Viewing 40 posts - 121 through 160 (of 184 total)
  • So, £168,000 to get my kids through college. What to do?
  • FarmersChoice
    Free Member

    I’m finding this one of the most interesting threads for ages, particularly all the engineering related comments.

    The IET and The Engineer magazine have been bleating on about some sort of protection for the term “engineer” but I don’t necessarily think it should be reserved for someone holding a particular degree from a particular university.

    It should be reserved for a person who can actually engineer something, be that electonic, mechanical, software or whatever.

    IanMunro
    Free Member

    Unless valve radios make a comeback, that rules out half the IET members 🙂

    FarmersChoice
    Free Member

    Yes it does seem a bit of an old boys network doesn’t it! Mind you, not many youngsters coming in to fill the gaps is there?

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    ahwiles
    Free Member

    anyway, midlifecrashes, are you a bit less worried?

    tell you what, when your kids graduate, i will gladly swap their debt+repayments for mine…

    (10% of everything over £21000) < (10% of everything over £15000)

    br
    Free Member

    Without parental support most students would not be able to do [ or an apprenticeship] it as the costs are too high. Seriously we will give people on benefits money [rightly] and yet we wont support students who will better themsleves and [ in the broadest sense] better society. Need to take a long hard look at themselves do the degree educated people making this decison…guess they know their kids will be ok as daddy is rich.

    I’m old enough to have been around when going into an apprenticeship was quite the norm. You lived at ‘home’ and gave your mum your wages – she then gave you your pocket money – only once on proper money did you get married and move out. Thats how it was.

    midlifecrashes
    Full Member

    Am I worried? Not for my family, we’re rich enough and will cope. I’ve never been convinced that 50% of 18 year olds need to go on to do a degree, and I’m sure there will be unintended consequences of the way it’s implemented. The idea of studying abroad is intriguing now it’ll be cheaper than going local. The idea of paying an average of £240ish a month from say a teacher’s salary, starting at £21.5k reaching career up to £36k as a senior teacher is bound to be offputting, especially to engineers. Also would £40k-ish loan be better spent long term establishing a business, doing a degree, just buying a cheap house outright then needing a lower paid job and lifestyle?

    ahwiles
    Free Member

    what do you mean, ‘we’re rich enough to cope?’ … ?

    the new repayment scheme will cost your kids LESS than the current one.

    current scheme: 10% of everything over £15k – someone earning £25k will pay £1000 per year.

    new scheme: 10% of everything over £21k – someone earning £25k will pay £400 per year.

    new scheme for me please!

    convert
    Full Member

    How’s that going to work then?

    Given that new debt levels will be cira £35-40K and students loans will no longer be at a subsidised apr but a market rate, £400pa would not even get close to paying the interest on the loan, let alone paying off the actual debt.

    midlifecrashes
    Full Member

    Well, under the old scheme the threshold for starting payments is £15k, but most will have paid £3300 x 3 in tuition fees. Under the new scheme, most will pay £9000 x 3 in tuition fees. No matter what the threshold for repayment, that’s worse off. By my calcs, a total debt of £42k would take around 37 years paying 9%, or to put it another way, after 30 years of paying £158 per month rising to £258 per month, there would still be a debt of £19k to write off. Assumes starting salary of £21k rising equal steps of £500pa. (I haven’t seen the detail of how the interest is calculated, and have worked on 5%.) Now if other financial institutions treat this as real debt, it’s not going to be funny trying to get a mortgage/car loan/save a bit for your own kids, is it?

    What do I mean by rich enough to cope? We’ve been saving since they were born and live in a cheap town. Last brand new bike in 1997. Good household income but a fair chunk goes away monthly for kids and rainy day. I’d like them to come out of college debt free if we can manage that.

    ahwiles
    Free Member

    sorry midlife – i wasn’t prying into your family finances, just trying to suggest that most people will find the new system cheaper.

    student loans aren’t treated as ‘real’ debt – when i applied for a mortgage the bank considered my monthly student loan repayments, but not the total debt.

    the scheme will hit those who go on to earn 40 / 50 k or more or more. at around £40k someone will quickly start to make a dent in their debt under the current scheme. and pay off around £12000 in about 12 years or so.

