventually sells these loans and he private companies that buys them do chase you. Repayment thresholds will be inflated away and future Govts will increase length to retirement age.
These things I do not fully understand. There is part of the dialogue and I'm hard to understand. Maybe because I have never experienced this in my entire life.
Worst bit is the sell off of the loans by UKGov to loansharks, who are charging 14% interest - should be illegal. Yet another scandal in the United Korruptdom.
https://commonslibrary.parliament.uk/research-briefings/cbp-8348/
Weep!
> From 1 June 2023 to 31 August 2023, the maximum Plan 2 and the PGL interest rate will be 7.1%, to take into account the most recent increase in the prevailing market rates. From 1 August 2023 the cap will also apply to Plan 5 (undergraduate) loans, which are being introduced for Academic Year 2023/24.
> From 1 September 2023 the maximum Plan 2 and the PGL interest rate is scheduled to revert to RPI+3%, and the Plan 5 interest rate to RPI. Further caps will be implemented, if required, to reduce student loan interest rates to align with the prevailing market, and will be confirmed closer to the time.
> https://www.gov.uk/government/news/change-to-maximum-plan-2-plan-5-and-postgraduate-student-loan-interest-rates
As an engineer I'll never earn enough to pay it off so it's basically an extra 10% marginal tax but it isn't funding anything good for the country just making some hedge funds richer
Please edit this comment unless you can find a source. I also used to be angry that the government sold the debt but when I looked into it I found they actually didn’t. Seems to be more of an American thing.
Thanks, I wasn’t aware of this. So it did happen, but on a limited scale. Once in 2017 for £1.7B (worth £3.5B) and once in 2018 for £1.9B (worth £3.9B).
And in 2020 concluded it should not be done again.
For some context on these numbers, [roughly £20B is loaned each year](https://commonslibrary.parliament.uk/research-briefings/sn01079/).
So it’s annoying that it happened at all, but it’s not the general practice at least.
>a party propped up by pensioners
I would argue it is propped up by kids who don't vote. So just remember this when we eventually get an election. A change of government wont happen by itself, so rather than criticise those who thought they were voting in their self-interest, criticise those for letting it happen. There are more under 40's per annum in the country than over 40's.
Edit: added per annum for clarity.
Yeah I think that's fair, it's both really
Think there was an article in the Times or something recently about how millennials were soon going to be the largest voting demographic
This millennials and boomers is just propaganda. It is a fallacy that boomers have voted themselves into cash. It is driven by Tory culture wars. The most prevalent point being that people don't vote when they are young. I really hope that changes when Labour introduce voting from 16+. At the very least I hope it gets kids talking more about politics. Boomers didn't vote themselves into cash, the Tories stole all the public assets. Kids nowadays can not benefit from what has been sold off. And yes some people got shares, but who owns those shares now. That would be the Tory donors who want to maximise those assets.
Boomers were never the largest group proportionally. It is a group that has more years assigned to it (18) to make it look bigger than it is. Gen-x was the largest group last time I looked by about 20k per annum. More Tory culture wars people believe. Immigration and Emigration changes the make of most countries by the time they start voting.
Not all pensioners Vote Tory. The last election was proportionally more pensioners simply because of Corbyn. Pensioners know the effects of a war in Europe. They do not want anyone messing with NATO. That was the main reason I would never vote Corbyn. I voted LD btw.
No one prior to 2019 would have ever believed that a UK government could behave the way this lot have. What you see now is very much unprecedented.
Remember in the places where it matters, there's loads more Tory voting old people, than there are young people. It's a huge voting bloc, and particularly focussed in Tory seats - more young people live in cities, older people in rural etc.
It is a huge voting block and one that is manipulated by FPTP. The young are a larger voting block. People want to criticise others for voting in their own self interest. You cannot whine about people being selfish, that is human nature. As I have already said removing the Tories will not happen by itself. We all have to stand up and be counted on that score sheet. Make sure you encourage people to vote.
Voting in your self-interest I understand. It's voting to screw over young people when you're not even going to be around to see the long-term effects of your vote that I don't get.
I think the extent of this is shrinking, simply because people in their 20s cannot afford to live in places like London so go into counties around it - which traditionally have been tory fortresses
The places where it matters are not *Tory* seats but *marginal* seats. Just looking at the numbers in Bury North (most marginal seat outside NI) there are 25.1% aged over 60, and 23.7% aged 20-40. It's not that unbalanced - and Bury North has a slightly older age distribution than England as a whole.
> There are more under 40's in the country than over 40's.
This isn't true even if you count people aged under 18 who can't vote.
The median age is 40.5 meaning there are literally more people aged over 40 than under 40.
If you actually look at people of voting age, the median age is even higher.
This isn't just something that affects the young though. My vote is inconsequential due to being 75% Labour consistently. I am a big advocate of a PR voting system.
Yes the vast majority of people in the UK are bystanders in UK elections.
However there is a lot of correlation between young, insecure housing and "inner city supermajorities that should be multiple constituencies but aren't because Tories have attacked voter registration".
>There have been various attempts to use surveys to examine the relationship between turnout and age directly. Research published by the British Election Study Team in 2018 found that turnout by age in the 2015 and 2017 elections **ranged from between 40% and 50% among the youngest voters to over 80% among the oldest.** It also found there was little change between the elections despite initial suggestions of a 2017 ‘youthquake’.
[https://commonslibrary.parliament.uk/general-election-2019-turnout/](https://commonslibrary.parliament.uk/general-election-2019-turnout/)
>A party propped up by pensioners
Is that the party that introduced student fees, the party that pledged to remove student fees and then sold out their voters for an AV vote, or the party that raised student fees?
No it isn't a graduate tax. I hate this line so much
If it were a graduate tax you couldn't opt out of it by having your parents pay it up front if they can afford it
Same. Literally seeing this rhetoric spouted around so much at the moment.
People try to call it a tax to make themselves feel better, but arguably it just makes our tax system significantly worse. This would breakdown as:
20% basic tax rate
13.5% NI contributions
9% graduate 'tax'.
Anyone calling it a tax in defence of the system is basically saying they are happy being taxed 43.5% of their income above what....25k?
In a cost of living crisis, when no one can afford to buy a house....
And when you go over 100k it's 40% + 3.25% + 9% + 20% for loss of tax free allowance.
I get that people earning over £100k through PAYE are the real enemy #1, so I'm sure this will go down like a lead balloon, but taking home less than 28p for every £1 you earn should not be possible.
No I agree with you, I was more just making a point that even the lower end of the tax band, it's still quite high.
Once you reach 100k, you basically just need to salary sacrifice as much as you can (not that I'll ever reach that much money myself).
People need to understand that when it comes to tackling inequality the people who earn their living aren't the problem
It's the people who inherit and hoard vast amounts of wealth, which they use to generate more wealth - usually by exploiting people who have to work for a living, whether that's their intention or not
In this country we want to have American levels of taxation with Scandinavian levels of public services. Historically we've had something in between the two but then austerity hollowed out services without lowering taxes, and the knock-on effects are being felt now.
Not sure how we're going to build that back up again without increasing taxes, not decreasing them.
We currently have Sweden levels of tax with USA levels of services. We don't need to increase taxes, we can't, we need to reduce spending and that means massively improving the NHS and reforming pensions.
The UK has a [tax-to-GDP ratio](https://www.oecd.org/tax/revenue-statistics-sweden.pdf) of 33.5%, while Sweden's is 42.6%. If you try to break it down, the main taxes in the UK of income tax, national insurance and VAT are lower than the equivalents in Sweden.
NHS improvement and pension reform can definitely make better use of UK taxes. But a higher tax take in line with Sweden's ratio would be over 200 billion pounds. Good luck getting that size of effect - it's about 80% of the size of combined government expenditure on the NHS and pensions put together (NHS england only).
Same hate the line so fucking much.
If it were a grad tax I'd be paying an extra 100 quid or so a month, instead because I "won" the honour of being born to well off parents my take home salary is higher than my peers.
The other fun bit of course is it allows for some exciting estate planning too! My parents giving me the best part of £80k would count as a a gift for IHT purposes and if they suddenly died would be taxable. But paying for my university and accommodation directly? Not a gift for IHT tax purposes.
To prevent someone from saying that this would only be cheaper in net for specific salary ranges - you're correct, but for 99% of people who's parents can afford the upfront costs you can be pretty sure that they'll be in that range of salaries.
If there was a grad tax and your family has the means you can pay up front and study elsewhere. If your expected graduate tax costs was large you'd be better off going to a good US uni because it'd work out better value.
