Im not sure, it depends on the details but I had loans and have paid them off so I wouldn’t be happy at all at having to pay twice and I think many would agree. Unfortunately universities are incentivised to charge the maximum fees and to stack their halls to the rafters with students regardless of how good or viable the degree is. If this goes ahead we need a new system one where it’s likely less people go to university but that we have other good training on offer and universities go back to how they were 30 years ago.
wkavinsky on
It’s already a graduate tax.
Also, sounds like they want high earning PAYE piggies to continue to pay after clearing the loans.
Changing the deal after the fact is **not** OK.
Recent-Carpet-3541 on
This isn’t difficult lmao just have a fixed interest rate. How is this even a debate?
Kandiru on
They should just cap the interest to half your repayments. That way you can at least make progress on paying off your loan, even if you will never repay it.
YorkistRebel on
I could probably afford to pay my son’s off upfront, which when it’s RPI+3% seemed sensible.
My fear is I could end up adding £50k to my mortgage and then they change the system and he pays a graduate tax instead
theyau on
It wouldn’t really be a graduate tax though. It would only be on those who applied for a student loan so not boomers or those rich enough to of had their fees paid for conveniently enough.
aredddit on
Just change the interest rate so it’s linked to the interest rate on government debt. If the government can borrow money at X% there’s no reason to charge graduates more than that.
As the government likes to point out when it suits them, graduates on average earn more money. If they’re earning more then the government already receives a benefit in the form of more tax revenue.
flemva on
Just increase the repayment threshold to where it should be post inflation. Thanks
GunstarGreen on
I still pay off a bit of loan every week. Its been 19 years this summer since I graduated. I dont even know if im close to paying it off yet
TastyMarionberry9899 on
Why did they ever change it from base rate + 1%? Better than most normal loans, easier to track and admin, gives a chance for people to pay it off and it doesn’t grow exponentially vs a normal loan of the same amount surely?
odysseushogfather on
Or have degrees that benefit society (eg teachers, doctors, etc) just be free for uni students and paid by regular taxes like it used to be since those jobs benifit everyone in society. Why pay by only taxing the people studying and give a free ride to those who use doctors/teachers/etc services?
Anything of no immediate societal benifit can stay americanised and profiteered if the scope of courses exceedes the governments budget.
OctoGoggle on
Simple, fix the interest rate from now on and write off the over inflated interest accrued for those with an existing plan.
Sonchay on
If the intention is to fund through taxes, then it should be across the broadest base possible – not just service users. We don’t hammer those with long-term medical problems for extra NHS usage, we shouldn’t add extra costs to people pursuing more education if the state is funding it. (I take the same view with road taxes too, even as a non-driver).
If the intention is that students are customers and Universities are businesses, then just privatise the whole thing – including the loan element. There are enough institutions, programmes and lenders that a market with good competition can form, this isn’t like the water or rail companies. These halfway measures are the worst of both worlds and create more “losers” than beneficiaries.
ShortGuitar7207 on
Tax the intelligent, exactly how Darwinian economics ought to work. Perhaps we could also tax the good looking, the sporty or anybody else who has any form of gift or talent.
UpsetKoalaBear on
This would be worse than what we currently have.
The ONS already splits the student loan repayments into two categories:
– A lending amount which is paid off as you work.
– A grant amount which isn’t expected to be paid back and written off.
The concept is you never pay it back. They already take that into account for the budget.
Twattymcgee123 on
My nephew just looked at his statement , he’s been paying off his student loan for three years and he now owes £4000 more than when he started .
If he carried on for the 30 years , he’d have paid back £75,000 on an £18, 000 loan .
truly-dread on
Student loans. Biggest scam any country has done to their own people.
ash_ninetyone on
It already is a graduate tax, but in a way that is unsustainable.
Interest is disproportionate to the actual interest rate, and that interest gain outstrips any repayment I make
Interest this year is almost twice (£2061) what came out of my salary (£1147).
Don’t get me wrong, I was under no illusions when I went into this anyway, and I know it defacto is written off after 35 years. Admittedly when I first hit the repayment threshold at a £30k salary, I adjusted my pension sacrifice to take me back out of it. Figured an extra £100 a month for future me was better than pissing it into the void. I can’t really do that now I’m up to £51k.
I don’t expect to come close to hitting initial balance in repayments given I attended as a mature student, so that’s technically £11k that gets written off.
