//
you're reading...
News, Student Debt

“‘Don’t be frightened by your £70,000 student debt… it’s just a lifetime of payments’: Outrage at flippancy of universities minister”

Students forced to borrow tens of thousands of pounds to pay tuition fees should think of the money as a tax rather than ‘debt around their necks’, the universities minister said yesterday.

David Willetts said youngsters put off going to university by fees of up to £9,000 a year were wrong to think of student loans as being like credit-card debt because they would not have to repay any money until they earned above £21,000.

Instead, he urged them to think of the £70,000 they could end up owing, taking in living expenses and interest on their loans, as a ‘flow of payments over a lifetime’.

Figures show university applications are down 12 per cent on this time last year.

Sally Hunt, general secretary of the University and College Union, said: ‘If the minister is insistent on calling this a tax, he should call it a tax on learning and ambition.’

Sally Hunt, general secretary of the University and College Union, said: ‘From next year England will be the most expensive place in world in which to study at a public university.

‘Mr Willetts’ comments are a blatant attempt to try and find an acceptable name for fleecing students and the state abdicating its responsibilities for our young people.

‘If the minister is insistent on calling this a tax then he should call it a tax on learning and ambition.’

 

More…

 

Meanwhile, there are widespread fears that those who are saddled with the increased debt will later struggle, or find it impossible, to afford the monthly repayments for a mortgage or pension, or both, alongside the loan repayments.

HOW THE FIGURES BREAK DOWN

For a three year course a student will pay £27,000 on tuition fees of up to £9,000 a year.

Away from London a maximum loan of £5,500 is available compared with £6,750 in the capital making the possible amount paid back in maintenance loans £20,250.

The total, therefore is £47,250, but over the 30 year life of the debt it would quickly accumulate to £70,000, or possibly even more.

Students starting a degree in 2012 are expected to graduate with total debt (taking into account accommodation and living costs) of around £70,000. This compares to the current £29,000, with fees of £3,275.

Once their earnings reach the £21,000 threshold, they will start repaying 9per cent of their earnings.

They will be repaying a commercial rate of interest – RPI plus 3 per cent – which is greater than some High Street banks offer. As a result many will end up paying back £70,000.

Under the current system, repayments kick in once an annual income of £15,000 is reached.

In addition, the fees will be written off after 30 years – five years later than under the current system.

Mr Willetts has admitted many low earners will be unable to repay the full amount. He is also considering a mechanism to allow the very wealthiest to repay the full amount in one lump sum, avoiding hefty interest charges.

Sally Hunt from University and College Union said England is the most expensive place to receive higher educationSally Hunt from University and College Union said England is the most expensive place to receive higher education

The combination of this is that the middle class, with earnings of around £25,000, will bear the brunt – they will pay more interest and they will pay for longer.

Mr Willetts, the architect of the new tuition fees system, was staunch in his defence of the £70,000 ‘loan’, despite belonging to a Government frequently warning about the irresponsibility of debt.

He said: ‘We’re trapped in this language of debt. It’s not like leaving with £25,000 on your credit card or something. If someone said your child was leaving university with £25,000 on a credit card, you’d be quite rightly horrified.

‘If someone said they’re leaving university and during their working lives they’re going to pay half a million pounds of income tax, you’d be completely relaxed.

‘And our graduate repayment scheme is closer to – it’s not exactly the same – but it’s closer to the income tax end of the scale than the credit card end of the scale.

‘It’s a graduate repayment scheme that has many of the features of income tax. It’s not like some debt around their necks.’

Mr Willetts said that teens should not be ‘frightened’ at the prospect of repaying £70,000.

Read more: http://www.dailymail.co.uk/news/article-2064364/Outrage-flippancy-universities-minister-David-Willetts.html#ixzz1f1RSzAMD

Advertisements

Discussion

16 thoughts on ““‘Don’t be frightened by your £70,000 student debt… it’s just a lifetime of payments’: Outrage at flippancy of universities minister”

  1. debt consolidation Thanks for the useful post. Have you ever considered debt consolidation?

    Posted by loan consolidation | 30/11/2011, 7:30 pm
  2. baby shower favor
    Hi there! Someone in my Myspace group shared this website with us so I came to take a look. I’m definitely loving the information. I’m bookmarking and will be tweeting this to my followers! Superb blog and superb design and style. baby shower favor

    Posted by baby shower favor | 05/12/2011, 7:24 am
  3. Somebody necessarily assist to make severely articles I would state. That is the very first time I frequented your web page and so far? I surprised with the research you made to create this particular put up extraordinary. Great activity!

