Disillusioned.
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Re: Disillusioned.
Tinkers - I am normally a fan of Martyn Lewis but this article is misleading.
NO-one, including him, has had ANY guarantees about future implications of such huge debts. No building society has given any assurance that these debts will be over-looked when they come to apply for a mortgage - in fact they can't ignore a £50K debt.
No-one knows what the implications will be for our children and anyone who says otherwise is not being truthtful. The paperwork says the rules can change at any time! They are already racking up interest at 3% above base from day one of their course.
NO-one, including him, has had ANY guarantees about future implications of such huge debts. No building society has given any assurance that these debts will be over-looked when they come to apply for a mortgage - in fact they can't ignore a £50K debt.
No-one knows what the implications will be for our children and anyone who says otherwise is not being truthtful. The paperwork says the rules can change at any time! They are already racking up interest at 3% above base from day one of their course.
Re: Disillusioned.
Of course there are no guarantees. I think he does mention that.
There few guarantees in life in general. I guess it depends how risk averse people are.
Students may well be racking up interest from day one, but if parents feel they need to pay upfront, they are either paying interest on loans taken out themselves or losing interest on their savings. If they take out loans to pay for their children, they have to pay it back regardless. Their DCs only pay back a fixed % of their salary IF they earn over a set threshold. After a set number of years, any outstanding debt is cancelled. some will never pay back a penny. How much they pay is not dependent on how much they owe, but on how much they earn.
Future applications for mortgages etc, should be based on the persons ability to make repayments. So yes it is bound to affect applications as any loan or other outgoing would. Student loan repayments are taken directly from graduate salaries.
Things can and probably will change by the time my DD gets to 18. If things stay as they are then the money will stay in our bank accounts instead, and we will use the money to help her on her way after she graduates.
However this is more for those with DCs much nearer to uni than mine. There is a lot of confusion about tutition fees. This article hopefully explains how things currently work.
There few guarantees in life in general. I guess it depends how risk averse people are.
Students may well be racking up interest from day one, but if parents feel they need to pay upfront, they are either paying interest on loans taken out themselves or losing interest on their savings. If they take out loans to pay for their children, they have to pay it back regardless. Their DCs only pay back a fixed % of their salary IF they earn over a set threshold. After a set number of years, any outstanding debt is cancelled. some will never pay back a penny. How much they pay is not dependent on how much they owe, but on how much they earn.
Future applications for mortgages etc, should be based on the persons ability to make repayments. So yes it is bound to affect applications as any loan or other outgoing would. Student loan repayments are taken directly from graduate salaries.
Things can and probably will change by the time my DD gets to 18. If things stay as they are then the money will stay in our bank accounts instead, and we will use the money to help her on her way after she graduates.
However this is more for those with DCs much nearer to uni than mine. There is a lot of confusion about tutition fees. This article hopefully explains how things currently work.
Re: Disillusioned.
But these rules can change and may do so at any time!Their DCs only pay back a fixed % of their salary IF they earn over a set threshold. After a set number of years, any outstanding debt is cancelled. some will never pay back a penny.
My DC has just finished term one - so it is of immediate importance to us ..
Re: Disillusioned.
I agree, there is a risk. When they put up tuition fees up from £3k to up to 9, potentially they could have made it retrospective so it would have affected those already at Uni, not just those yet to start. That could happen in future. All sorts of things could happen.
Alternatively, I know someone who was going to remortgage their house to pay for their DCs to go to uni. They didn't in end, but got made redundant, quite out of the blue. They are struggling financially atm, and are glad they didn't remortgage. The repayments would have flattened them completely.
Unfortunately many parents see paying for their DCs fees upfront as a necessity, or that their children can't afford to go in the first place.
There are few guarantees in life, you have to make a decision based on what you know at the moment and what you think may happen in the future. Life throws you all sorts of curved balls.
Alternatively, I know someone who was going to remortgage their house to pay for their DCs to go to uni. They didn't in end, but got made redundant, quite out of the blue. They are struggling financially atm, and are glad they didn't remortgage. The repayments would have flattened them completely.