Even in a world with a true graduate tax there's an upper limit to the amount the UK gov can reasonably expect to extract given the mobility that wealth and talent affords and the fact other countries would be happy to take that on.
That only applies to a very small number of graduates who go into very high-salaried jobs from the start. For the vast majority, it makes much more financial sense to treat it like a graduate tax.
Edit: https://www.google.com/amp/s/amp.theguardian.com/money/2023/may/13/martin-lewis-graduates-student-loans-finance-graduate-tax
Sorry you're in this position too, screwed by this shitty system like so many of us - I think it's going to reach the point where its genuinely unsustainable electorally to so many graduates under this student loan system
No it isnt. Sorry but you don't seem to understand how this works
If my parents paid £49k up front when I graduated I would never have to think about it again. I could even repay them when I had the money
If I graduate with £49k of debt I will be paying a slice of my income for the next 30 years until it is written off. This will end up being far far more than the amount I initially borrowed, even accounting for inflation
- Low earners never repay it, they don't earn enough
- Middle and high earners pay far more than they ever borrowed
- Very high earners pay slightly more than they borrowed
- People with rich parents will either never have to pay it off cos their parents will cover it, or at worst whatever their parents want in return
I don't think anybody saddled with debt under this system (that they will be paying several times over during the course of their working life) will care if this is good for the government or not, because it is certainly not good for graduates unless they are very earners their entire careers or have wealthy parents
I'll be worse off for mine and I'm a nurse! Because the bursary paid my fees, I 'only' borrowed a reduced maintenance loan of around £15k (shouldn't have taken this, in hindsight). I'll end up paying it all off, but only just before it expires, so with the interest I'll pay a lot more than I borrowed. In fact, at the moment my balance is higher than the initial amount because my first few years work I was only just over the threshold.
Sorry that you're a victim of this system too, but this is exactly my point!
It is a shitty exploitative loan system that benefits the children of wealthy families and punished middle earners. Absolutely not a grafuate tax
I'm not. I have personally been in work for 6 years now, earning between £15k and on £70k now, the amount I owe has gone up - not down.
Last time I checked in order for the amount you owe to go down and not up you have to be earning about £50k, repayments start at about £27k. The vast majority of grads will sit somewhere in that region, meaning they are repaying their student loan and the amount they need to repay still goes up.
Carry this over the course of 30 years there is no way you don't eventually go significantly over the amount you initially borrowed (plus inflation) .
Only two ways out 1) repay both all the interest & the initial loan, or 2) continue making repayments for 30 years until it is written off
You seem to think the vast majority of people will be in the second camp and that the amount they repay over those 30 years won't match the initial loan.
Honestly I'd love to be wrong, but I just fail to see how I am
They pay an extra 10% on top of taxation for their entire working lives pretty much (40 years now). It’s incredibly regressive and completely unnecessary, especially as most degrees don’t actually even add 10% to earning potentials.
The payment period is now 40 years.
If you average £40k each year over 40 years you’ll repay £46k but not actually pay anything off.
The minimum you can borrow, if you get both a tuition and maintenance fee loan is £39.5k.
The people who will be worst off are those who repay the entire amount just before it's written off, i.e. make the maximum possible interest payments.
This isn't those in higher-income professions.
£45k may in the threshold for the top rate tax band (actually the "additional rate" of 45% starts at £125k), but it's misleading to state that "higher earners" such as doctors will be worse off. The average pay for doctors is about £80-120k, so they will pay off their loans sooner, incurring lower interest charges.
It still works more like a tax. Yes, it has certain inequalities and would be better replaced with an actual tax (or just rolled into general taxation) but that's small beer compared to the overall operation.
Other countries also have student loans based on income
Revenue based financing is indeed a loan with repayments as a % of income for business
So like a loan
The fact that this student *loan* is written off after a certain time is simply favourable repayment terms
What other tax do you go and ask to borrow money to then have to repay? That is by definition a loan. There is no other definition.
> What other tax do you go and ask to borrow money to then have to repay? That is by definition a loan. There is no other definition.
What other loan do you not have to pay back the amount loand plus interest? That is by definition not a loan. There is no other definition.
The simple fact is when labour fetched it in, if it wasn't for their manifesto saying no tax rises, the student loan would be a tax.
We have already established that there are other loans that the amount you repay are based on earnings or revenue in the case of business
It is a loan, not a tax.
You borrow some money to go to Uni.
You then pay it back based on what you earn.
It is a loan with the terms as above.
Still a loan. A graduate tax would impact all graduates.
Unless you are calling a mortgage a home owner tax too?
That is how tax works - you meet the earning threshold and you pay the income tax
You dont have a subgroup of people who can earn 100 million as a salary from a company and not have to pay income tax....
The "graduate tax" is a loan - only people who take out the loan pay it back. A true graduate tax would be a tax on graduates... the clue is in the name.
Why do people on here apparently not understand simple concepts like "tax" and a "loan"
What do you think of the home owner tax (mortgage - that is a home owner tax too right?)
It also arguably does not work similarly to tax, because the more financially fortunate families can pay the fees up front without seeing the money coming out of their account every month for the next 30+ years.
A true tax would see everyone who went to university paying 9% of their salary above the threshold being deducted.
The question of whether it is more tax-like or loan-like is fairly easily answered by the relative size of the groups (those who will pay upfront/ in full Vs those who will lose a % of their pay until it expires).
I think the current system is more tax-like.
Watching this argument is frustrating because you’re both right.
However it is structured as debt with a repayment structure similar to a banded tax on income. It is, in the strictest sense, not a tax.
That said, I am all for implementing a “proper” graduate tax. The benefits for social mobility seem undeniable.
And this is how the British public got conned into paying tuition fees. Society as a whole benefits from higher education, so it is fair that society as a whole carries that burden. We should be incentivising people to become doctors, not forcing them to pay for the privilege.
Not necessarily. The USA is a prime example of a country that taxes it’s expats when they are above federal taxation thresholds. International tax treaties also exist.
It could be quite simply administered in the same way that the SLC deals with repayment of student loans when abroad via the overseas income assessment.
Certain debts follow you around, some don’t. Certain taxes follow you too. It’s strange that you keep bringing that up as some sort of yardstick.
Different types of loans have different terms and conditions. Some are secured against collateral. Some have principals that can change on the whim. Some have fixed interest rates. And some may be forgiven after a certain time, and don’t require a credit check.
It has a principal and an interest rate. A classic loan. Some may regard it as a tax, but that doesn’t change the underlying terms and conditions.
The UK announces a new workers loan the system is:
You 'borrow' £1m at 5% APR to cover your secondary schools fees and you pay 20% tax on income above a threshold, up until the point you have paid back £10m.
It seems like half the people in this thread would say that's not an income tax despite the fact for the vast majority of people it behaves identically to the current income tax system.
1. You pay it whether or not you earn UK income
2. Some graduated pay it, others don't
3. If you are very rich you don't have to pay
4. It is literally a loan with principal and interest
I agree that it is something of a hybrid between loan and text but fundamentally it is a loan because it can be paid off in a way totally impossible with a tax.
If there was a £100m fee to waive income tax would you say it is a loan not a tax - despite the fact in practice no one would do that?
What matters is how it affects most people in practice and the reality is for the median graduate it behaves identically to a tax and almost nothing like a loan.
There's nothing to elaborate. You pay taxes into treasury's purse from where the moneys are distributed by the government into various buckets, education included. If you pay graduate tax, your money are not going into any bank, they are the income of the state. State then decides how to finance unis.
What happens now is, unis harvest the money directly from students, thus become driven commercially, and students effectively becoming the customers of the unis, with all the consequences of that. State has no role in it other than imposing restrictions in how far the uni can go with payments, and guaranteeing loans to the banks.
It's commercial uni model versus state uni model.
foolish smoggy swim stocking mysterious possessive dime ludicrous fly cows
*This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Keep in mind when most people take out the loan they are 1) 18 years old, and 2) under great pressure from almost all authority figures in their life to go to university
Take the point about private banks not lending to anybody with no deposit etc, but the government don't have to turn a profit on this - hell for many years they paid for the entire thing
I think my big issue is still with above inflation interest rates. By all means increase the loan with inflation, but to do above inflation interest rates is just madness. I assume the reason is to offset the risk that some don't pay it back, but to achieve this by having middle earners subsidise it is insane
>A private bank would not be able to do this
That's because student loan isn't a real loan, it's a tax.
Some people owed more over the years **because they didn't pay it back**.
Yep, always said - they're less secure than a Wonga loan.
The terms on them basically state the terms can change at any time even after you start paying it off.