    Posted by I'm looking for more information about online computer science degree | 07/12/2011, 7:55 pm
  4. It’s the best time to make some plans for the future and it is time to be happy. I’ve learn this submit and if I could I wish to suggest you some fascinating issues or suggestions. Perhaps you could write subsequent articles referring to this article. I wish to read more things about it!

    Posted by I'm looking for more information about home correspondence classes | 07/12/2011, 9:13 pm
  5. Attractive element of content. I simply stumbled upon your web site and in accession capital to say that I acquire actually enjoyed account your blog posts. Any way I’ll be subscribing on your augment or even I achievement you get admission to persistently rapidly.

    Posted by lucrare dizertatie | 10/12/2011, 1:05 am
  6. I am extremely impressed along with your writing talents as neatly as with the format in your blog. Is that this a paid subject matter or did you customize it yourself? Anyway keep up the excellent high quality writing, it is uncommon to look a nice blog like this one these days..

    Posted by student debt releifs | 10/12/2011, 7:06 am
  7. Its like you learn my mind! You appear to grasp a lot approximately this, like you wrote the book in it or something. I believe that you just can do with a few p.c. to pressure the message home a bit, however instead of that, that is wonderful blog. An excellent read. I’ll certainly be back.

    Posted by refinance services, bad credit ok refi, bad credt refi service, bad credit OK refinance, bank rates, best rates on a refinance, refinance today, best refi | 10/12/2011, 1:45 pm
  8. Wonderful work! This is the kind of info that are meant to be shared across the internet. Shame on the search engines for no longer positioning this publish higher! Come on over and talk over with my website . Thanks =)

    Posted by pa zg | 15/12/2011, 5:40 am
  9. I got what you wish, thanks for putting up. Woh I am happy to gain this website finished google. Thanks For Share “‘Don’t be frightened by your £70,000 student debt… it’s just a lifetime of payments’: Outrage at flippancy of universities minister” universitydebt.

    Posted by LA Weig | 15/12/2011, 12:57 pm
  10. I got what you wish, thanks for swing up. Woh I am willing to happen this website through google. Thanks For Share “‘Don’t be frightened by your £70,000 student debt… it’s just a lifetime of payments’: Outrage at flippancy of universities minister” universitydebt.

    Posted by In Vee | 16/12/2011, 4:18 pm
  11. I got what you plan, thanks for putting up. Woh I am gladsome to chance this website finished google. Thanks For Share “‘Don’t be frightened by your £70,000 student debt… it’s just a lifetime of payments’: Outrage at flippancy of universities minister” universitydebt.

    Posted by invest liberty reserve | 17/12/2011, 11:09 am
  12. I love your wordpress template, where did you download it from?

    Posted by bankruptcy,bankruptcy alternatives,debt settlement,debt,debt negotiation | 18/12/2011, 12:46 am
  13. Thank you, I have just been looking for information about this topic for a while and yours is the best I’ve found out so far. However, what in regards to the bottom line? Are you positive concerning the source?|What i do not understood is if truth be told how you’re no longer actually much more well-preferred than you may be now. You are very intelligent.

    Posted by SBI Personal Loan | 20/12/2011, 9:42 pm
  14. I think that is among the so much significant information for me. And i’m happy reading your article. However wanna remark on few general issues, The website taste is great, the articles is really excellent :D. Excellent task, cheers.

    Posted by Whitley Weider | 21/12/2011, 11:46 am
  15. Excellent site you have here but I was curious if you knew of any community forums that cover the same topics discussed here? I’d really like to be a part of community where I can get advice from other experienced people that share the same interest. If you have any recommendations, please let me know. Many thanks!

    Posted by sohila zadran | 19/06/2013, 12:40 am
  16. In this article, all of us can talk about just how these kind of
    indicators make a difference to read more investing along with the
    best way to reap the benefits of these economic impulses.
    This course on the market can inevitably figure out which in
    turn celebration will be the safe bet, and what kind may in fact eliminate his
    or her preliminary purchase. To give an example, if the tough goods record is constructive, you might want to
    buy read more in organizations like Boeing or perhaps equivalent corporations
    that induce significant industrial products. read more provides you with
    the actual flexibility for you to business and also
    the independence to help earn with its program.

    Posted by read more | 29/06/2013, 2:56 am

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: