Don’t worry! It’s only for families who are too poor too bank roll their kids education! We don’t need to worry about them!!! /s
Is that not the point? The Plan 2 loans are meant to act in multiple ways: deter poorer students from going in the first place and making it so that those of us who can just about afford university are indebted for life. The loan system is not about helping students pay for university anymore and this has hardly been a secret.
To those thinking that Martin has had a change of tact. I found this article from 2019 where Martin called Plan 2 effectively a tax.
The problem isn’t that graduates are being made to pay for the own further education. That’s absolutely fair.
The system before had the lowest paid people in society paying taxes to cover the costs of educating higher paid workers, which was wrong.
The problem is that because student loans aren’t a tax, rich people can avoid paying as much as middle income people by paying off their debt early.
It’s the interest on the loan that makes the current system regressive, when a person on an average income has no hope of ever clearing their debt.
The Government should have just implemented an actual graduate tax that was banded based on income.
The Conservative Party as the party of high-tax and poor public services is what will follow them now for a generation.
A graduate tax that graduates don’t pay unless their DOB is before a certain date isn’t a graduate tax. It’s a young people tax.
The tories dont want an educated UK. For they would never be in power if this was the case.
Time to start calling the mortgage “Lifelong house tax” /s
>The Government has announced that it will lower the student loan repayment threshold from £27,295 a year to £25,000.
At the same time, the term over which graduates have to continue paying back their loan will be increased to 40 years. Currently, outstanding student debt is written off by the Government after 30 years.
The longer repayment term will come into effect for students starting courses from September 2023, with the lower salary threshold hitting graduates from 2026-27.
So let me get this straight. These changes are only for those that are joining uni from Sept onwards? So if you have graduated recently/graduating soon, you will be ok from the threshold dropping from 27 to 25k
I needed a degree to get my job, but quite frankly think I’m terms of the value it generated it was not worth it. I would urge others younger people to seriously consider apprenticeships where possible, as had to pay £100 student loan this month which is ridiculous.
I’m not sure I understand the issue here – the loan payback has been changed to 40 years instead of 30… so how are you paying more money per week? You can choose to overpay and get it cleared in 30 if you want?
Linking interest rates to RPI seems a sensible move that means you don’t pay back more than you borrow in real terms.
Lowering the payback threshold by a couple of grand isn’t great for those affected, but keeping the threshold static year on year is effectively increasing it in real terms.
I think the bigger issue is the cost of tuition. As only 50% were going to be repaying the entire loan within their 30 years, for half of the people it meant that there was no difference at all between 3K or 9k. It may aswell have been 100k.
When they operate as a business first, there will be a greater push by them for courses that cost less. They’ll favour the higher paying international students. It’s crazy how in covid times, Bristol University was chartering private jets to fly students in because the airlines wouldn’t under the pandemic restrictions of the time.
Taxed to the bare bones
Home ownership not a realistic possibility
Rents and bills increasing
War beckons
Remote working the norm marking the end of hospitality and the high street
Indeed.
Essentially it only effects people who are under 18 at this moment so can’t vote against the Tories.
The Loan system ensures graduated are endebted for life, and now have to pay back those loans earlier, and at a lower threshold, further crippling their chance of saving for things like a house.
Its a multi edged attack on Education
Something I don’t get about these loans is that they feel like the government cooking their books.
I went to Uni after the tutition hike and I’m not earning a bad wage at the moment (R&D / tech. sector), but the amount I’m requested to pay back doesn’t even cover the monthly interest.
They change the interest rates as they please, causing the debt to rocket from an already crazy value, when there is not really a high probability for us pay the loan off let alone the interest. So what is the point of the interest then? Makes the loans look like a rocketing asset when it really isn’t.
Or as I call it, the continuing cycle of indentured servitude.
So will this affect those with current outstanding student loans or just new students?
Costs the tax payer more to keep this shit show going. Just replace it with a 30 year tax or make it free with conditions. And before you whine about paying it. Graduates design your shoes, make your TV and save your life etc… So just shut the fuck up and pay for what you need.
It’s still better than early Plan 1! Our loans aren’t written off until we’re 65 and the repayment threshold is under £20k.