    (i’ve got a spreadsheet here i’ve been playing with – i’ve even trying to factor in how useless the loans Co is at keeping tabs on your current salary)

    under the new scheme, a graduate will owe around £30k, if they go on to earn 40 / 50k, like above, they’ll be making smaller monthly payments, but for much longer – about 20 years.

    someone like a nurse or a teacher, will maybe never pay off their debt under the current system, the new system will mean low-ish earners will be better off.

    midlifecrashes
    Full Member

    No worries awhiles, and wouldn’t have cared if you did pry, since without real world examples how do you judge a policy? I’m lucky enough to look at the figures and think “that’s gonna cost us, big style”, but to look at it as a 16 year old from a household earning average wages around here and looking forward to being a not very exceptional Engineering salary like I did, I’m sure my choices would have been influenced. As with everything, we need the detail of how grants and bursaries will work to see if enough is done to offset the effects of the hike.

    [Edit: wrong figure from my spreadsheet above, theoretically 35yrs to repay, or £14.5k to write off at year 30]

    aracer
    Free Member

    student loans aren’t treated as ‘real’ debt – when i applied for a mortgage the bank considered my monthly student loan repayments, but not the total debt.

    Exactly what I’d expect, as they’ll presumably look at it in the same way you do and realise that it will eventually be written off (not only that, but it’s a very soft debt as you stop repaying if your income falls rather than the bailiffs coming round).

    It’s mostly already been said on the engineering discussion, but I’m just wondering why I’d only be on £16k if I’d not gone to uni, when I could have worked my way up to something better given sufficient intelligence to get through an engineering degree – the comparison is spurious. Also so much for increasing salary with experience – I’m earning less in real terms than I was 5 years ago, with no prospect of my salary outstripping inflation any time in the near future – in the longer term I’m not totally convinced I’ll make it back to where I was by the time I retire 😥 Even going into management, the sort of increases I’d see wouldn’t be worth the added aggravation and the fact I’d then be a manager (which I could have done without going through the engineering degree and training) rather than doing the technical stuff which is the reason I decided to be an engineer in the first place. Of course I could move jobs, but I put up with it because I like where I live and having a short commute – I still wonder how my company retains staff at its other sites in parts of the country with a worse standard of living.

    bazzer
    Free Member

    Is this new system not a graduate tax by another name ? You can only bay the 10% of salary over a certain amount so unless you earn really big bucks you will never pay it off so you will be paying 10% extra on earnings over 21K for 30 years. Sounds like a tax to me.

    I am a software engineer (yes I am charted too for what that is worth) I specialise mostly in embedded software. I take it most of the engineers who are saying they don’t earn more than 30K are mechanical engineers ? Most if not all of the Software and electronic engineers I know ear a fair bit in excess of that. I know I live in the south where the roads are paved with gold.

    Bazzer

    chamley
    Free Member

    I agree that the fees going up almost 3 times is terrible, I would have been gutted if that had happened when I went to university but what I’m struggling to see is how its harder for the parents to send their kids?

    My parents had to save up the fees for both myself and my twin brother before we went and then pay them up front each term. Now the kids pay after, so less to save right?

    It’s a tax on gruaduates, it’s pretty obvious. But i think if you treat it that way instead of a massive debt that you’ll never clear it’s a bit easier to deal with. It doesn’t affect your credit rating etc

    DT78
    Free Member

    I managed through uni without parental help, thankfully the year before fees, but after grants abolished so came away with about 9k debt, the missus the year after with fees owes 12k odd. If I’d been faced with leaving uni £30k in debt I wouldn’t have gone.

    Luckily I did a proper degree and managed to get a reasonably well paid job after 12 months of persistance (different industry though). So my debt is paid, the missus however looks like it will never be paid off, she’s just paying the interest at the moment – at some point she will take a career break for children too,

    Personally I think core (or whatever subject this country *needs* graduates in) courses should attract scholarships for the best applicants to help the less welloff attend. If you are rich and thick then you pay full whack, poor and brainy course is free(ish).