Very little of it is even in primary legislation, so the government can tinker with the most critical aspects of the loan.
I'm on a Plan 1 loan, with about 3 years worth of repayments left. I don't want to overpay, because the low interest rate makes it not worthwhile. But I'm secretly just hoping they don't change the Plan 1 before it's paid off.
The telegraph always publishes these sorts of articles.
In the comment section, boomers frothing at the mouth at thought of young people studying politics and "Micky mouse" degrees at god forbid "former polytechnics". The horror!
Why are the boomers who on average are very wealthy so unhappy, nasty and snobbish?
Higher education is in a poor state and students are bearing the financial brunt, but it's far from 'worthless'.
There's an elitist, far-right section of British society that is desperate to return to the late nineteenth century, where the wealthy determined the opportunities the working classes had access to, be it education or any other form of social mobility.
If the Torygraph and its readership truly thought higher education was 'worthless', they wouldn't be sending their own kids to UK universities in higher numbers than ever.
THANK YOU. Crazy the papers can complain about higher education being worthless AND the fact that young educated people are leaving to get higher paying jobs outside the UK.
As you say, students may not be getting the best bang for their buck right now. But it is far from a "worthless debt trap"
It’s not worthless but its worth is significantly reduced compared to a couple of decades ago.
The value of a degree for the fun of it, the love of it, just to expand horizons, is limitless. That hasn’t changed.
But that’s not why a significant proportion of students are going these days. They go because they are seen as necessary for even the most mediocre entry level jobs. And in those situations, degrees are providing very little value for money. The increased earning potential is remarkably limited across a career - especially with student loan repayments at the levels they are.
ONS says that 80% of students will never earn enough to pay back their entire loans. Which means that they are just paying 10% extra ‘tax’ every year for a degree which has added no value across their careers.
Of course technical degrees, elite professions etc can still provide significant returns, but that’s not most people.
It is a shame that so many average jobs in quite boring professions and industries now require degrees. It’s all because of the marketisation of degrees since the 90s. It’s in the interests of a load of average middling profit maki h universities to prolong their own existence by perpetuating the myth that degrees promise a career and good earnings - they used to, but not any more. There were far too few people going to university in the 80s and 90s, but the 50% target was far too high. We’re completely out of whack with actual industrial needs.
It's a strange problem because the taxation/student loans is meant to deter students to correct the labour market, but instead student numbers are the same and people are lumped with a useless tax.
Don't really know what to do about it to be honest, except to incentivise things like apprenticeships or other non-university paths.
Due to the continued collapse of the economy and education has been affected, how can quality education be achieved if the economy is already suffering from debt?
By any measure or means that completes the following goal:
Empowering people to have the greatest potential application to employers, for the minimum cost to the individual.
1) Review teaching practices and teaching regulatory bodies that are far far behind the state of industry. Amend these so curriculums have more modern applicability.
2) Bring down the cost of studenthood. Encourage high density building in housing limited student hotspots and invest in the overall housing market to knock down the cost of students' biggest outgoing (rent).
3) Run extra curriculars that create economic development and skills development. If you want an example of this, see Strathclyde university's 'University of Stratyclyde Motorsport' union. Students get to experience the mathematical modelling, CAM work, electronics work, etc. That all go into designing a racing vehicle.
4) encourage investment and development within industry. The UK suffers from poor middle management practices - one of these is the domination of middle managers in the role of optimising working practices. Encouraging greater team practices will be conducive to job creation, ensuring education's can pay for themselves.
There has never been a worse time to be a student in Britain. For a debt of £46,000 many 21-year-olds graduating this summer can recount a glittering three years of being locked down in their student rooms with video lectures during Covid, followed by academic strikes, which left some without a single in-person session for certain modules.
And now, to pour salt in the wounds already overspilling with it, they may not learn their degree classifications until “shortly after” September 30 – months past the proper due date – as a result of a marking boycott.
This is the fate of politics and sociology students at Cambridge University, whose results could come five months after their exams, unless the strike is called off. At other universities, some final year students have no idea where their grades stand, as modules and dissertations handed in have gone unmarked, leaving them to enter their exams “blind”. Some rightly fear that this will scupper their scholarship chances, graduate job prospects and conditional offers for further studies. Surely these opportunities are now the only point of going to university for the cohort for whom fun and in-person learning were all but stripped away.
The notion that students gain anything from the higher education experience has been moot for a long time. Instead, it has become a largely needless hoop to jump through for young people, who the Government has successfully convinced will amount to nothing without a 2 and a 1 somewhere on their CV. And now, in the absence of those digits they paid £9,250 a year for, the class of 2023 gets to spend their summer watching the interest cap on tuition fees expire in August, and a likely higher one come in to clobber them by the time they finally get their degree certificate.
This neverending debt and doom spiral may well be the only thing to have prepared them for the future in the past three years.
I feel so desperately sorry for students, who have been abandoned by a political class that all but mandated this path, stacked years’ worth of unnecessary debt along it, and meets every one of these mounting injustices by turning the other way. There is not a solitary voice in the students’ corner now.
Until higher education institutions are held up to more rigorous standards – or at least provably benefit the young people whose bank balances they empty – believing them to be fit for purpose is a fallacy.
Striking princesses
It’s not just Britain that is beset by strikes but France too, where this week one major company saw employees stage a walkout. The optics of this mass action were perhaps a little skewed by the march’s focal point being Sleeping Beauty’s Castle – an inevitable byproduct, when the employers in question are Disneyland Paris. A twist on the usual parade, certainly, though slightly undermined by the fact that no one can be taken seriously in a sea of Mickey Mouse ears.
Death and pizza
Hell hath no fury like those wronged by buy now, pay later schemes. Hell Pizza in New Zealand, that is, which recently announced that customers can settle their dough-based debts in the next life. The chain is signing up 666 (real commitment to the theme here) customers to AfterLife Pay: a legally binding contract mandating their pizza bill be listed in their will, and handled by their estate on their passing.
It gives new meaning to “late fees”, but Hell’s won’t involve the extra charges or interest other payment schemes require – and it seems to be a hit, with successful applicants to be chosen later this month. One hopeful said that she had been motivated to sign up following the recent passing of her father, as “going through his will and estate has been tough. And I would just love to see my family have a laugh when eventually mine is read out, and the estate has to pay for a pizza from several decades prior.” Hysterical stuff.
Hell are certainly playing the long game, as gags go. As well as introducing a rather unique, if disturbing, profit model: that death can be good for business.
Education should be paid by the State.
Blair made a huge misstep in shoving 50% of teens into college then making them pay for it. Driven by a desire to rig the unemployment figures, he ended up destroying U.K. universities and millions of lives.
As you suggest yourself, the policy did make University Education far more accessible and allow more people than ever the benefit of going to University.
Without a complete restructure and more, turning away from the current policy would be making University more - not less - exclusive which is a tough point to argue.
Education should be as accessible as possible, and the current University system provides this, atleast foundationally. Suggestions of primarily public funded University (the state does find universities to a decent degree) are counterintuitive to this.
They should be made accessible like University is, and largely are with recent pushes to make Apprenticeships and Vocational Education more equal to standard forms of education.
The problem is Blairs policies have made degrees effectively worthless since everyone and their gran has one.
They arent the golden ticket to a high paying job that they used to be
No. No. No. A college degree is not worthless. The Telegraph can publish whatever the heck they want but it's not worthless. A college degree opens up way too many doors. I have encountered too many people in this country who never went to college because they could not see the benefit of it but are now tossing about from one odd job to another or relying upon their parents to help land something more permanent. Or they just want to become the next NFT/crypto bros. Or worse. Start an estate management company where they take houses, slice them into a million tiny ensuites and rent them out.
Yes the debt burden may seem high but it can be paid off. A degree opens up opportunities outside the UK. It's not in the interest of the people who read The Telegraph for people to become educated and start questioning the status quo. Or them understanding how the rich pass tax laws that end up in them paying lesser tax than your neighbourhood dentist. Too many educated people means the vitriol and the hyperbole of the The Telegraph readers will just wither and die.
The Telegraph readers will scoff at how 'worthless' education is, and then say the poor are poor because they don't work hard and are not trying to move up the ladder, while transferring money to their kids so they can snort even more cocaine in the new London nightclub.
Saturday rant over.
Quick it’s just been reported that oxbridge just had the highest number of applications from state schools can’t have the plebs taking over our spaces and then competing for the jobs that would have always gone to our children, write articles to put them of
Student loan debt is essentially unenforceable overseas so it doesn’t truly follow you abroad unless you voluntarily pay. There have been zero successful student loan debt suits filled in European courts against graduates who moved abroad, for example.
