Sunderland uni tuition fees announced


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Yes, but there's still the money the graduate has failed to pay back and that hole is still missing. The interest rates only ensure the loaned out money does not devalue in market terms. Given the Unis have headed towards top whack in their demands (if they looked at cutting waste, they wouldn't have to charge these ridiculous fees), there's going to be a considerable gap due to more graduates failing to pay back.

I don't see increased tax (on top of the loans) from increased wages being sufficient to cover this. Anyone care to do some maths on this?

As sad as this is I've just tested a few things on excel and made a chart based on the following:

Starting salary of £18,000
Student Loans debt of £25,000
Salary increase of 10% per annum for the first 5 years
Salary increase of 5% per annum beyond year 6.
Inflation of 4% per annum making the interest payable 7% per annum(i.e. inflation plus 3%)

I think the salary increases are fairly modest and if anyone wants to compare the results with different assumptions let me know, it'll only take 30 seconds to get a new chart.

Anyway, here's the one based on the above.

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Are the government pegging the repayment threshold to some relevent real-terms value, or are we just trusting them that it won't be reduced at some point because 'drastic measures are needed'?
 
Are the government pegging the repayment threshold to some relevent real-terms value, or are we just trusting them that it won't be reduced at some point because 'drastic measures are needed'?

What do you mean?

This from the University of Leeds. The government is also awarding grants of £3,250 to the poorest students and they do not have to be repaid.

How much will I repay, how and when?

You will only start to repay your tuition and maintenance loan after you have left higher education and are earning at least £21,000. This £21,000 threshold will increase in line with earnings from 2016 onwards. If for any reason your income falls below £21,000 your repayments will be suspended, for example if you take maternity leave.

The amount repaid each month will depend on your earnings - repayments will be 9% of your income above £21,000.

Example
Someone earning £21,500 - currently the salary of a newly-qualified teacher - would initially make repayments of £4 per month. The monthly repayment would increase to £23 for someone earning £24,000 per year; £30 on a salary of £25,000; £45 on £27,000; and £68 on £30,000.

Making repayments
The repayments will normally be deducted automatically from your pay packet through the tax system.

Interest rates
Interest on your loan will be charged at inflation plus 3% while you are studying, and up until the April after you leave university.

From the April after you leave university if you are earning below £21,000, interest will be applied at the rate of inflation.

Graduates earning between £21,000 and £41,000 will be charged interest on a sliding scale up to a maximum of inflation plus 3%.

Graduates earning above £41,000 will be charged interest at the full rate of inflation plus 3%.

All outstanding repayments will be written off after 30 years.

Does anyone know what is meant by this?
 
Note that those values are trigger amounts based on wages before tax.
So £21,000 would actually work out at £14,280 after income tax (20%) and NI (12%) if I've my maths right.



As I said, car crash some 30 years in the future.

Your maths are fine but you forgot about the personal allowances.

I don't think the government will pay any more than they do now. They will probably pay more in fees but will reduce other funding to unis. The fact that more students are going to uni than ever before will obviously cause funding issues.
 
average wage on wearside is 15k??

and is that right you dont pay until you gradute? surely not

Yes it is right. You only pay after you have reached £21k, and this level will increase. The payments are spread over many years, and at a very generous interest rate.

If a young plumber, say, wanted such a loan to complete his training and then help set up a business, he would be escorted from the premises of any bank he had the nerve to set foot on with such a mad idea.

The loans are a blast of reality, and a consequence of the wild explosion in numbers going to university. And of course the country is close to being bankrupt.
 
Yes it is right. You only pay after you have reached £21k, and this level will increase. The payments are spread over many years, and at a very generous interest rate.

If a young plumber, say, wanted such a loan to complete his training and then help set up a business, he would be escorted from the premises of any bank he had the nerve to set foot on with such a mad idea.

The loans are a blast of reality, and a consequence of the wild explosion in numbers going to university. And of course the country is close to being bankrupt.

That may have been true in the past but I don't think the current rates are very generous.
 
Your maths are fine but you forgot about the personal allowances.

I don't think the government will pay any more than they do now. They will probably pay more in fees but will reduce other funding to unis. The fact that more students are going to uni than ever before will obviously cause funding issues.

I understand what you're saying, however, that will impact on research budgets especially and the Russell Group won't be pleased about that.

Something has to give and I still think at some point down the road, the figures won't add up. How this will be addressed I still think is being passed on to a future generation when these debts have to cancelled. The longer this goes on, the harder it will be to rectify.
 
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