Student Debt

[I'm With Stupid]

It was a considerable while ago, I am no spring chicken. However I know of 2 young families who moved to Canada because of the skills they had.

Also my eldest is doing a stint in Norway right now, it's not all about degrees mate.

Obviously you typically need recognised qualifications and/or experience that might not be a degree to get hired and qualify for a visa (my sister had to redo all of her UK qualifications in Canada to get a long-term visa, but was able to get one without a degree), but in many countries, it genuinely is a prerequisite. Certainly in the three countries I've worked in and every other one I've applied for. Pretty much anywhere in Asia for a start with the exception of things like working holiday visas and other things aimed at young adults where you're on some farm picking fruit or something.

Anyway, what I would say about our spiralling university debt and costs is 'how do Germany manage it?' Genuine question btw. Whenever something seems inevitable, like the idea that we can't afford to send so many students to university, I have to ask myself why are so many other countries able to do what we apparently can't? Perhaps our degrees genuinely are just that much more expensive? Or maybe they just prioritise things better.

 

[Silva Citizen]

Obviously you typically need recognised qualifications and/or experience that might not be a degree to get hired and qualify for a visa (my sister had to redo all of her UK qualifications in Canada to get a long-term visa, but was able to get one without a degree), but in many countries, it genuinely is a prerequisite. Certainly in the three countries I've worked in and every other one I've applied for. Pretty much anywhere in Asia for a start with the exception of things like working holiday visas and other things aimed at young adults where you're on some farm picking fruit or something.

Anyway, what I would say about our spiralling university debt and costs is 'how do Germany manage it?' Genuine question btw. Whenever something seems inevitable, like the idea that we can't afford to send so many students to university, I have to ask myself why are so many other countries able to do what we apparently can't? Perhaps our degrees genuinely are just that much more expensive? Or maybe they just prioritise things better

AI - google (cos I don’t know)
In Germany, most public universities offer tuition-free education for both domestic and international students for bachelor's and most master's degree programs. Students at public universities typically only pay a semester contribution, which usually ranges from €150 to €350, to cover administrative costs. Private universities, however, set their own tuition fees, which can range from €2,000 to €4,000 per semester, and potentially higher for some programs

 

[bluemcr]

Where? It's pretty difficult to do nowadays, at least for anywhere reputable with proper visas in place. Even developing countries will almost always ask for one.

I lived in Holland for 8 years. I had no intention of staying i was just visiting a mate for a few weeks and didn't come back lol I got my work visa there and went to a college after work to learn the language.

 

[denislawsbackheel]

33% of people over 16in the UK have a degree now, they are going to have to manufacture a super degree to sift out candidates for the good jobs.

No you don’t.
You know as well as everyone else on here some universities’ degrees aren’t worth the paper they are written on.
There’s your first sift.

 

[meltonblue]

Doesn’t mean I’m not allowed to be salty!

Will be >£100k poorer than if I’d been born a year earlier. And it’s only getting worse for the newer students.

Only because you’re not paying it off quicker though.

Personally I used to advocate for the abolishment of fees entirely. It’s not tenable with the university system nowadays though.

My sons at uni, my daughters decided not to go and I think they’ve both made the right decisions for their situations. Plenty that are at my son’s uni really probably shouldn’t be.

 

[meltonblue]

33% of people over 16in the UK have a degree now, they are going to have to manufacture a super degree to sift out candidates for the good jobs.

They essentially already do, lots of graduate schemes only accept from a Russell Group uni, others will only accept firsts.

 

[Silva Citizen]

No you don’t.
You know as well as everyone else on here some universities’ degrees aren’t worth the paper they are written on.
There’s your first sift.

So our government have sold finance to students registering for degrees that their education system is offering that are not worth the paper they are written on - Surely that is tantamount to fraud ?

 

[tweety]

i think back to when I was 18 and went to university in the early 80s I really hadn't a clue about much. So asking the kids of today to make life affecting financial decisions which will be them for the rest of their lives is out of order.

 

[stablemcfc]

Why would you not just pay it off in a year if you're on that sort of money?

Relatively recent big jump in salary so it previously hasn't been possible, but overpaying is certainly something I need to consider going forwards given the interest rate.

Only because you’re not paying it off quicker though.

Personally I used to advocate for the abolishment of fees entirely. It’s not tenable with the university system nowadays though.

My sons at uni, my daughters decided not to go and I think they’ve both made the right decisions for their situations. Plenty that are at my son’s uni really probably shouldn’t be.