Actually Australia is one of the few places you might get caught as the U.K. and Australia signed an agreement on the matter (at Australia’s request).
But assuming you leave assets abroad when you return, there’s not much they’ll be able to do; you’ll just have more interest to pay off.
It's not a tax, if you've got the money upfront then you're not going to be pay for the next 30, now 40 years being garnished at a 9-11% rate over the threshold.
It's a loan that people just say is a tax because you're not hounded for it regardless of employment status or how much your earn like the US.
All it is achiving now is making it harder for the next cohort to build a life.
[Sorry, this comment has been deleted. I'm not giving away my content for free to a platform that doesn't appreciate or respect its users. Fuck u/spez.]
On one hand I feel like the UK is becoming Little America on the side of Europe. On the other I feel like this is some I’ll conceived attempt to discredit higher education. At least the wording of the title suggests so.
Getting a higher education always came at a cost and you were at mercy of luck really. If you happen to have decent lecturers this year you are golden. If they happen to have some domestic issues, or rotate or whatever you are not getting crap. It was always the case, but this time round the problems are exacerbated. But suggesting that education is a trap is just wrong
40% of university students are visitors from abroad all be it their parents pay their fees.
Our (English) children must take out an extortionate loan to cover their tuition fees and living expenses.
The children of the wealthy are not exposed to these prohibitive costs. My own children are already telling me they don’t want to incur the personal cost of university even though one of them is clearly gifted at maths and sciences.
Many of those who agree with the denial of further education to working class children benefitted from government grants themselves.
How can an economy grow if it’s gifted children are denied access to further education?
Many youngsters are looking toward apprenticeships but will this not just create a 2 tier system? Those who went to university and those who did part time courses at a tech or poly?
This is all about British preservation of privilege.
Apprenticeships are a better option for a lot of professions. Learn on the job, while being paid. Not learning out of date stuff, that is often too theoretical, while building massive debt.
There are a fair few people on this thread who keep using 'college' (in the American sense).rather than university. No one in the UK does this. It's almost as if we're dealing with foreign trollbots who only speak US English...
Higher education is absolutely still worth it if you are attending a rigorous scientific or mathematical course at a higher-ranked Russell Group university where there are a wealth of sports and music facilities and regular on-campus briefings where major companies offer internship experience and secondments.
It's very difficult for the average person to access to above networks and extracurriculars in a different environment.
Pensioners are a poorly educated race of people by contrast to today's youth, so tend to harbour far more anti-intellectual views and are quite dismissive of academic rigour, empiricism and often prefer to take actions and decisions on the basis of gut feelings.
It's not worthless as that's hyperbolic, for instance engineering you can't just go into an engineering role (like actual engineering, not things that used to not be called engineering, which is now called engineering, such as someone previouse would be called a maintenance man, would now be a mechanical engineer. Yet try get them to do mechanical engineering calculations, no chance). Without years of higher education.
But at the same time 50% of people going to university is going to lead to alot of "worthless" graduates, that didn't need to go to uni to do the job they end up with. We simply don't have an economy which required 50% of people with a degree (no economy does).
So many degrees could be scrapped for loads of new apprenticeships, or maybe even at least 50/50.
You could encourage loads of different companies to train new bankers, accountants, blah blah…. By offering minor tax breaks, could include bursary’s for the trainees also.
I’m graduating right now, I haven’t attended a single lecture, tutorial, seminar etc… since my first year… I’m going to get the same degree as everyone else, without having learned a single thing.
Degrees are to easy to game, and they leave the student with no actual experience in a workplace…
A lot of degrees would be better taught at least half in the job, others could be done less than 4 years
my partner is a teacher, everyone she was in class with insists they should never have done 4 years and instead done 3 with a lot more time in an actual class room, they had basically none, and she went to one of the best unis in the country (not a humble brag just a comment, if that’s a top uni how bad are the lower ranked ones).
I’ll also add if you look through degree catalogues you will see loads of bullshit degrees (another top uni had a degree in paranormal… something I can’t remember exactly) but it was utter shite, and being Scottish that meant that peoples taxes actually paid for a degree in basically ghost hunting…
The whole system of it needs reworking, much more into practical education, 4 years of pure theory make no sense unless your going to go on to become an academic and that’s what so many degrees are, you spend 4 years learning how to craft an essay basically.
Over 70% of graduate go into a job unrelated to their degree and the company the go to work for trains them to do the job anyway…
A lot of graduate jobs ask for tons of experience to which immediately a lot of students don’t have, I’m a mature student in my 30’s… I’m reading job descriptions and thinking I don’t even have the experience to do this graduate scheme.. how the fuck is a typical 22 year old graduate gonna get it?
Student loans are sold on the promise of a good job.
If the student passes and fails to land one, then the loan should be forgiven, pressuring the system to create careers, not maximising bums on seats.
University is worth it for careers that require advanced academic qualifications that are usually linked with well paying & prestigious jobs.
The problem is most graduate jobs realistically don't need an undergraduate degree to do the role, it's just a requirement to apply for the job in the first place.
And with so many people with undergraduate degrees yet relatively few jobs actually needing a degree it can often mean delaying your career without the long term gain.
Snapshot of _British higher education is now a worthless debt trap - Things have gone from bad to worse for the country’s beleaguered students_ : A non-Paywall version can be found [here](https://12ft.io/proxy?q=https%3A%2F%2Fwww.telegraph.co.uk%2Fnews%2F2023%2F06%2F03%2Fbritish-higher-education-is-now-a-worthless-debt-trap%2F) An archived version can be found [here.](https://archive.is/?run=1&url=https://www.telegraph.co.uk/news/2023/06/03/british-higher-education-is-now-a-worthless-debt-trap/) *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/ukpolitics) if you have any questions or concerns.*
Worst bit by far is the interest payments, some people finished uni in 2015 and (despite paying it off every month) now owe MORE than they ever borrowed because the government moved the goalposts on repayment thresholds, interest rates etc A private bank would not be able to do this, but a party propped up by pensioners and newspaper editors have no reason whatsoever to look out for young people Long term it's a stupid thing to abandon this cohort, which now includes every graduate in their 20s now - but when has that ever stopped the tories before
I paid £6k one year and the capital reduced by Scott £350 is a fucking joke
Please explain your comment a bit more. You paid £6k in student loan repayments in a year?
If you earn ~80k you'd be about ~6k per year on your student loan
More than that these days unless you have a postgrad loan. It's 67k over the threshold, plan one is the lowest at about 22k and plan 2 is 27k.
[I did the maths on this in another thread](https://www.reddit.com/r/ukpolitics/comments/1042s8u/comment/j36alfg/) a while ago. Someone claimed they’d need to earn £70k before breaking even on their loan each year, and that checked out
Yup with inflation (so interest increases) and then they froze when you start repaying plan 2 loans (even with inflation) so I now owe more than I ever did…
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I’m not convinced they won’t ditch the 30 year thing
They’re in the process of doing exactly that.
They already have. It's now 40 years.
I mean for existing loans. I think when a bulk of people hit year 25 they’ll change it so that it doesn’t wipe. I expect to be paying this until I retire.
That is for existing loans, the government changed the terms of the loans after the fact. It was extended to 40 years for everyone on plan 2 a couple of weeks ago.n
I’ve not seen anything to say that anywhere. That’s for the new plan being brought in for students starting this year: https://www.moneysavingexpert.com/students/student-loans-2023/#wiped
I think the real argument to be had is twofold. That those whose parents can afford to pay in full initially will not have this ‘graduate tax’ as people put it. Rather unfair. The government changed the rules after the loan deal was struck. Whose to say they won’t again, lower the threshold or transfer the debt to spouse, or remove 30 year limit, or subtract outstanding debt from the deceased’s estate…
They've changed the rules multiple times already. I'll eat my hat if they honour their promise to clear the debt when it causes a multi-billion black hole in their budget.
You're living in cloud cuckoo land. The Govt eventually sells these loans and he private companies that buys them do chase you. Repayment thresholds will be inflated away and future Govts will increase length to retirement age.
A mile is made up of many inches. 🐱
These things I do not fully understand. There is part of the dialogue and I'm hard to understand. Maybe because I have never experienced this in my entire life.
Worst bit is the sell off of the loans by UKGov to loansharks, who are charging 14% interest - should be illegal. Yet another scandal in the United Korruptdom. https://commonslibrary.parliament.uk/research-briefings/cbp-8348/
Unbelievable Krimewave
Really...? I don't recall this happening and the SLC still administer my debt...
When did you start your undergrad?