But it’s still wild to see my balance go from £53000 to £72000 over the course of something I finished in 2020, and it’s still unsustainable how this is set up. I think it is also wrong that they can just arbitrarily change some terms of your loan after the fact.
If you’re fortunate enough to have been able to pay your loan off (because your salary outstripped interest, or you could pay it off in full, because you were in that valley where normal payments would cost more than the loan), you should be exempt from any graduate tax. Your account is closed.
TheAlbinoAmigo on
This is a great way to further disincentivise your workforce. Love it.
How about we just forgo the theatre, give the boomers a lubed up broom handle and just tell the millennials to bend over and receive? Oh, also give each boomer £1m for ol’ times sake.
Yours truly,
One of the first millennials getting fucked by this system who accidentally snuck into the 40% tax bracket and now has a 58% marginal rate because of student loans. I’ll eventually pay off my PG but not a cats chance in ever paying off my UG.
vercingetafix on
The messed up part is freezing the repayment threshold while pensions are triple locked. What’s fit for the goose is fit for the gander!!
_Monsterguy_ on
My students loans were tiny and the deal was good –
You only started paying once were earning over 85% of the average wage,
Interest was set at the rate of inflation,
If you hadn’t paid it off within 25 years it was cancelled. If you were under 40 when you took out the loan, it was cancelled when you reached 50.
There should never have been a student loan *company*, complete madness.
hi2yrs on
The unfairness of the current system was pointed out when it was being put in place. None of this is new. There were commenters that pointed out that the system was going to fail.
fakehealer666 on
The problem with student loans is HIGH INTEREST. Drop it to zero and absorb the difference between BOE rate or make it BOE rate and keep inflation low or Cap it to the lowest BOE rate during the years of education.
JackSpyder on
The student loan system isn’t doomed. Its just plan 2.
Make all plan 2 users the Scottish plan 4 system and back date it to loan lifetime removing the egregious interest and if anyone has overpaid refund it.
Just do that. Keep repayment thresholds inflation tied and it’s fine.
throwawayinfinitygem on
Those who make higher pay due to their degree will pay more income tax automatically and those who don’t won’t. Pay for universities that way and forget fees or grad taxes. Since quality went down and degrees don’t lead to jobs, cost can be saved by cutting the number of places quite a lot (seriously, don’t spent money to pretend).
Dando_Calrisian on
If being a graduate paid what it used to then they would naturally pay more tax
26 Comments
Im not sure, it depends on the details but I had loans and have paid them off so I wouldn’t be happy at all at having to pay twice and I think many would agree. Unfortunately universities are incentivised to charge the maximum fees and to stack their halls to the rafters with students regardless of how good or viable the degree is. If this goes ahead we need a new system one where it’s likely less people go to university but that we have other good training on offer and universities go back to how they were 30 years ago.
It’s already a graduate tax.
Also, sounds like they want high earning PAYE piggies to continue to pay after clearing the loans.
Changing the deal after the fact is **not** OK.
This isn’t difficult lmao just have a fixed interest rate. How is this even a debate?
They should just cap the interest to half your repayments. That way you can at least make progress on paying off your loan, even if you will never repay it.
I could probably afford to pay my son’s off upfront, which when it’s RPI+3% seemed sensible.
My fear is I could end up adding £50k to my mortgage and then they change the system and he pays a graduate tax instead
It wouldn’t really be a graduate tax though. It would only be on those who applied for a student loan so not boomers or those rich enough to of had their fees paid for conveniently enough.
Just change the interest rate so it’s linked to the interest rate on government debt. If the government can borrow money at X% there’s no reason to charge graduates more than that.
As the government likes to point out when it suits them, graduates on average earn more money. If they’re earning more then the government already receives a benefit in the form of more tax revenue.
Just increase the repayment threshold to where it should be post inflation. Thanks
I still pay off a bit of loan every week. Its been 19 years this summer since I graduated. I dont even know if im close to paying it off yet
Why did they ever change it from base rate + 1%? Better than most normal loans, easier to track and admin, gives a chance for people to pay it off and it doesn’t grow exponentially vs a normal loan of the same amount surely?
Or have degrees that benefit society (eg teachers, doctors, etc) just be free for uni students and paid by regular taxes like it used to be since those jobs benifit everyone in society. Why pay by only taxing the people studying and give a free ride to those who use doctors/teachers/etc services?