Unfortunately many parents see paying for their DCs fees upfront as a necessity, or that their children can't afford to go in the first place.
There are few guarantees in life, you have to make a decision based on what you know at the moment and what you think may happen in the future. Life throws you all sorts of curved balls.
Re: Disillusioned.
Interest on savings is minimal - certainly less than the interest being racked up on loans at 3% above base rate!
We have not taken out a loan or removed any savings - but you should not naive enough to believe that accepting grants is necessarily a sensible approach.
We have not taken out a loan or removed any savings - but you should not naive enough to believe that accepting grants is necessarily a sensible approach.
Re: Disillusioned.
The interest rate is a bit of a red herring. Most wil never pay back what they owe.
The amount paid back is dependent on what you earn, regardless of what you owe. (Though, of course, that is dependent on T&Cs staying the same, as you mentioned).
Unfortunately people are being naive enough to think they have to borrow to fund their DCs, and that interest on borrowing is not minimal.
My concern is that people do not fully understand how the system works, what the possible repayments might be and what their DCs are likely to have to pay back in future. Martin's guide at least goes rough this in detail and explains it better than most.
The people I mentioned previously read it before deciding to remortgage. They had thought that remortgaging was the best option and after reading it decided that it wasn't.
If people read how it works and decide that they still want to fund their DCs themselves, then fair enough, but at least they have an understanding of how the system works. They have made a more informed decision. Unfortuntely I have come across a lot of people (and quite bright ones at that) who don't really understand how it works and think they absolutely have to fund their children, when it might not be the best option for them.
As for us, my DD is 10. I doubt the system in place when her time comes will resemble how it is now and we will deal with that when the time comes.
(There is also the case of if DCs think they are going to have to pay back their fees themselves, they might actually take their studies more seriously! I'm related to someone who would have benefited from this.)
The underlying problem I have is there are DCs and parents out there who think they can't afford to go to university, because of tutition fees, and that can't be right.
The amount paid back is dependent on what you earn, regardless of what you owe. (Though, of course, that is dependent on T&Cs staying the same, as you mentioned).
Unfortunately people are being naive enough to think they have to borrow to fund their DCs, and that interest on borrowing is not minimal.
My concern is that people do not fully understand how the system works, what the possible repayments might be and what their DCs are likely to have to pay back in future. Martin's guide at least goes rough this in detail and explains it better than most.
The people I mentioned previously read it before deciding to remortgage. They had thought that remortgaging was the best option and after reading it decided that it wasn't.
If people read how it works and decide that they still want to fund their DCs themselves, then fair enough, but at least they have an understanding of how the system works. They have made a more informed decision. Unfortuntely I have come across a lot of people (and quite bright ones at that) who don't really understand how it works and think they absolutely have to fund their children, when it might not be the best option for them.
As for us, my DD is 10. I doubt the system in place when her time comes will resemble how it is now and we will deal with that when the time comes.
(There is also the case of if DCs think they are going to have to pay back their fees themselves, they might actually take their studies more seriously! I'm related to someone who would have benefited from this.)
The underlying problem I have is there are DCs and parents out there who think they can't afford to go to university, because of tutition fees, and that can't be right.
Re: Disillusioned.
I think every family has to decide if they want their child to be saddled with £50K of debt.
You keep saying the 'current' terms - unfortunately you are understimating the likelihood of these changing. I don't know why you are convinced that your 'interpretation' is correct - the truth is no-one knows what course of action might be the best at the moment. To pretend otherwise IS foolish ...
My DC is unfortunate enough to be caught up in this 'experiment' ...
You keep saying the 'current' terms - unfortunately you are understimating the likelihood of these changing. I don't know why you are convinced that your 'interpretation' is correct - the truth is no-one knows what course of action might be the best at the moment. To pretend otherwise IS foolish ...
My DC is unfortunate enough to be caught up in this 'experiment' ...
Re: Disillusioned.
Unfortunately people think it is a choice of their DCs being saddled with debt or themselves saddled with debt.