    Of course that would mean they have to stop handing out A*’s to everybody…. I’ve heard some uni’s do basic maths/english tests now as they’ve found some students are below par. Pains me to say but if basic english/maths is bad they shouldn’t be studying a degree, whatever subject.

    To the OP – I’d start saving now!

    miketually
    Free Member

    Is this new system not a graduate tax by another name ? You can only bay the 10% of salary over a certain amount so unless you earn really big bucks you will never pay it off so you will be paying 10% extra on earnings over 21K for 30 years. Sounds like a tax to me.

    Yes, it is.

    Most graduates will never pay off their loans. The government will have to pay eventually.

    It’s essentially another PFI initiative. Taxpayers will foot the bill eventually, and will end up paying more.

    bazzer
    Free Member

    Also is it 10% before tax that gets paid to the loan company ?

    What I mean is do you get tax relief on the repayments.

    so earn 30K pay £900 to loan company get taxed on £29100.

    Bazzer

    xiphon
    Free Member

    @ Bazzer – yes, I thought the student loan came out of your wages pre-tax?

    Check your next payslip, and it should say?

    Macavity
    Free Member
    Scamper
    Free Member

    I find the debts students and/or their parents are having to deal with these days staggering. I went to Uni 20 years ago, and back then it was a fairly big deal if you had an overdraft of £400. Student loans came in during my final year and if i recall was something like £500 a year. Fees were nothing like they are today. I’d set up a Child Trust Fund, then at 18 say say here you are, make your own decision.

    I may be wrong, but at the time there were aspects of the grant system which needed to be looked at – namely children of divorced parents got a full grant regardless as to their parents financial circumstances, as did mature students over the age of 21.

    Regarding degree choice, you went to uni (as well as to drink for 3 years) to demonstrate your intelligence to future employers – hence graduate level better paid jobs. Degrees were largely accademic core subjects and were not chosen unlike today with a future employment path in mind, which i think is far too early. The other aspect of going to Uni was to get “life experience”, but these days with travel around the world being easier i’d consider encouraging my kids to travel – and by that i don’t mean sitting in a bar in Sydney for 6 months.

    I graduated during the last recession and it was pretty impossible to find any job, let alone a graduate job as `we’ had been led to believe. Today the job market is different, but with employers having more graduates to choose from i’d not want to be in the position of £30k plus debt around my neck. Having said that, with careful financial management, a large chunck of this can be paid off over ten years with careful financial planning – but who has that in their 20’s? 😀

    bazzer
    Free Member

    Check your next payslip, and it should say?

    Mine was paid off 10 years ago, but no where near as large as some of the debts younger people will have to pay off.

    I was lucky enough not to have to pay fees and still had a small maintenance grant topped up by a student loan.

    miketually
    Free Member

    I’d set up a Child Trust Fund, then at 18 say say here you are, make your own decision.

    I wouldn’t. They’re generally charged at a higher management rate than an identical product and they become the legal property of the child at 18. What if you’re kid’s a drug addict at 18?

    Scamper
    Free Member

    Fair point – but in general terms what i mean is give a long term saved lump sum and within reason let them get on with it. Having said that, even a smallish sum from a Trust Fund at least allows them to have total control and learn to sink or swim.

    ebygomm
    Free Member

    Scamper – even today students are assessed based on the finances of the resident parent where parents are divorced.

    If they’re talking about help for the poorest they really need to find a better way to test this. Especially a conservative government who are supposed to support the family.

    Also the incentive to play the system is going to be far greater if fees go up. I know people whose parents stated they were separated (they owned two houses) so they got more help.

    Junkyard
    Free Member

    the new repayment scheme will cost your kids LESS than the current one.
    current scheme: 10% of everything over £15k – someone earning £25k will pay £1000 per year.
    new scheme: 10% of everything over £21k – someone earning £25k will pay £400 per year.

    You seem to suggest that paying less for longer is somehow cheaper I think it is more expensive as you pay more back in the long run. Cheaper per year but for longer – Would increasing my mortgage by 5 years save me money?

    miketually
    Free Member

    Would increasing my mortgage by 5 years save me money?