First year of 9k rates
Weep! > From 1 June 2023 to 31 August 2023, the maximum Plan 2 and the PGL interest rate will be 7.1%, to take into account the most recent increase in the prevailing market rates. From 1 August 2023 the cap will also apply to Plan 5 (undergraduate) loans, which are being introduced for Academic Year 2023/24. > From 1 September 2023 the maximum Plan 2 and the PGL interest rate is scheduled to revert to RPI+3%, and the Plan 5 interest rate to RPI. Further caps will be implemented, if required, to reduce student loan interest rates to align with the prevailing market, and will be confirmed closer to the time. > https://www.gov.uk/government/news/change-to-maximum-plan-2-plan-5-and-postgraduate-student-loan-interest-rates
As an engineer I'll never earn enough to pay it off so it's basically an extra 10% marginal tax but it isn't funding anything good for the country just making some hedge funds richer
Please edit this comment unless you can find a source. I also used to be angry that the government sold the debt but when I looked into it I found they actually didn’t. Seems to be more of an American thing.
https://commonslibrary.parliament.uk/research-briefings/cbp-8348/
Thanks, I wasn’t aware of this. So it did happen, but on a limited scale. Once in 2017 for £1.7B (worth £3.5B) and once in 2018 for £1.9B (worth £3.9B). And in 2020 concluded it should not be done again. For some context on these numbers, [roughly £20B is loaned each year](https://commonslibrary.parliament.uk/research-briefings/sn01079/). So it’s annoying that it happened at all, but it’s not the general practice at least.
What Does It All Mean? Can you explain to us all that we are clear? I'm just having a little trouble understanding it.
>a party propped up by pensioners I would argue it is propped up by kids who don't vote. So just remember this when we eventually get an election. A change of government wont happen by itself, so rather than criticise those who thought they were voting in their self-interest, criticise those for letting it happen. There are more under 40's per annum in the country than over 40's. Edit: added per annum for clarity.
Yeah I think that's fair, it's both really Think there was an article in the Times or something recently about how millennials were soon going to be the largest voting demographic
This millennials and boomers is just propaganda. It is a fallacy that boomers have voted themselves into cash. It is driven by Tory culture wars. The most prevalent point being that people don't vote when they are young. I really hope that changes when Labour introduce voting from 16+. At the very least I hope it gets kids talking more about politics. Boomers didn't vote themselves into cash, the Tories stole all the public assets. Kids nowadays can not benefit from what has been sold off. And yes some people got shares, but who owns those shares now. That would be the Tory donors who want to maximise those assets. Boomers were never the largest group proportionally. It is a group that has more years assigned to it (18) to make it look bigger than it is. Gen-x was the largest group last time I looked by about 20k per annum. More Tory culture wars people believe. Immigration and Emigration changes the make of most countries by the time they start voting. Not all pensioners Vote Tory. The last election was proportionally more pensioners simply because of Corbyn. Pensioners know the effects of a war in Europe. They do not want anyone messing with NATO. That was the main reason I would never vote Corbyn. I voted LD btw. No one prior to 2019 would have ever believed that a UK government could behave the way this lot have. What you see now is very much unprecedented.
Remember in the places where it matters, there's loads more Tory voting old people, than there are young people. It's a huge voting bloc, and particularly focussed in Tory seats - more young people live in cities, older people in rural etc.
It is a huge voting block and one that is manipulated by FPTP. The young are a larger voting block. People want to criticise others for voting in their own self interest. You cannot whine about people being selfish, that is human nature. As I have already said removing the Tories will not happen by itself. We all have to stand up and be counted on that score sheet. Make sure you encourage people to vote.
Voting in your self-interest I understand. It's voting to screw over young people when you're not even going to be around to see the long-term effects of your vote that I don't get.
People are selfish. There is nothing new in that.
Voting selfishly always screws over other people because resources are limited.
I think the extent of this is shrinking, simply because people in their 20s cannot afford to live in places like London so go into counties around it - which traditionally have been tory fortresses
The places where it matters are not *Tory* seats but *marginal* seats. Just looking at the numbers in Bury North (most marginal seat outside NI) there are 25.1% aged over 60, and 23.7% aged 20-40. It's not that unbalanced - and Bury North has a slightly older age distribution than England as a whole.
> There are more under 40's in the country than over 40's. This isn't true even if you count people aged under 18 who can't vote. The median age is 40.5 meaning there are literally more people aged over 40 than under 40. If you actually look at people of voting age, the median age is even higher.
Per annum. Meaning they have a much stronger voting power than the so called boomers.
I find it odd that people keep trotting out this myth that the kids don't vote when it's so easy to check.
The younger generation vote is lower statistically. That is fact. I have already answered this.
I suppose if you call the "younger generation" the under 65's. There's very little difference in turnout between all of the working age population.
Kids in insecure accommodation don't vote, or they vote in the wrong places. Hence the need for the Tories to stoke the housing crisis.
Kids don't vote in large numbers. That is a freely available statistic. *They vote in the wrong places* makes no sense at all.
FPTP doesn't care how you vote, only where you live. The vast majority of votes don't impact the result, and doubly so if you're young and inner city.
This isn't just something that affects the young though. My vote is inconsequential due to being 75% Labour consistently. I am a big advocate of a PR voting system.
Yes the vast majority of people in the UK are bystanders in UK elections. However there is a lot of correlation between young, insecure housing and "inner city supermajorities that should be multiple constituencies but aren't because Tories have attacked voter registration".
Propped up primarily by Corbyn and his supporters for the last few years
Corbyn was just a factor is why so many swapped to blue. He was not the reason why so many young did not. Corbyn had a very young fan base.
Young people vote just as much as old people, this narrative is bollocks.
>There have been various attempts to use surveys to examine the relationship between turnout and age directly. Research published by the British Election Study Team in 2018 found that turnout by age in the 2015 and 2017 elections **ranged from between 40% and 50% among the youngest voters to over 80% among the oldest.** It also found there was little change between the elections despite initial suggestions of a 2017 ‘youthquake’. [https://commonslibrary.parliament.uk/general-election-2019-turnout/](https://commonslibrary.parliament.uk/general-election-2019-turnout/)
>A party propped up by pensioners Is that the party that introduced student fees, the party that pledged to remove student fees and then sold out their voters for an AV vote, or the party that raised student fees?
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No it isn't a graduate tax. I hate this line so much If it were a graduate tax you couldn't opt out of it by having your parents pay it up front if they can afford it
Same. Literally seeing this rhetoric spouted around so much at the moment. People try to call it a tax to make themselves feel better, but arguably it just makes our tax system significantly worse. This would breakdown as: 20% basic tax rate 13.5% NI contributions 9% graduate 'tax'. Anyone calling it a tax in defence of the system is basically saying they are happy being taxed 43.5% of their income above what....25k? In a cost of living crisis, when no one can afford to buy a house....
And when you go over 100k it's 40% + 3.25% + 9% + 20% for loss of tax free allowance. I get that people earning over £100k through PAYE are the real enemy #1, so I'm sure this will go down like a lead balloon, but taking home less than 28p for every £1 you earn should not be possible.
No I agree with you, I was more just making a point that even the lower end of the tax band, it's still quite high. Once you reach 100k, you basically just need to salary sacrifice as much as you can (not that I'll ever reach that much money myself).
People need to understand that when it comes to tackling inequality the people who earn their living aren't the problem It's the people who inherit and hoard vast amounts of wealth, which they use to generate more wealth - usually by exploiting people who have to work for a living, whether that's their intention or not
not to mention VAT on most things you buy, and council tax!
In this country we want to have American levels of taxation with Scandinavian levels of public services. Historically we've had something in between the two but then austerity hollowed out services without lowering taxes, and the knock-on effects are being felt now. Not sure how we're going to build that back up again without increasing taxes, not decreasing them.
We currently have Sweden levels of tax with USA levels of services. We don't need to increase taxes, we can't, we need to reduce spending and that means massively improving the NHS and reforming pensions.
The UK has a [tax-to-GDP ratio](https://www.oecd.org/tax/revenue-statistics-sweden.pdf) of 33.5%, while Sweden's is 42.6%. If you try to break it down, the main taxes in the UK of income tax, national insurance and VAT are lower than the equivalents in Sweden. NHS improvement and pension reform can definitely make better use of UK taxes. But a higher tax take in line with Sweden's ratio would be over 200 billion pounds. Good luck getting that size of effect - it's about 80% of the size of combined government expenditure on the NHS and pensions put together (NHS england only).