As far as I recall the interest starts whilst you're at uni, before you even start earning to be able to pay it off. And most people out of uni won't be on good enough salaries (me included) to outpay the rise due to interest, or have enough spare to even consider paying it back quicker when you have things such as saving for house deposit, getting a car etc. to get your life going.

I'm now at a stage when I can consider paying it off more quickly, but it will still have cost me close to £100k even if I pay it off as a lump payment now - I appreciate I'm in a well paid job and fortunate position, so for most people it will take even longer (if they ever pay it off), so I don't think paying it off quicker is a realistic solution for many people.

 

[meltonblue]

Relatively recent big jump in salary so it previously hasn't been possible, but overpaying is certainly something I need to consider going forwards given the interest rate.

As far as I recall the interest starts whilst you're at uni, before you even start earning to be able to pay it off. And most people out of uni won't be on good enough salaries (me included) to outpay the rise due to interest, or have enough spare to even consider paying it back quicker when you have things such as saving for house deposit, getting a car etc. to get your life going.

I'm now at a stage when I can consider paying it off more quickly, but it will still have cost me close to £100k even if I pay it off as a lump payment now - I appreciate I'm in a well paid job and fortunate position, so for most people it will take even longer (if they ever pay it off), so I don't think paying it off quicker is a realistic solution for many people.

I agree, I was talking solely about you if your monthly payments are what they are.

That’s either an absurd pay rise or you should have been overpaying for years.

The other argument would be if you are earning that then it’s probably a good argument for a graduate tax, which is essentially what the student loan is.

Relatively wise, I really wouldn’t feel as salty as others should if I was you, it just is what it is and ultimately you’ve benefited from it.

 

[stablemcfc]

I agree, I was talking solely about you if your monthly payments are what they are.

When did you finish uni?

I said I’ll be >£100k poorer and you suggested that is because I’m not paying it off quicker.

But this isn’t realistic for me, or indeed the vast majority, as you’d need to earn something like £80k/year I believe on a £70k plan 2 student loan debt (which mine was) at 7% interest to even break even in keeping your debt at £70k (and even then you’re £5k paid with £70k to go) almost no one will achieve that straight from uni (myself included) and as such the debt inevitably gets bigger rather than sitting at £70k.

If you don’t then pay it off within around 5 years you’re going to be over that £100k mark already.

I’m around 8 years out from uni.

And in response to your edit, yes a new big rise, little prospect of notably overpaying on previous salaries. Agree that it’s now something to target.

 

[meltonblue]

I said I’ll be >£100k poorer and you suggested that is because I’m not paying it off quicker.

But this isn’t realistic for me, or indeed the vast majority, as you’d need to earn something like £80k/year I believe on a £70k plan 2 student loan debt (which mine was) at 7% interest to even break even in keeping your debt at £70k (and even then you’re £5k paid with £70k to go) almost no one will achieve that straight from uni (myself included) and as such the debt inevitably gets bigger rather than sitting at £70k.

If you don’t then pay it off within around 5 years you’re going to be over that £100k mark already.

I’m around 8 years out from uni.

Unless you overpay it as well, which was my point, which given your current monthly payments unless you’ve had an incredible pay rise recently, I’d have been doing a long time before.

If I’d finished uni nowadays and was earning 50k soon after I’d absolutely be overpaying from day one, unless you were able to invest elsewhere and get better interest from it than the repayment interest rate.

Your monthly payments suggest a wage that is such a leap that surely you should have been overpaying before is my point.

 

[stablemcfc]

Unless you overpay it as well, which was my point, which given your current monthly payments unless you’ve had an incredible pay rise recently, I’d have been doing a long time before.

If I’d finished uni nowadays and was earning 80k soon after I’d absolutely be overpaying from day one, unless you were able to invest elsewhere and get better interest from it than the repayment interest rate.

Yes a valid point, and I don’t disagree it’s possible. Just unrealistic for reasons outlined previously.

Also easy to say you’d overpay it, and maybe you would, but recall your life post uni, nothing to your name, needing to save for a deposit and a car whilst paying rent - overpaying student loan is a low priority for most people in those early years (I at least never heard of any of my friends/colleagues doing this!).

 

[meltonblue]

Yes a valid point, and I don’t disagree it’s possible. Just unrealistic for reasons outlined previously.

Also easy to say you’d overpay it, and maybe you would, but recall your life post uni, nothing to your name, needing to save for a deposit and a car whilst paying rent - overpaying student loan is a low priority for most people in those early years (I at least never heard of any of my friends/colleagues doing this!).

I was probably on £30k out of uni and doubt I ever passed £80k until this year!

Ah I assumed given your monthly payments now that you were on a higher salary previously. If you’ve only passed 80k this year and are also now paying the monthly payments you are then that’s an incredible pay rise.

Fair play, that’s not the norm either!

Does prove the point that a graduate tax is probably needed nowadays though ;)

 

[inbetween]

Unless you overpay it as well, which was my point, which given your current monthly payments unless you’ve had an incredible pay rise recently, I’d have been doing a long time before.

If I’d finished uni nowadays and was earning 50k soon after I’d absolutely be overpaying from day one, unless you were able to invest elsewhere and get better interest from it than the repayment interest rate.

Your monthly payments suggest a wage that is such a leap that surely you should have been overpaying before is my point.

Saw this thread so thought I'd look at my latest statement.

£26k owed, £2248 paid via PAYE last year but £1550 was added in interest so I only reduced my balance by £700.

At this rate it'll take 35 years to pay mine off and I left uni over 10 years ago. I'm on over £50k per year so I'll be paying far more than most. I'll also hit 65 long before that 35 years where then it'll be written off.

I'm on the older plan so kids nowadays will owe at least 3x more so the vast majority will never pay them off. I wonder if the treasury amortises the loans? If not it's an absolute monumental ticking timebomb, tens of billions.

 

[meltonblue]

Does kind of prove my point that you’re actually an argme

Saw this thread so thought I'd look at my latest statement.

£26k owed, £2248 paid via PAYE last year but £1550 was added in interest so I only reduced my balance by £700.

At this rate it'll take 35 years to pay mine off and I left uni over 10 years ago. I'm on over £50k per year so I'll be paying far more than most. I'll also hit 65 long before that 35 years where then it'll be written off.

I'm on the older plan so kids nowadays will owe at least 3x more so the vast majority will never pay them off. I wonder if the treasury amortises the loans? If not it's an absolute monumental ticking timebomb, tens of billions.

Again, will depend over that time if you can invest and get better interest than the debt interest and/or overpay.

 

[I'm With Stupid]

I said I’ll be >£100k poorer and you suggested that is because I’m not paying it off quicker.

But this isn’t realistic for me, or indeed the vast majority, as you’d need to earn something like £80k/year I believe on a £70k plan 2 student loan debt (which mine was) at 7% interest to even break even in keeping your debt at £70k (and even then you’re £5k paid with £70k to go) almost no one will achieve that straight from uni (myself included) and as such the debt inevitably gets bigger rather than sitting at £70k.

If you don’t then pay it off within around 5 years you’re going to be over that £100k mark already.

I’m around 8 years out from uni.

And in response to your edit, yes a new big rise, little prospect of notably overpaying on previous salaries. Agree that it’s now something to target.

Martin Lewis did a show on this. Basically, if you earn fuck all out of uni, you don't pay much back because you never pay it off and your payments are lower, and if you earn a shitload out of uni you don't pay as much because you pay it quickly enough to not earn interest. And there's a sweet spot in the middle where you get absolutely screwed, spending your whole working life paying it off and it gets to just about zero as the payment term finishes.

 

[I'm With Stupid]

Again, will depend over that time if you can invest and get better interest than the debt interest and/or overpay.

That used to be the advice when they effectively had no interest. Never pay more than you legally have to. But these days, I'm not sure there are many ways to reliably get a higher rate of return on your savings than the interest on a student loan. It still probably makes sense to not overpay if it's going to, for example, prevent you from getting a deposit together for a mortgage.

 

[stablemcfc]

Martin Lewis did a show on this. Basically, if you earn fuck all out of uni, you don't pay much back because you never pay it off and your payments are lower, and if you earn a shitload out of uni you don't pay as much because you pay it quickly enough to not earn interest. And there's a sweet spot in the middle where you get absolutely screwed, spending your whole working life paying it off and it gets to just about zero as the payment term finishes.

Absolutely. And for most high earners they won’t just immediately become a high earner, they’ll sit in that middle zone for a period of time where they pay a lot without impacting the actual debt.

As you say a salary that peaks and stays in that zone is worst case scenario

 

[Kompany Car]

33% of people over 16in the UK have a degree now, they are going to have to manufacture a super degree to sift out candidates for the good jobs.

Having a degree per se is not the important part, its having a useful and relevant degree. Without going down the rabbit hole of what is and isnt a mickey mouse degree, its fair to say not all degrees are valued equally by employers.

The new bar for the best candidates is having a masters degree from a top university and on the route to being chartered. Once you have been working for 5-6yrs, for the best paying roles being chartered is almost mandatory. Once you get beyond that being a fellow of an institution, which pretty much means you are nationally and in some cases internationally recognised in your field.