The current T&Cs are all people currently have to go on when plannng, along with a best guess of what might happen in the future, along with life in general. My friend didn't know he was going to be made redundant, it was a bolt out of the blue. How do you plan for that? Most of us didn't plan on a recession hitting this hard for this long either.
All I was trying to do was post an article that explained how, in a bit more detail, the system works, so that parents can understand how it works. It is scary how many people really don't understand, really it is. People I thought were really on the ball, absolutely clueless.
My own DDs teacher even said that he hoped his son wasn't bright because he couldn't afford to send him to university. Is that right, that he thinks he has no alternative but to pay for his DCs tuition?
Imho, our whole education system is a series of experiments. It seems none are allowed to be completed to get a good conclusion most of the time either.
The whole loans system is a mess, as it stands (as long as it doesn't change, i'll grant you that) most will never pay back what they owe. That doesn't seem to match with the aims of making them pay for tuition in the first place.
The current T&Cs are all people currently have to go on when plannng, along with a best guess of what might happen in the future, along with life in general. My friend didn't know he was going to be made redundant, it was a bolt out of the blue. How do you plan for that? Most of us didn't plan on a recession hitting this hard for this long either.
All I was trying to do was post an article that explained how, in a bit more detail, the system works, so that parents can understand how it works. It is scary how many people really don't understand, really it is. People I thought were really on the ball, absolutely clueless.
My own DDs teacher even said that he hoped his son wasn't bright because he couldn't afford to send him to university. Is that right, that he thinks he has no alternative but to pay for his DCs tuition?
Imho, our whole education system is a series of experiments. It seems none are allowed to be completed to get a good conclusion most of the time either.
The whole loans system is a mess, as it stands (as long as it doesn't change, i'll grant you that) most will never pay back what they owe. That doesn't seem to match with the aims of making them pay for tuition in the first place.
Re: Disillusioned.
How CAN you even speculate that few will pay back what they owe?
The rules could change ... people do need to think what is best - you have not refuted my comments but just restated yours!
The fact is NO-ONE knows and every family must make its own choice - it is NOT the 'black and white' picture you have painted.
The rules could change ... people do need to think what is best - you have not refuted my comments but just restated yours!
The fact is NO-ONE knows and every family must make its own choice - it is NOT the 'black and white' picture you have painted.
Re: Disillusioned.
Well, it is pretty black and white for me!
I - like the vast majority of parents - cannot afford to pay tuition fees upfront. In fact with 5 children - and hopefully about 3 at any one time being at Uni together, I would have to be exceptionally wealthy to do so!
However I still want all my dcs to go to Uni and have a profession. Therefore they will take out loans, and I will encourage them to pay these off sooner in their lives, thus saving interest, rather than later. Except for my daughter - sorry to be sexist here - but if she does have a family and wants to work part-time, for example, she will probably never have to repay everything.
If I am able to help my children financially with anything, it will be the deposit they need to buy their own place.
It is so sad to hear of parents discouraging their children from going to Uni. I still feel that it is very important - where the child is capable of completing the course. I will admittedly be discouraging mine from going to study History of Art or Stand Up Comedy (yes, you can do that degree at the University of Kent) but will strongly encourage them to study subjects that should lead to a relatively stable career.
I - like the vast majority of parents - cannot afford to pay tuition fees upfront. In fact with 5 children - and hopefully about 3 at any one time being at Uni together, I would have to be exceptionally wealthy to do so!
However I still want all my dcs to go to Uni and have a profession. Therefore they will take out loans, and I will encourage them to pay these off sooner in their lives, thus saving interest, rather than later. Except for my daughter - sorry to be sexist here - but if she does have a family and wants to work part-time, for example, she will probably never have to repay everything.
If I am able to help my children financially with anything, it will be the deposit they need to buy their own place.
It is so sad to hear of parents discouraging their children from going to Uni. I still feel that it is very important - where the child is capable of completing the course. I will admittedly be discouraging mine from going to study History of Art or Stand Up Comedy (yes, you can do that degree at the University of Kent) but will strongly encourage them to study subjects that should lead to a relatively stable career.