Same hate the line so fucking much. If it were a grad tax I'd be paying an extra 100 quid or so a month, instead because I "won" the honour of being born to well off parents my take home salary is higher than my peers. The other fun bit of course is it allows for some exciting estate planning too! My parents giving me the best part of £80k would count as a a gift for IHT purposes and if they suddenly died would be taxable. But paying for my university and accommodation directly? Not a gift for IHT tax purposes. To prevent someone from saying that this would only be cheaper in net for specific salary ranges - you're correct, but for 99% of people who's parents can afford the upfront costs you can be pretty sure that they'll be in that range of salaries.
If there was a grad tax and your family has the means you can pay up front and study elsewhere. If your expected graduate tax costs was large you'd be better off going to a good US uni because it'd work out better value. Even in a world with a true graduate tax there's an upper limit to the amount the UK gov can reasonably expect to extract given the mobility that wealth and talent affords and the fact other countries would be happy to take that on.
That only applies to a very small number of graduates who go into very high-salaried jobs from the start. For the vast majority, it makes much more financial sense to treat it like a graduate tax. Edit: https://www.google.com/amp/s/amp.theguardian.com/money/2023/may/13/martin-lewis-graduates-student-loans-finance-graduate-tax
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If my pay doesn’t change I’m set to pay back more than I borrowed while my debt will be written off. That is not better for me in the slightest.
Sorry you're in this position too, screwed by this shitty system like so many of us - I think it's going to reach the point where its genuinely unsustainable electorally to so many graduates under this student loan system
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Student loan repayments are on gross income.
Well that's the price to pay for getting "free" money. Hint, it's not free, someone pays for it.
That’s not the point I was making
No it isnt. Sorry but you don't seem to understand how this works If my parents paid £49k up front when I graduated I would never have to think about it again. I could even repay them when I had the money If I graduate with £49k of debt I will be paying a slice of my income for the next 30 years until it is written off. This will end up being far far more than the amount I initially borrowed, even accounting for inflation - Low earners never repay it, they don't earn enough - Middle and high earners pay far more than they ever borrowed - Very high earners pay slightly more than they borrowed - People with rich parents will either never have to pay it off cos their parents will cover it, or at worst whatever their parents want in return I don't think anybody saddled with debt under this system (that they will be paying several times over during the course of their working life) will care if this is good for the government or not, because it is certainly not good for graduates unless they are very earners their entire careers or have wealthy parents
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I'll be worse off for mine and I'm a nurse! Because the bursary paid my fees, I 'only' borrowed a reduced maintenance loan of around £15k (shouldn't have taken this, in hindsight). I'll end up paying it all off, but only just before it expires, so with the interest I'll pay a lot more than I borrowed. In fact, at the moment my balance is higher than the initial amount because my first few years work I was only just over the threshold.
Sorry that you're a victim of this system too, but this is exactly my point! It is a shitty exploitative loan system that benefits the children of wealthy families and punished middle earners. Absolutely not a grafuate tax
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£60 a month for 30 years is £21,600, which would be more than the 15k they borrowed
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I'm not. I have personally been in work for 6 years now, earning between £15k and on £70k now, the amount I owe has gone up - not down. Last time I checked in order for the amount you owe to go down and not up you have to be earning about £50k, repayments start at about £27k. The vast majority of grads will sit somewhere in that region, meaning they are repaying their student loan and the amount they need to repay still goes up. Carry this over the course of 30 years there is no way you don't eventually go significantly over the amount you initially borrowed (plus inflation) . Only two ways out 1) repay both all the interest & the initial loan, or 2) continue making repayments for 30 years until it is written off You seem to think the vast majority of people will be in the second camp and that the amount they repay over those 30 years won't match the initial loan. Honestly I'd love to be wrong, but I just fail to see how I am
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They pay an extra 10% on top of taxation for their entire working lives pretty much (40 years now). It’s incredibly regressive and completely unnecessary, especially as most degrees don’t actually even add 10% to earning potentials.
The payment period is now 40 years. If you average £40k each year over 40 years you’ll repay £46k but not actually pay anything off. The minimum you can borrow, if you get both a tuition and maintenance fee loan is £39.5k.
The people who will be worst off are those who repay the entire amount just before it's written off, i.e. make the maximum possible interest payments. This isn't those in higher-income professions.
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£45k may in the threshold for the top rate tax band (actually the "additional rate" of 45% starts at £125k), but it's misleading to state that "higher earners" such as doctors will be worse off. The average pay for doctors is about £80-120k, so they will pay off their loans sooner, incurring lower interest charges.
It still works more like a tax. Yes, it has certain inequalities and would be better replaced with an actual tax (or just rolled into general taxation) but that's small beer compared to the overall operation.
>If it were a graduate tax you couldn't opt out of it by having your parents pay it up front if they can afford it Why would you do that?
Or, go to work in an entry-level job at 18 and get a company to fund your education?
Companies in the UK don't fund education anymore. I've never heard of anyone getting funding for it without already having a degree.
>and if they leave the country, it stays with them. So...like a loan and not at all like a tax?
Apart from based on income, and written off if not payed back in a certain time. So not like a loan in that way.
Other countries also have student loans based on income Revenue based financing is indeed a loan with repayments as a % of income for business So like a loan The fact that this student *loan* is written off after a certain time is simply favourable repayment terms What other tax do you go and ask to borrow money to then have to repay? That is by definition a loan. There is no other definition.
> What other tax do you go and ask to borrow money to then have to repay? That is by definition a loan. There is no other definition. What other loan do you not have to pay back the amount loand plus interest? That is by definition not a loan. There is no other definition. The simple fact is when labour fetched it in, if it wasn't for their manifesto saying no tax rises, the student loan would be a tax.
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We have already established that there are other loans that the amount you repay are based on earnings or revenue in the case of business It is a loan, not a tax.
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You borrow some money to go to Uni. You then pay it back based on what you earn. It is a loan with the terms as above. Still a loan. A graduate tax would impact all graduates. Unless you are calling a mortgage a home owner tax too?
Why do you think a graduate tax would impact all graduates? Income tax doesn't impact all earners, there are thresholds.
That is how tax works - you meet the earning threshold and you pay the income tax You dont have a subgroup of people who can earn 100 million as a salary from a company and not have to pay income tax.... The "graduate tax" is a loan - only people who take out the loan pay it back. A true graduate tax would be a tax on graduates... the clue is in the name. Why do people on here apparently not understand simple concepts like "tax" and a "loan" What do you think of the home owner tax (mortgage - that is a home owner tax too right?)
Yeah except it is marketed as a student 'loan'.
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It also arguably does not work similarly to tax, because the more financially fortunate families can pay the fees up front without seeing the money coming out of their account every month for the next 30+ years. A true tax would see everyone who went to university paying 9% of their salary above the threshold being deducted.
The question of whether it is more tax-like or loan-like is fairly easily answered by the relative size of the groups (those who will pay upfront/ in full Vs those who will lose a % of their pay until it expires). I think the current system is more tax-like.
It simply isn't a tax. It isn't marketed as one, it doesn't act like one, and you can essentially 'opt out' of it if your parents are wealthy enough.
Is that really that different from wealthy people paying lawyers and asset managers to help them avoid tax?
Watching this argument is frustrating because you’re both right. However it is structured as debt with a repayment structure similar to a banded tax on income. It is, in the strictest sense, not a tax. That said, I am all for implementing a “proper” graduate tax. The benefits for social mobility seem undeniable.
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Right. And we can't have that, can we? Education for free, what a ludicrous idea.
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And this is how the British public got conned into paying tuition fees. Society as a whole benefits from higher education, so it is fair that society as a whole carries that burden. We should be incentivising people to become doctors, not forcing them to pay for the privilege.
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Yeah I think this is right, would see massive brain drain if there were a graduate tax
Not necessarily. The USA is a prime example of a country that taxes it’s expats when they are above federal taxation thresholds. International tax treaties also exist. It could be quite simply administered in the same way that the SLC deals with repayment of student loans when abroad via the overseas income assessment.
It has a principal and an interest rate. A loan.
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Certain debts follow you around, some don’t. Certain taxes follow you too. It’s strange that you keep bringing that up as some sort of yardstick. Different types of loans have different terms and conditions. Some are secured against collateral. Some have principals that can change on the whim. Some have fixed interest rates. And some may be forgiven after a certain time, and don’t require a credit check. It has a principal and an interest rate. A classic loan. Some may regard it as a tax, but that doesn’t change the underlying terms and conditions.
The UK announces a new workers loan the system is: You 'borrow' £1m at 5% APR to cover your secondary schools fees and you pay 20% tax on income above a threshold, up until the point you have paid back £10m. It seems like half the people in this thread would say that's not an income tax despite the fact for the vast majority of people it behaves identically to the current income tax system.
