UKC

The latest IFS view:

http://www.ifs.org.uk/publications/7905

Follows on from budget discussion on the effects on poorer students on the now locked thread:

https://www.ukclimbing.com/forums/t.php?t=619868&v=1#x8088914

In reply to Offwidth:

Frick me!

"The poorest 40% of students going to university in England will now graduate with debts of up to £53,000 from a three-year course", I had debts of £17,000 when I graduated (in 2012), which I thought was alot. I know my degree would not have been worth £53,000.

In reply to Offwidth:

Its all a bit sickening really

In reply to Offwidth:
I know it's put my son off from chasing his dreams. It'll also prevent him from getting a job in the industry that he wants to work in with no degree. There's no way I can afford to pay for it & he doesn't like the idea of that massive debt hanging over his head for the rest of life.

In reply to RockAngel:

What is he wanting to do? Is there no apprenticeship route?

In reply to willworkforfoodjnr:


This is what people voted for, folks.

In reply to RockAngel:


Perhaps you and he should read what Martin Lewis (of "Money Saving Expert" fame) has to say about them.

http://www.moneysavingexpert.com/students/student-loans-tuition-fees-change...

If I was 17 again and was considering going to university, knowing what I know now, I would fear no debt hanging over my head.

The only real world consequence to me would be a relatively small fractional deduction in my take home pay if, and only if, I earn above average salary. That is the sum total effect the "debt" would have on my life. No bad credit history, no debt collectors, no repayments if I earn under £21,000 a year etc. etc.

Someone will soon be along to argue black and blue that that 9% deduction on take home pay over £21,000 is crippling and a massive burden, unlike the significantly larger deductions for PAYE and NI.

It's not all rosy under the new system - people need to have a realistic understanding about employment prospects for a given degree and institution. Is the degree actually going to result in them earning enough extra money to make it worth loosing 9% of their income above £21,000 a year? Is it a gamble worth taking?

I am deeply disappointed that the new system has been so badly mis-represented as "crippling debt" to the point where it puts people off going to university, when in reality it has opened the doors to far more people going than ever before regardless of their personal or family finances, and is set up so as to never cripple anyone financially. Even more distressing is that this system increasingly looks like it will not work - given the fairer repayment thresholds than the old £3k/year fees, and the mixed employment outcomes for the many, many graduates, it looks like it will recover less money than the old system.

In reply to wintertree:

Oh to be so blasé about a mere 9% of my salary for life. In my world it has a real impact. I suspect many other people could really do with another £150 odd quid a month too.

In reply to XXXX:


9% of the part of your salary above £21,000 only, and only for a maximum of 25 years.

I could really do with the money I pay in NI and PAYE. I didn't opt in to them with full advanced knowledge of the terms. You opted in for that £150, and don't worry if you weren't paying it for a loan you'd be paying at least £75 a month in increased general taxation instead - the money's got to come from somewhere.

I'm not blasé about it but it is not in any way shape or form a life limiting or crippling debt and is not something that would make me bat an eyelid about doing a degree. Out of interest, do you think your degree has you earning at least £1800/year more than if you'd not done it?

The current system is crap, flawed and looking increasingly unsustainable. It is not however crippling debt to be afraid of. It does normalise the concept of holding debt for many students, that opens the door to other problems.

In reply to girlymonkey:
He wants to go into animation, hopefully working for a company in Canada eventually.

In reply to RockAngel:

I'm sure he could find an apprenticeship for that (a quick google search shows that they exist), and he'd likely be more employable after an apprenticeship than after a degree. Earning while learning his craft seems like a good option (disney do animation apprenticeships! How much better could you get than that?!)

In reply to wintertree:

What money has got to come from somewhere? The many predictions for the tax effect from the fiancial anaylsis of the fee increase from 3k to 9k predict anything from small savings to the tax payer to possible extra costs (largely depending on economic growth). This IFS anaylysis shows the poorest face the largest effects of debt.

Not all debt is crippling but the idea it is OK when it saves the tax payer nothing and applies unfaily to the poorest in society is plain daft.

In reply to willworkforfoodjnr:


What's the alternative?

A return to taxpayer funded university education for limited numbers based on merit.

In reply to wintertree:

The £150 a month I spend each month on a student loan (after tax and NI by the way) is desperately, desperately needed and has a huge impact on the quality of life I, and particularly my son, live. I find the way you dismiss such large sums of money quite distasteful.