They want to stop people gaining qualifications so they have “less educated” opposition in the future. Can spin the whole “they didn’t even go to university”. Keeping the politics to the upper class and keeping the working class out of it.
But it will only be a lifelong graduation tax for the *poor*.
They want to keep people out of education. More educated people are left wing, so there’s little incentive for an educated populace to the Tories
The max thing is if they didn’t literally triple the cost of tuition 10 years ago I don’t think many would bat an eyelid. But when the fees now at the point of a down payment on a home it becomes a kick in the teeth to potentially be paying it off for your entire working life, or atleast the vast majority of it. Sure it won’t be the majority but it will be a notable amount, crippled by a system that they thought would give them a better life.
I’m going to be 40 years old an a few weeks. I still don’t earn enough money per year to even start paying my student loan off. Every year or so they send me a letter telling me how much interest it’s gone up by, and explaining that because of my income, I don’t have to pay anything back yet.
I’ll die with that debt.
Just make the interest = bank of England interest rate
Does this mean that I will be under a different plan for my fourth year of uni?
Or will I be fine
That’s already exactly what it is. As broken as the student loans system is, one good (bad?) thing about it is that increasing the individual debt burden has literally no effect on anything, because you’ll be paying the same regular instalments for the same period of time regardless.
Not only that but the total amount payed back over a lifetime is equivalent to the average amount that a degree boosts career earnings by
This is going to pave the way for increasing tuition fees.
What’s the issue? It might focus the minds if you’ll be paying back the loans you used to get pissed and to get that degree you’ve never used when you’re in your 60s
37 comments
The key thing to remember is that they will never introduce an actual tax because then rich people would need to pay it.
From the man that said students loan repayments wasn’t a tax….
But Martin, that’s the aim. Tax the people who don’t vote for you. It won’t affect polling. Easy peasy.
It’s clear the lower class has just become too educated at this point. Back to work!
He also said he would riot in the street if they messed around with it when they first introduced this way of paying back
https://mobile.twitter.com/martinslewis/status/616962567429300224
Don’t worry! It’s only for families who are too poor too bank roll their kids education! We don’t need to worry about them!!! /s
Is that not the point? The Plan 2 loans are meant to act in multiple ways: deter poorer students from going in the first place and making it so that those of us who can just about afford university are indebted for life. The loan system is not about helping students pay for university anymore and this has hardly been a secret.
To those thinking that Martin has had a change of tact. I found this article from 2019 where Martin called Plan 2 effectively a tax.
https://www.belfastlive.co.uk/news/moneysavingexpert-martin-lewis-says-repaying-16366734
I recall it going back further than that though.
The problem isn’t that graduates are being made to pay for the own further education. That’s absolutely fair.
The system before had the lowest paid people in society paying taxes to cover the costs of educating higher paid workers, which was wrong.
The problem is that because student loans aren’t a tax, rich people can avoid paying as much as middle income people by paying off their debt early.
It’s the interest on the loan that makes the current system regressive, when a person on an average income has no hope of ever clearing their debt.
The Government should have just implemented an actual graduate tax that was banded based on income.
The Conservative Party as the party of high-tax and poor public services is what will follow them now for a generation.
A graduate tax that graduates don’t pay unless their DOB is before a certain date isn’t a graduate tax. It’s a young people tax.
The tories dont want an educated UK. For they would never be in power if this was the case.
Time to start calling the mortgage “Lifelong house tax” /s
>The Government has announced that it will lower the student loan repayment threshold from £27,295 a year to £25,000.
At the same time, the term over which graduates have to continue paying back their loan will be increased to 40 years. Currently, outstanding student debt is written off by the Government after 30 years.
The longer repayment term will come into effect for students starting courses from September 2023, with the lower salary threshold hitting graduates from 2026-27.
So let me get this straight. These changes are only for those that are joining uni from Sept onwards? So if you have graduated recently/graduating soon, you will be ok from the threshold dropping from 27 to 25k
I needed a degree to get my job, but quite frankly think I’m terms of the value it generated it was not worth it. I would urge others younger people to seriously consider apprenticeships where possible, as had to pay £100 student loan this month which is ridiculous.
I’m not sure I understand the issue here – the loan payback has been changed to 40 years instead of 30… so how are you paying more money per week? You can choose to overpay and get it cleared in 30 if you want?
Linking interest rates to RPI seems a sensible move that means you don’t pay back more than you borrow in real terms.
Lowering the payback threshold by a couple of grand isn’t great for those affected, but keeping the threshold static year on year is effectively increasing it in real terms.
I think the bigger issue is the cost of tuition. As only 50% were going to be repaying the entire loan within their 30 years, for half of the people it meant that there was no difference at all between 3K or 9k. It may aswell have been 100k.
When they operate as a business first, there will be a greater push by them for courses that cost less. They’ll favour the higher paying international students. It’s crazy how in covid times, Bristol University was chartering private jets to fly students in because the airlines wouldn’t under the pandemic restrictions of the time.
Taxed to the bare bones
Home ownership not a realistic possibility
Rents and bills increasing
War beckons
Remote working the norm marking the end of hospitality and the high street
Indeed.
Essentially it only effects people who are under 18 at this moment so can’t vote against the Tories.
For a great counterpoint view on why the “graduate tax” analogy is really a quite misleading one, see this post from a couple years ago on the UK personal finance sub: [https://www.reddit.com/r/UKPersonalFinance/comments/huttwz/uk_student_loans_are_not_a_graduate_tax_and_its_a/](https://www.reddit.com/r/UKPersonalFinance/comments/huttwz/uk_student_loans_are_not_a_graduate_tax_and_its_a/)
The Loan system ensures graduated are endebted for life, and now have to pay back those loans earlier, and at a lower threshold, further crippling their chance of saving for things like a house.
Its a multi edged attack on Education
Something I don’t get about these loans is that they feel like the government cooking their books.
I went to Uni after the tutition hike and I’m not earning a bad wage at the moment (R&D / tech. sector), but the amount I’m requested to pay back doesn’t even cover the monthly interest.
They change the interest rates as they please, causing the debt to rocket from an already crazy value, when there is not really a high probability for us pay the loan off let alone the interest. So what is the point of the interest then? Makes the loans look like a rocketing asset when it really isn’t.
Or as I call it, the continuing cycle of indentured servitude.
So will this affect those with current outstanding student loans or just new students?
Costs the tax payer more to keep this shit show going. Just replace it with a 30 year tax or make it free with conditions. And before you whine about paying it. Graduates design your shoes, make your TV and save your life etc… So just shut the fuck up and pay for what you need.
It’s still better than early Plan 1! Our loans aren’t written off until we’re 65 and the repayment threshold is under £20k.
They want to stop people gaining qualifications so they have “less educated” opposition in the future. Can spin the whole “they didn’t even go to university”. Keeping the politics to the upper class and keeping the working class out of it.
But it will only be a lifelong graduation tax for the *poor*.
They want to keep people out of education. More educated people are left wing, so there’s little incentive for an educated populace to the Tories
The max thing is if they didn’t literally triple the cost of tuition 10 years ago I don’t think many would bat an eyelid. But when the fees now at the point of a down payment on a home it becomes a kick in the teeth to potentially be paying it off for your entire working life, or atleast the vast majority of it. Sure it won’t be the majority but it will be a notable amount, crippled by a system that they thought would give them a better life.
I’m going to be 40 years old an a few weeks. I still don’t earn enough money per year to even start paying my student loan off. Every year or so they send me a letter telling me how much interest it’s gone up by, and explaining that because of my income, I don’t have to pay anything back yet.
I’ll die with that debt.
Just make the interest = bank of England interest rate
Does this mean that I will be under a different plan for my fourth year of uni?
Or will I be fine
That’s already exactly what it is. As broken as the student loans system is, one good (bad?) thing about it is that increasing the individual debt burden has literally no effect on anything, because you’ll be paying the same regular instalments for the same period of time regardless.
Not only that but the total amount payed back over a lifetime is equivalent to the average amount that a degree boosts career earnings by
This is going to pave the way for increasing tuition fees.
What’s the issue? It might focus the minds if you’ll be paying back the loans you used to get pissed and to get that degree you’ve never used when you’re in your 60s