University debt and compound interest

[Yamin151]

Another vote for reading the Money saving expert on this and viewing it as a tax rather than a debt. All the latter serves is to make our students feel like victims.
I am also a voter though for the student loans hopefully making more students consider whether university is right for them. and I don't just mean those who aren't so academic - I eman everyone. I also hope that more and more jobs may become 'on the job' training (for example, fantastic nurses used to be made being trained 'on the job' and some would say we have lost something/someone with them having to go in and get a degree) - including academic roles like law or architecture - imagine a world where young people could train to be architects while earning? I really believe that there will be a sea change over a few decades that may well result in a world where pure academic study becomes redundant unless making the teachers of the future, and far more will be learnt at the coalface.

[Tinkers]

I don't think it's something to scare potential students but it ought to frighten the living daylights out of economists and politicians. The current system is completely unsustainable, it's a blatant Ponzi scheme.

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I can't see how the current scheme is sustainable either.

Also agree with Yamin about making people think seriously about whether uni is the right choice.
The apprenticeship levy is certainly making my company think about our recruitment strategy. We've often taken on apprentices at 16 but now looking at other options as well.

[Loopyloulou]

It might be a Ponzi scheme, but I don't think the taxpayer (other than the student) will end up suffering here.

The Student Loans Company sells the debt on to private investors. The private investors know that repayment is uncertain, and will not always materialise, and price the amount they will pay the SLC for the debt accordingly. They do, of course, pay more for debt at 6% compound than they would for debt at 3% simple, so the SLC (ie taxpayer) gets more money for the debt than we otherwise might, but ultimately the private investors are picking up the risk, not the taxpayer. It reminds me a little of subprime mortgages.

[SteveDH]

As an aside does anyone remember this..

There is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden.

When he said it I thought the last thing we want is to 'lengthen the period of paying it off'.

Thats one of the things I'm worried about, although I think if someone tried to do that there would be a massive outcry..

[ToadMum]

As an aside does anyone remember this..

There is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden.

When he said it I thought the last thing we want is to 'lengthen the period of paying it off'.

Thats one of the things I'm worried about, although I think if someone tried to do that there would be a massive outcry..

I tend to switch off a bit at anything JC related. Are you taking him out of context there, or is it actually an example of him not understanding the bit about remaining debt getting wiped out after 30 years?