The tax/NI thing is a weird comparison that you keep making. Everyone who earns the same, pays the same so there is no difference between you and the person next door buying the same things. If you go to university and do a PGCE to become a teacher, after 10 years you'll be earning what 36-40k or so. Not a huge deal and perfectly attainable for someone without a degree. For you're whole life, your costs of living are 10% more than that person. Where is the incentive to do that?

The same goes for many, many other jobs which require a degree, but offer no salary incentive.

We have monetised education and we will be poorer for it. All education (the first time) should be tax payer funded because we all benefit. It's truly, truly sad that people can't appreciate that fact.

In reply to RockAngel:
If it's animation he could get in with a good showreel alone. If he is keen and keeps regularly sending new work to as many companies as possible he could well get a job that way.

What kind of work is he interested in? With CGI or 2D he could train himself at home given enough time to commit to each project. Model animation/stop motion is a bit more involved skillswise as he would need access to the resources and tools required to build sets and manufacture puppets, not to mention lighting and camera kit, studio space etc.

In reply to Offwidth:


The money to pay for running the teaching component of HE. If it does not come from a tax on those who went, it must come from general coffers, that is a tax on everyone.


It seems the models for income eventually paid via the student loan system are constantly being revised. In one direction.


I am sorry but I do not see that in the summary you linked. It says that more people from poor backgrounds (actually it is just putting them on the same footing as those from wealthier backgrounds where the parents can not or will not contribute) will carry more debt to the government. The student loan system is carefully set up so that the financial effects of that debt are limited only to those earning an above average income. There are no financial effects from the debt on the poor. A poor understanding of this apparently deters some from going to university, that could be a real negative effect.

No financial effect on the poorest. The IFS even acknowledge this in the link: About two-thirds of those eligible for the full maintenance grant will repay no more as a result of this reform because they will end up with the additional debt being written off.

"They will repay no more" - pretty clear that this means "no financial effect" to me.


I agree with your sentiment. I think in measurable financial terms it hits middle earners more than those who go on to be poor or rich. Either way, it's a crap system but that is no excuse for misrepresentation about the implications on someone from a poor background going to university.

In reply to XXXX:





Surely the wider issue is that too many jobs require a degree these days?

We seem to have become obsessed with the need for a degree level education.

If all education is to be taxpayer funded we need to consider how to target that education based on merit rather assuming that it is everyones right.

In reply to XXXX:


I can back calculate to estimate your salary from the information you have given and I can look at what you have said and phrase that £150 in terms of your net monthly take home pay. I'm not going to do that or post a worked example on here - I do think that would be distasteful. But it would cast that £150 in a different light.

We'd all like to pay less tax burden. Your student loan is something you decided to take on, and the consequences are as fairly managed as can be imagined compared to any loan. It sucks to have to pay for things, but nobody made you buy this one.


Indeed; there is a lot of unfairness here - more so if you believe that some universities are over-selling the job enhancing prospects to their students who are then making naive decisions with potentially significant (but not crippling) financial consequences. I have sometimes wondered if we are going to have some "mis-selling scandal" in the future over this, but if there wasn't one over the forensic sciences craze...


Mistake 1) 25 years, max. Not life.
Mistake 2) Where do you keep getting this 10% from? It is wrong. Even if you'd said 9% you'd be wrong. It is 9% on income over ~£17000. You would literally have to be earning more than an infinite amount of money for 9% above a £21k threshold to equal a 9% increased cost. Someone on £50k per year faces a 6% increased cost.


What do you mean here? If you mean "we have converted the process of delivering higher education into a money making machine" then you are flat out wrong. The stupid system we have is looking like it is not going to break even.

We have transferred the costs from general taxation to those who benefit directly, in such a way as to safeguard those who go on to poor earnings and to ensure that all people are protected from crippling debt.


All education? To what level? To what purpose? I would rather see a lot of higher education funded by general taxation, but certainly not "all", but that's another discussion.

The grant system was not great (highly exclusive, few went).
The £3k fees system was not great - repayment threshold penalised under-average earners.
The £9k fees system is not great - it penalises middle income earners, failure has no penalty, it may not balance the books in the long run.

You seem to want general taxpayer funding for the current level of HE. I'd estimate that you'd be paying £75 a month for that out of increased taxation instead of £150 a month in fees repayment. The money has to come from somewhere.

In reply to wintertree:
I follow your explanation and agree wholly with your objective reasoning regarding the funding of higher education.

