OK. So suddenly I’m having to get my head around a whole new area. We’ve had a form to fill in from “Student Finance” and not only am I thoroughly confused but I’m mildly alarmed. It’s all changing from next year owing to the fact that the Government are letting universities put up their fees – as far as I can see, although the cap was at £3.5K last year, most universities have chosen to increase them to the new cap of £9K per year (which I assume are just the fees?). Just like that.
SO. What do I know? Not much. It’s all a little bit dry and boring, so ignore unless it’s relevant to you. If there’s anybody out there who can help clarify this murky area then please let me know. I think some information gathering is required.
My son has been offered a loan of £3375 to be paid directly to his university for his tuition fees for the first year. They are also going to pay him £3564 directly to cover maintenance.
So, what happens to the shortfall of £5,625 for his tuition fees once the price has gone up? Where are they all going to find that sort of money from? What about the additional costs like food, books, entertainment, travel and so on?
Apparently the loans themselves have recently changed and will no longer be interest free (or just a small percentage). They are going to be index linked which could therefore mean they will be paying back 7% interest a year. Apparently the loan is to last 30 years and cannot be redeemed early in order to allow all students to start work on an equal footing. IS THAT TRUE? Whilst they don’t have to start paying it off until they are earning a salary of 21K – 40K per year they will be saddled with SO MUCH DEBT. Before they’ve even started. Their tuition fees alone will amount to £27K in three years and that is not including their accommodation and food etc. What if they become high income earners and end up paying 50% tax? In addition to another almost 10% interest per year and they’ll be taking home 40p in the pound. I wouldn’t blame our future generation of workers to leave the country in disgust. Who wants to work for that? I thought the Government were aiming to encourage entrepreneurs? Hardly.
How are most students going to be able to afford to go to university at all? None of them will be able to afford their first home and that situation is already bad enough.
Would it be cheaper to somehow find a way to lend them the money from a separate loan at a lower rate of interest and without all the tie ins?
I thought the idea, in our austerity times was to stop encouraging people to borrow more than they can afford and the government are about to force our students to have to do just that. For years and years. They are pricing our children out of a tertiary education and other richer countries will fill the spaces no doubt. It’s probably not much more expensive to educate our children in the States now – at least there are scholarship options there.
IT’S AN OUTRAGE. Any ideas on what to do about it?