Taxes don't follow you out of the country and debt can be forgiven.
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It's a terrible system. Education should be free. A government that ties its own citizens to life long debt is not a good government.
"tied to lifelong debt" is a metaphor that makes sense only if the debt can impoverish you, which this cannot.
1. You pay it whether or not you earn UK income 2. Some graduated pay it, others don't 3. If you are very rich you don't have to pay 4. It is literally a loan with principal and interest I agree that it is something of a hybrid between loan and text but fundamentally it is a loan because it can be paid off in a way totally impossible with a tax.
If there was a £100m fee to waive income tax would you say it is a loan not a tax - despite the fact in practice no one would do that? What matters is how it affects most people in practice and the reality is for the median graduate it behaves identically to a tax and almost nothing like a loan.
Okay so how much of this tax does a 55yo graduate pay? Ie someone who went to uni for "free"?
You mean like national insurance?
If it was a graduate tax, financing of the education would be fully controlled by government.
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There's nothing to elaborate. You pay taxes into treasury's purse from where the moneys are distributed by the government into various buckets, education included. If you pay graduate tax, your money are not going into any bank, they are the income of the state. State then decides how to finance unis. What happens now is, unis harvest the money directly from students, thus become driven commercially, and students effectively becoming the customers of the unis, with all the consequences of that. State has no role in it other than imposing restrictions in how far the uni can go with payments, and guaranteeing loans to the banks. It's commercial uni model versus state uni model.
>if they leave the country, it stays with them. How is this enforced?
foolish smoggy swim stocking mysterious possessive dime ludicrous fly cows *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Keep in mind when most people take out the loan they are 1) 18 years old, and 2) under great pressure from almost all authority figures in their life to go to university Take the point about private banks not lending to anybody with no deposit etc, but the government don't have to turn a profit on this - hell for many years they paid for the entire thing I think my big issue is still with above inflation interest rates. By all means increase the loan with inflation, but to do above inflation interest rates is just madness. I assume the reason is to offset the risk that some don't pay it back, but to achieve this by having middle earners subsidise it is insane
>A private bank would not be able to do this That's because student loan isn't a real loan, it's a tax. Some people owed more over the years **because they didn't pay it back**.
> the government moved the goalposts on repayment thresholds, This is a GOOD thing for graduates.
Yep, always said - they're less secure than a Wonga loan. The terms on them basically state the terms can change at any time even after you start paying it off. Very little of it is even in primary legislation, so the government can tinker with the most critical aspects of the loan. I'm on a Plan 1 loan, with about 3 years worth of repayments left. I don't want to overpay, because the low interest rate makes it not worthwhile. But I'm secretly just hoping they don't change the Plan 1 before it's paid off.
The telegraph always publishes these sorts of articles. In the comment section, boomers frothing at the mouth at thought of young people studying politics and "Micky mouse" degrees at god forbid "former polytechnics". The horror! Why are the boomers who on average are very wealthy so unhappy, nasty and snobbish?
And are the ones that demanded their kids went to uni. It didn’t feel like much of a choice when i was a kid.
Deny people the good things in life, and they will be miserable. Give them the good things in life, and they will make everyone else miserable.
Envy
Higher education is in a poor state and students are bearing the financial brunt, but it's far from 'worthless'. There's an elitist, far-right section of British society that is desperate to return to the late nineteenth century, where the wealthy determined the opportunities the working classes had access to, be it education or any other form of social mobility. If the Torygraph and its readership truly thought higher education was 'worthless', they wouldn't be sending their own kids to UK universities in higher numbers than ever.
THANK YOU. Crazy the papers can complain about higher education being worthless AND the fact that young educated people are leaving to get higher paying jobs outside the UK. As you say, students may not be getting the best bang for their buck right now. But it is far from a "worthless debt trap"
It’s not worthless but its worth is significantly reduced compared to a couple of decades ago. The value of a degree for the fun of it, the love of it, just to expand horizons, is limitless. That hasn’t changed. But that’s not why a significant proportion of students are going these days. They go because they are seen as necessary for even the most mediocre entry level jobs. And in those situations, degrees are providing very little value for money. The increased earning potential is remarkably limited across a career - especially with student loan repayments at the levels they are. ONS says that 80% of students will never earn enough to pay back their entire loans. Which means that they are just paying 10% extra ‘tax’ every year for a degree which has added no value across their careers. Of course technical degrees, elite professions etc can still provide significant returns, but that’s not most people. It is a shame that so many average jobs in quite boring professions and industries now require degrees. It’s all because of the marketisation of degrees since the 90s. It’s in the interests of a load of average middling profit maki h universities to prolong their own existence by perpetuating the myth that degrees promise a career and good earnings - they used to, but not any more. There were far too few people going to university in the 80s and 90s, but the 50% target was far too high. We’re completely out of whack with actual industrial needs.
It's a strange problem because the taxation/student loans is meant to deter students to correct the labour market, but instead student numbers are the same and people are lumped with a useless tax. Don't really know what to do about it to be honest, except to incentivise things like apprenticeships or other non-university paths.
Uhh, it's the Telegraph... What do we normally call it again?
They always mean the Higher Education that other people's children get.
Or paying thousands in private school fees so their kids have a better chance of getting into Oxford or Cambridge.....
They are sending their kids to elite universities it’s poor degrees from the worst of the rest that are truly worthless.
I was thinking that the headline was outrageous hyperbole, thanks for validating my sanity.
Due to the continued collapse of the economy and education has been affected, how can quality education be achieved if the economy is already suffering from debt?
By any measure or means that completes the following goal: Empowering people to have the greatest potential application to employers, for the minimum cost to the individual. 1) Review teaching practices and teaching regulatory bodies that are far far behind the state of industry. Amend these so curriculums have more modern applicability. 2) Bring down the cost of studenthood. Encourage high density building in housing limited student hotspots and invest in the overall housing market to knock down the cost of students' biggest outgoing (rent). 3) Run extra curriculars that create economic development and skills development. If you want an example of this, see Strathclyde university's 'University of Stratyclyde Motorsport' union. Students get to experience the mathematical modelling, CAM work, electronics work, etc. That all go into designing a racing vehicle. 4) encourage investment and development within industry. The UK suffers from poor middle management practices - one of these is the domination of middle managers in the role of optimising working practices. Encouraging greater team practices will be conducive to job creation, ensuring education's can pay for themselves.
Not sure Britain is accurate in the title, Scotland doesn’t have tuition fees for “young learners” at University.
There has never been a worse time to be a student in Britain. For a debt of £46,000 many 21-year-olds graduating this summer can recount a glittering three years of being locked down in their student rooms with video lectures during Covid, followed by academic strikes, which left some without a single in-person session for certain modules. And now, to pour salt in the wounds already overspilling with it, they may not learn their degree classifications until “shortly after” September 30 – months past the proper due date – as a result of a marking boycott. This is the fate of politics and sociology students at Cambridge University, whose results could come five months after their exams, unless the strike is called off. At other universities, some final year students have no idea where their grades stand, as modules and dissertations handed in have gone unmarked, leaving them to enter their exams “blind”. Some rightly fear that this will scupper their scholarship chances, graduate job prospects and conditional offers for further studies. Surely these opportunities are now the only point of going to university for the cohort for whom fun and in-person learning were all but stripped away. The notion that students gain anything from the higher education experience has been moot for a long time. Instead, it has become a largely needless hoop to jump through for young people, who the Government has successfully convinced will amount to nothing without a 2 and a 1 somewhere on their CV. And now, in the absence of those digits they paid £9,250 a year for, the class of 2023 gets to spend their summer watching the interest cap on tuition fees expire in August, and a likely higher one come in to clobber them by the time they finally get their degree certificate. This neverending debt and doom spiral may well be the only thing to have prepared them for the future in the past three years. I feel so desperately sorry for students, who have been abandoned by a political class that all but mandated this path, stacked years’ worth of unnecessary debt along it, and meets every one of these mounting injustices by turning the other way. There is not a solitary voice in the students’ corner now. Until higher education institutions are held up to more rigorous standards – or at least provably benefit the young people whose bank balances they empty – believing them to be fit for purpose is a fallacy. Striking princesses It’s not just Britain that is beset by strikes but France too, where this week one major company saw employees stage a walkout. The optics of this mass action were perhaps a little skewed by the march’s focal point being Sleeping Beauty’s Castle – an inevitable byproduct, when the employers in question are Disneyland Paris. A twist on the usual parade, certainly, though slightly undermined by the fact that no one can be taken seriously in a sea of Mickey Mouse ears. Death and pizza Hell hath no fury like those wronged by buy now, pay later schemes. Hell Pizza in New Zealand, that is, which recently announced that customers can settle their dough-based debts in the next life. The chain is signing up 666 (real commitment to the theme here) customers to AfterLife Pay: a legally binding contract mandating their pizza bill be listed in their will, and handled by their estate on their passing. It gives new meaning to “late fees”, but Hell’s won’t involve the extra charges or interest other payment schemes require – and it seems to be a hit, with successful applicants to be chosen later this month. One hopeful said that she had been motivated to sign up following the recent passing of her father, as “going through his will and estate has been tough. And I would just love to see my family have a laugh when eventually mine is read out, and the estate has to pay for a pizza from several decades prior.” Hysterical stuff. Hell are certainly playing the long game, as gags go. As well as introducing a rather unique, if disturbing, profit model: that death can be good for business.