Anything of no immediate societal benifit can stay americanised and profiteered if the scope of courses exceedes the governments budget.
Simple, fix the interest rate from now on and write off the over inflated interest accrued for those with an existing plan.
If the intention is to fund through taxes, then it should be across the broadest base possible – not just service users. We don’t hammer those with long-term medical problems for extra NHS usage, we shouldn’t add extra costs to people pursuing more education if the state is funding it. (I take the same view with road taxes too, even as a non-driver).
If the intention is that students are customers and Universities are businesses, then just privatise the whole thing – including the loan element. There are enough institutions, programmes and lenders that a market with good competition can form, this isn’t like the water or rail companies. These halfway measures are the worst of both worlds and create more “losers” than beneficiaries.
Tax the intelligent, exactly how Darwinian economics ought to work. Perhaps we could also tax the good looking, the sporty or anybody else who has any form of gift or talent.
This would be worse than what we currently have.
The ONS already splits the student loan repayments into two categories:
– A lending amount which is paid off as you work.
– A grant amount which isn’t expected to be paid back and written off.
The concept is you never pay it back. They already take that into account for the budget.
My nephew just looked at his statement , he’s been paying off his student loan for three years and he now owes £4000 more than when he started .
If he carried on for the 30 years , he’d have paid back £75,000 on an £18, 000 loan .
Student loans. Biggest scam any country has done to their own people.
It already is a graduate tax, but in a way that is unsustainable.
Interest is disproportionate to the actual interest rate, and that interest gain outstrips any repayment I make
Interest this year is almost twice (£2061) what came out of my salary (£1147).
Don’t get me wrong, I was under no illusions when I went into this anyway, and I know it defacto is written off after 35 years. Admittedly when I first hit the repayment threshold at a £30k salary, I adjusted my pension sacrifice to take me back out of it. Figured an extra £100 a month for future me was better than pissing it into the void. I can’t really do that now I’m up to £51k.
I don’t expect to come close to hitting initial balance in repayments given I attended as a mature student, so that’s technically £11k that gets written off.
But it’s still wild to see my balance go from £53000 to £72000 over the course of something I finished in 2020, and it’s still unsustainable how this is set up. I think it is also wrong that they can just arbitrarily change some terms of your loan after the fact.
If you’re fortunate enough to have been able to pay your loan off (because your salary outstripped interest, or you could pay it off in full, because you were in that valley where normal payments would cost more than the loan), you should be exempt from any graduate tax. Your account is closed.
This is a great way to further disincentivise your workforce. Love it.
How about we just forgo the theatre, give the boomers a lubed up broom handle and just tell the millennials to bend over and receive? Oh, also give each boomer £1m for ol’ times sake.
Yours truly,
One of the first millennials getting fucked by this system who accidentally snuck into the 40% tax bracket and now has a 58% marginal rate because of student loans. I’ll eventually pay off my PG but not a cats chance in ever paying off my UG.
The messed up part is freezing the repayment threshold while pensions are triple locked. What’s fit for the goose is fit for the gander!!
My students loans were tiny and the deal was good –
You only started paying once were earning over 85% of the average wage,
Interest was set at the rate of inflation,
If you hadn’t paid it off within 25 years it was cancelled. If you were under 40 when you took out the loan, it was cancelled when you reached 50.
There should never have been a student loan *company*, complete madness.
The unfairness of the current system was pointed out when it was being put in place. None of this is new. There were commenters that pointed out that the system was going to fail.
The problem with student loans is HIGH INTEREST. Drop it to zero and absorb the difference between BOE rate or make it BOE rate and keep inflation low or Cap it to the lowest BOE rate during the years of education.
The student loan system isn’t doomed. Its just plan 2.
Make all plan 2 users the Scottish plan 4 system and back date it to loan lifetime removing the egregious interest and if anyone has overpaid refund it.
Just do that. Keep repayment thresholds inflation tied and it’s fine.
Those who make higher pay due to their degree will pay more income tax automatically and those who don’t won’t. Pay for universities that way and forget fees or grad taxes. Since quality went down and degrees don’t lead to jobs, cost can be saved by cutting the number of places quite a lot (seriously, don’t spent money to pretend).
If being a graduate paid what it used to then they would naturally pay more tax