Additionally, by charging students attending courses for the provision of those courses has the added potential benefit of more directed funding for popular/successful/useful courses vs. those which are less popular/successful/useful (obviously dependent upon the university directing the received fees in accordance with the students attending).

That said the presence of student loans to the value of ~ £50,000 will have a subjective impact upon those from less well off backgrounds.

Speaking personally, in 1991 when I went to university I received a full maintenance grant. Student loans were a new thing back then (being founded in 1990/91).

The maximum amount which I would have been able to borrow in loans over the course of my entire academic career would have been around about £10,000 - it wasn't anywhere near that high because of the value of my maintenance grant. For context my maintenance grant over the same period (5 years) was probably around about £15,000. So the overall government budgeted cost of attending university for 5 years was about £25,000

Now if you'd turned round to me at the end of my school career and said it's going to cost you £25,000 to go to university, I'd have said "my parent's house cost them £40,000 ... how the hell am I going to afford 25 grand?"

That all said I did go to uni and did pay off the small amount of loan I had within 3-5 years - because I was lucky enough to get a job in different field to my undergraduate degree.

Now you can make all the objective statements about earning potential and not having to pay things back until certain thresholds but you're still going to have an impact upon whether young people are going to consider university or not because of the fear regarding such a large amount of debt hanging over them at such an early age.

My opinion is that the subjective aspect needs to be addressed responsibly otherwise the wrong effect will occur and the wider society will suffer the absence of a leg up for those from less well off backgrounds.

In reply to wintertree:
I repeat. The analysis of tax savings, government savings, government debt or whatever you want to call it, shows it is pretty much unaffected by the fee increase from 3k to 9k. This is admitted now even by the government. This is an unmitigated disaster for the taxpayer and those going to University and their families who carry part of the cost. The extra missing money goes to the loan companies and students who don't end up in well paid jobs; the voting public were told their tax would drop, but the government got their sums wrong and now its clear they won't (at least by any large amount). If you are unaware of this it shows how out of touch you are (like others who defended the indefensible on past threads similarly in ignorance)

http://www.theguardian.com/education/2014/mar/21/student-fees-policy-costin...

There is another possibility. The government can change its mind on the point students repay and hit those around the payment threshold harder. Both going back on their promises and hitting people in the lower paid graduate professions, harder (like teachers and social workers). The recent budget started a move in this direction. This is another risk factor acting as a disinsentive for those considering University.

As for the comparitive effect on the poorer students point I can only think you are failing to see the wood for the trees. Its their main summary for goodness sake. Do you really think kids from poor families thinking about Uni will be aiming for lower paid jobs or to fanny about (such that they wont need to repay).

The IFS main headline:
"The replacement of maintenance grants by loans from 2016–17 will raise debt for the poorest students, but do little to improve government finances in the long run. The proposed freezing of the repayment threshold for loans, on the other hand, will – if implemented – significantly improve government finances because it will result in an increase in graduate repayments."

In reply to timjones:
Every major western economy (including the UK) either easily makes the oft derided 50% HE educated level or imports expertise (like the US we are big importers). My view is we in the UK put too much focus on Universities and too little emphasis on vocational training leading to professional work where the numbers are too small, the funding is poor and the qualification standards have been eroded. Irrespective, if we dont meet 50% or the 50% have the wrong skills we need immigration.

In reply to Offwidth:
Unfortunately we got into the idea that everyone should go to uni regardless to get a degree which just doesn't make sense.

For a lot of Uni courses the Education is expensive and the more people that go the more overall it costs, tuition fees and the cuts in grants are all based on the fact that so many people go now to Uni.

Fees for my course if you wanted to do it privately e.g. foreign student i think were £9,000 way back in 1990.

Uni is still a pretty good deal with the debt compared to many countries, and if you go for the right reasons. And by that i mean because you a) either love the subject or b) you have a career in mind, it is then an investment. Just going and doing some light weight course because you think you need to is a waste of time.

In the past you went to university because you were actually pretty clever and you could go regardless of if you were poor or rich as your education was paid for and you got a decent grant too. Its sad that the drive to not have elitism is now actually preventing social mobility for those bright poorer students who worry about debt and fees.

Bright poorer students are probably restricted in their choices in education more now then ever before, no grammar schools, stark choice on debt for Uni etc.

The fact is you don't need to be educated to degree level for the vast majority of jobs, you learn through on job training, or specific qualifications. Certainly my job now has nothing to do with the degree that I got at Uni.

Successive changes to education have made it easier and easier to get a decent grade today's batch of school leavers heading for Uni are not any brighter than the batch which left school when I did but they definitely got a lot more As and a a lot more of them are going to Uni.

As an employer you have to differentiate and choose who to interview, I do it myself I look at education and actual experience. I don't want to look at 100 CVs so they get filtered keep any with relevant experience (regardless) and then for the rest cut anyone that doesn't have a degree. If I have a selection of CVs and I have to choose one person to interview it will be the one with actual experience / Skills needed for the role I have.

In reply to DrIan:

And following on from this, as more and more people have undergrad degrees, those that want to stand out now need to spend a fortune doing postgrad degrees. So in the 'olden days' when a tiny percentage went to university for free, they could stand out from the crowd and those from poor backgrounds could genuinely better themselves (my Dad did). Now, most people can get a heavily subsidised undergrad, and then if you want to stand out it costs you a huge amount to do your postgrad.

In reply to DrIan:
What vast majority of jobs? Certainly the vast majority of the best paid ones do and all of the professional jobs. The ONS data shows the benefit of being HE qualified and the disadvantages of not.

In reply to Offwidth:
What I mean is you don't need an actual degree to be able to do the vast majority of jobs whether an employer stipulates that you need one to apply to their company is different matter entirely.

For example you do not need a degree to work in Finance if you want to be an accountant you just need to have undertaken the relevant professional qualifications.

It is what girlymonkey was getting at you only need a degree because everybody else has one not because any of the jobs actually need them.

In reply to Offwidth:


I've been trying to work out how to set up an apprenticeship scheme where smaller farms could "club" to share the employment costs of youngsters who are training under the current apprentice scheme and maybe even speeding some of their working hours on their own small agricultural enterprises.

Let's just say that there is no real will to assist people who are trying to offer training/work to youngsters who are practically minded and not inclined to embrace the full time higher education model that is currently on offer

In reply to zebidee:


I agree entirely. I think this is one of the big problems of the new loan system. It's why I have zero time for people peddling incorrect fear, uncertainty and doubt over the objective reality. The newspapers are guilty of this, whoever happens to be the political opposition at the time are guilty of this. Individuals who should know better are guilty of this.

If they'd called the damned thing a graduate tax and not a loan, it would function identically and would not have opened the door to this crap situation. However they would then not have been able to defer the financial black hole into the future books, and would have to have admitted from day one that the system is financially unsustainable as is.

A sorry situation all around.

In reply to Offwidth:


Yes


Yes.


You and I must have very, very different opinions of what is an unmitigated disaster. I


You may not have spotted this, but I do not like the current system. At all. It has different flaws to the last two funding systems. I am perfectly aware that it is reaching the point where the £9k system generates less return that the £3k/year system. I have said as much here and in the past. I'm well aware of the problems that this is going to go on to generate. You seem to have missed my point by a country mile. I am defending one aspect of the system - namely that it does not in any real actual way impart crippling debt that should put people off going to university. The system itself is not something I could defend. That particular implication, absolutely. Seen through UKC glasses however someone clearly can only have a 100% polarised view.



No, presumably they are going to uni to open up access to higher paid jobs, at which point, wait for it, they won't be poor anymore.... Unless they don't make it then they are completely and utterly protected from any impact of their student "loan".




Yes. Let us qualify that. It raised "student loan debt", which acts like no other debt in the world. Student loan debt does not affect the poorest students in any objective, measurable way. Yes, the system will not recover the cost and there is a looming crisis in HE funding as the extent of the black hole in the finances becomes apparent. Yes, this is bad. Yes, it's awful that the current fees system has failed so badly.

Worst of all is that it's put some people off from HE because of misrepresentation of the consequences of the "debt."

Now, there are perceived effects of that debt which have real effects and show how ill thought out the system was. The £9k regime actively protects poorer background people compared to the £3k regime by raising the repayment threshold significantly.

In reply to timjones:

Not sure about that . As an employer you get £1500 per apprentice and the govt bears the cost of them at college. I do that for my engineering apprentices.

In reply to neilh:


And then you pay them a wage as well?

My thinking was that if we could spread that cost between a cooperative of smaller farms it would open up more opportunities, allow youngsters to experience a wider range of farm businesses and pick up skills from a large reservoir of skilled stockmen. It's a model that has worked well with RDPE funding in some areas and it would be great if more apprenticeships could be offered by embracing the concept.

The ability to include time spent working in their own businesses is a key factor for me. The apprenticeshio scheme recognises that deep sea fishing, web design and the creative arts can do this as they are jobs with a strong tradition of self employment but there is a stubborn refusal to even consider granting the same concession to agricultural apprenticeships.

In reply to wintertree:

So you now acknowledge that all this extra debt (on only the most successful of our students, due to the 6k fee increase to 9k) probably doesn't save the taxpayer any money (despite no indication at all of this in your earlier posts) and yet you still maintain you don't regard this as an unmitigated disaster. It really makes me wonder what would constitute one in your mind. The whole stated point of the arrangement was to transfer much of the cost of running undergraduate teaching from the taxpayer to the students without disadvantaging the poorest. You really think they could have made this change if people knew up front that either there would be no tax savings or they were lying that you wouldnt need to start paying back at the level they said, such that the poorest would take a bigger hit.

In reply to timjones:

I agree there should be more help for the scheme you describe. We are not interested in investment at the moment just ideology.

In reply to Offwidth:


TBH the only help needed is a more practical approach to the rules. If the roles allowed it I'm sure we could get something up and running.

In reply to Offwidth:


I don't just acknowledge it, I said as much in my first post on this topic. It is one of my big problems with the new system. Here is what I said it looks like it will recover less money than the old system. I didn't say "save taxpayer money" but as I keep saying, the money has to come from somewhere...


Well, see, that's out and out false isn't it - see above. Then, I also said this The current system is crap, flawed and looking increasingly unsustainable. Perhaps I didn't expand my thinking enough here for some people. The government pays the money at point of use. It collects it in the future via loan payments, or by selling off loan books at a loss. I said "unsustainable" - by that I mean projections increasingly show costs not begin recovered. Ergo, the government is out of pocket. Ergo, the tax payer has to pay. It's not rocket science.


For an individual - not going to university against their dreams or potential because they have been so rattled by uniformed, or malicious, FUD about "debt" rather than the objective financial facts.

On a larger scale - a mismanaged, ill thought out change (likely through policy or failure of policy) that leads to an immediate collapse in HE funding resulting in courses being cancelled directly impacting students and large scale layoffs resulting in significant damage to the HE sector.


Come on then, tell me how the "poorest" are taking the "bigger hit"? Who are the poorest? How is being given enough money at point of need to pay for accommodation and fees at most UK universities "hitting" them? Once they graduate their "poorest" status is defined not by their parent's finances but by their income, and the poorest by income are not affected at all as they pay nothing. As I said before those who carry the highest real financial cost are the middle income graduates.

I'm sorry but I don't see that you have given any credible argument that the "poorest" are hit the hardest. You just keep saying it.

Edit: I'm going to go out on a limb and try and construct a logical argument about the ill defined "poorest" being hit the hardest. Perhaps you feel that by withdrawing the grant those of the poorest parents have to borrow the full extent of their support, and will have more repayments over their lifetime compared to someone whose parents support them up front. This is correct, but the same is already true with some parents paying full fees and costs up front - those from parent's who couldn't or wouldn't contribute pay more than those whose parents can. This is no different to many other aspects of life mind you. It's not great, it's not however something that should put anyone off university. The current system, soon to be abolished, has awful consequences for people (adults!) who are assessed and penalised for access to funding based on parental income with zero consideration for a parent's ability or willingness to contribute. That to my mind is also manifestly unfair - fix that and the problem moves. All this would also go away with my preferred option of much of HE being paid for by general taxation.

In reply to timjones:

Off course. And I pay them above the minimum wage for apprentices. Which to be blunt is poor .most small company's I know do this.

In reply to timjones:

Or another way of looking at it is this. If the current business cannot afford to cover the cost of an apprentice now. Then what hope is there for you to employ that apprentice when they are qualified. The answer is zero. So let us be brutal about this, why on earth would you take on an apprentice.

You have got to be able to offer them a future.

It's a bit of a brutal view .

In reply to neilh:



It seems like a very narrow view to assume that their only option is to remain in the employment of the employer that they did their apprentice ship with.


Surely the skills they learn and hone in a real work environment are valuable. I would imagine many of them setting up their own businesses with help from mentors as they did so. With the average age of father's being somewhere in the mid 50s there are huge opportunities for keen youngsters with the right skills and support.

Who knows in a few years time I could be forming a share farming agreement with the right youngster.

There are opportunities far beyond spending your working life as an employee.

In reply to wintertree:

On my hols so will reply when back.