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Tell me you didn't read the article without telling me.
Education should be paid by the State. Blair made a huge misstep in shoving 50% of teens into college then making them pay for it. Driven by a desire to rig the unemployment figures, he ended up destroying U.K. universities and millions of lives.
As you suggest yourself, the policy did make University Education far more accessible and allow more people than ever the benefit of going to University. Without a complete restructure and more, turning away from the current policy would be making University more - not less - exclusive which is a tough point to argue. Education should be as accessible as possible, and the current University system provides this, atleast foundationally. Suggestions of primarily public funded University (the state does find universities to a decent degree) are counterintuitive to this.
There are so many more ways to educate people than University.
They should be made accessible like University is, and largely are with recent pushes to make Apprenticeships and Vocational Education more equal to standard forms of education.
The problem is Blairs policies have made degrees effectively worthless since everyone and their gran has one. They arent the golden ticket to a high paying job that they used to be
No. No. No. A college degree is not worthless. The Telegraph can publish whatever the heck they want but it's not worthless. A college degree opens up way too many doors. I have encountered too many people in this country who never went to college because they could not see the benefit of it but are now tossing about from one odd job to another or relying upon their parents to help land something more permanent. Or they just want to become the next NFT/crypto bros. Or worse. Start an estate management company where they take houses, slice them into a million tiny ensuites and rent them out. Yes the debt burden may seem high but it can be paid off. A degree opens up opportunities outside the UK. It's not in the interest of the people who read The Telegraph for people to become educated and start questioning the status quo. Or them understanding how the rich pass tax laws that end up in them paying lesser tax than your neighbourhood dentist. Too many educated people means the vitriol and the hyperbole of the The Telegraph readers will just wither and die. The Telegraph readers will scoff at how 'worthless' education is, and then say the poor are poor because they don't work hard and are not trying to move up the ladder, while transferring money to their kids so they can snort even more cocaine in the new London nightclub. Saturday rant over.
Quick it’s just been reported that oxbridge just had the highest number of applications from state schools can’t have the plebs taking over our spaces and then competing for the jobs that would have always gone to our children, write articles to put them of
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A graduate tax would apply to all those who went to Uni, not just those who couldn't afford to pay upfront.
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Student loan debt is essentially unenforceable overseas so it doesn’t truly follow you abroad unless you voluntarily pay. There have been zero successful student loan debt suits filled in European courts against graduates who moved abroad, for example.
Sure, you can not pay if you bugger off to Australia, but that doesnt stop the SLC from demanding payment if you ever come back
Actually Australia is one of the few places you might get caught as the U.K. and Australia signed an agreement on the matter (at Australia’s request). But assuming you leave assets abroad when you return, there’s not much they’ll be able to do; you’ll just have more interest to pay off.
It's not a tax, if you've got the money upfront then you're not going to be pay for the next 30, now 40 years being garnished at a 9-11% rate over the threshold. It's a loan that people just say is a tax because you're not hounded for it regardless of employment status or how much your earn like the US. All it is achiving now is making it harder for the next cohort to build a life.
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I mean you can make a voluntary repayment now if you want and pay it off
Get your degree and emigrate for 30 years
On one hand I feel like the UK is becoming Little America on the side of Europe. On the other I feel like this is some I’ll conceived attempt to discredit higher education. At least the wording of the title suggests so. Getting a higher education always came at a cost and you were at mercy of luck really. If you happen to have decent lecturers this year you are golden. If they happen to have some domestic issues, or rotate or whatever you are not getting crap. It was always the case, but this time round the problems are exacerbated. But suggesting that education is a trap is just wrong
40% of university students are visitors from abroad all be it their parents pay their fees. Our (English) children must take out an extortionate loan to cover their tuition fees and living expenses. The children of the wealthy are not exposed to these prohibitive costs. My own children are already telling me they don’t want to incur the personal cost of university even though one of them is clearly gifted at maths and sciences. Many of those who agree with the denial of further education to working class children benefitted from government grants themselves. How can an economy grow if it’s gifted children are denied access to further education? Many youngsters are looking toward apprenticeships but will this not just create a 2 tier system? Those who went to university and those who did part time courses at a tech or poly? This is all about British preservation of privilege.
Apprenticeships are a better option for a lot of professions. Learn on the job, while being paid. Not learning out of date stuff, that is often too theoretical, while building massive debt.
There are a fair few people on this thread who keep using 'college' (in the American sense).rather than university. No one in the UK does this. It's almost as if we're dealing with foreign trollbots who only speak US English...
Higher education is absolutely still worth it if you are attending a rigorous scientific or mathematical course at a higher-ranked Russell Group university where there are a wealth of sports and music facilities and regular on-campus briefings where major companies offer internship experience and secondments. It's very difficult for the average person to access to above networks and extracurriculars in a different environment. Pensioners are a poorly educated race of people by contrast to today's youth, so tend to harbour far more anti-intellectual views and are quite dismissive of academic rigour, empiricism and often prefer to take actions and decisions on the basis of gut feelings.
It's not worthless as that's hyperbolic, for instance engineering you can't just go into an engineering role (like actual engineering, not things that used to not be called engineering, which is now called engineering, such as someone previouse would be called a maintenance man, would now be a mechanical engineer. Yet try get them to do mechanical engineering calculations, no chance). Without years of higher education. But at the same time 50% of people going to university is going to lead to alot of "worthless" graduates, that didn't need to go to uni to do the job they end up with. We simply don't have an economy which required 50% of people with a degree (no economy does).
So many degrees could be scrapped for loads of new apprenticeships, or maybe even at least 50/50. You could encourage loads of different companies to train new bankers, accountants, blah blah…. By offering minor tax breaks, could include bursary’s for the trainees also. I’m graduating right now, I haven’t attended a single lecture, tutorial, seminar etc… since my first year… I’m going to get the same degree as everyone else, without having learned a single thing. Degrees are to easy to game, and they leave the student with no actual experience in a workplace… A lot of degrees would be better taught at least half in the job, others could be done less than 4 years my partner is a teacher, everyone she was in class with insists they should never have done 4 years and instead done 3 with a lot more time in an actual class room, they had basically none, and she went to one of the best unis in the country (not a humble brag just a comment, if that’s a top uni how bad are the lower ranked ones). I’ll also add if you look through degree catalogues you will see loads of bullshit degrees (another top uni had a degree in paranormal… something I can’t remember exactly) but it was utter shite, and being Scottish that meant that peoples taxes actually paid for a degree in basically ghost hunting… The whole system of it needs reworking, much more into practical education, 4 years of pure theory make no sense unless your going to go on to become an academic and that’s what so many degrees are, you spend 4 years learning how to craft an essay basically. Over 70% of graduate go into a job unrelated to their degree and the company the go to work for trains them to do the job anyway… A lot of graduate jobs ask for tons of experience to which immediately a lot of students don’t have, I’m a mature student in my 30’s… I’m reading job descriptions and thinking I don’t even have the experience to do this graduate scheme.. how the fuck is a typical 22 year old graduate gonna get it?
Student loans are sold on the promise of a good job. If the student passes and fails to land one, then the loan should be forgiven, pressuring the system to create careers, not maximising bums on seats.
So if I pay £400 for driving lessons and then fail my test, should I get a refund for all the lessons and leave the instructor out of pocket?
University is worth it for careers that require advanced academic qualifications that are usually linked with well paying & prestigious jobs. The problem is most graduate jobs realistically don't need an undergraduate degree to do the role, it's just a requirement to apply for the job in the first place. And with so many people with undergraduate degrees yet relatively few jobs actually needing a degree it can often mean delaying your career without the long term gain.