    What if you never expected to pay off your mortgage, and the amount left to repay would be written off after 30 years?

    Would you want to pay off the whole mortgage off really quickly for large monthly payments, or would you mortgage youself up to the hilt and pay the smallest possible amount each month until it was written off?

    bazzer
    Free Member

    What if you never expected to pay off your mortgage, and the amount left to repay would be written off after 30 years?

    I am guessing the government have done the sums and this ends up with them netting more cash in the long run !!!

    ebygomm
    Free Member

    Under the new system you won’t necessarily be paying less for longer. At certain levels you’ll never pay off the debt under either system. Under the old system (1998-200?) you can potentially be paying for 43 years, the new one is written off after 30. Not to mention the fact that you could be earning 20k so paying off under one system but not the other.

    ahwiles
    Free Member

    i never expect to clear my student loan debt of £12000-ish, my repayments aren’t keeping up with the interest/inflation.

    i’d rather be paying 10% of everything i earn over £21,000 for the rest of my life, than the same of £15,000

    i’d have more money (long term and short term) under the new scheme.

    people who go on to earn 40-50k or more earn enough over the threshold to make good headway into the debt. these people soon clear it under the present system. These people will be paying a tiny bit less, but for much much longer under the new system.

    the extra money to make up for the cuts in uni funding will come from higher earners.

    miketually
    Free Member

    I am guessing the government have done the sums and this ends up with them netting more cash in the long run !!!

    You would hope so, but…

    bazzer
    Free Member

    the extra money to make up for the cuts in uni funding will come from higher earners.

    The more I read about this the more I realise its a tax by the back door.

    brassneck
    Full Member

    The main reason I would dissuade any of my children from doing Engineering at Uni was that I suffered a 40 hour LECTURE week for 3 years, whilst everyone I knew was doing 16 tops. Outside study on top plus coursework, projects etc. You’d struggle to do that and hold down a part time job as looks to be necessary now.

    When you leave and realise sales earn more than you with no degree and a fairly scant idea of what they are selling, you realise you’ve been wasting your time.

    For me the distinction between engineer or not was not chartered status (which seems to have a degree of baggage) but whether you did a Beng or Meng rather than a Bsci .. maybe naively I assumed all other unis put the same demands on their Beng students.

    brassneck
    Full Member

    Of course I could move jobs, but I put up with it because I like where I live and having a short commute

    100% agree. I could earn 10K more by commuting to that London everyday, and it’s entirely feasible to do so.. but my quality of life is more important.

    legspin
    Free Member

    On the Engineer debate…. At work I design something in Inventor, export the solid models to cad/cam software,then create the toolpaths and then the code which is then sent to the cnc machines. I then go and set the machines machine the componet then fit all the parts together.
    As I only have a city and guilds qualification does this make me not a engineer?

    jonb
    Free Member

    If anyone is thinking of doing chemistry then I’d look into a sponsored degree. Two of my previous employers have offered them.

    Here we pay about 15k rising to 20k over 6 years and you do your degree one day a week. Most come out with firsts (as they have developed a work ethic/professional attiture over 6 years in a proper job) they also have a job and no debts. Not sure if it will continue if the company has to up it’s payments.

    zokes
    Free Member

    try working in science!
    starting slaries are easily below the 21k threshold

    Really? With degree or PhD though?

    breatheeasy
    Free Member

    I am guessing the government have done the sums and this ends up with them netting more cash in the long run !!!

    More likey as with most governments, they won’t be around to worry about/pay for it in 30 years…

    monkeyfudger
    Free Member

    Anyone hear the Jeremy Vine interview with the Lib Dem MP this afternoon? Quite amusing listening to him stammer his way through his pathetic explanation about election pledges….

    ahwiles
    Free Member

    bazzer – Member

    The more I read about this the more I realise its a tax by the back door

    correct!

    but if the government were honest, and said so, then it would set a very dangerous precedent; paying income taxes based on which services you use.

    i went to university – should i pay a graduate tax?

    i don’t smoke – should i get a reduction for not trying to kill myself at great expense to the nhs?

    should criminals pay extra income tax to cover the costs of their incarceration?

    i don’t have kids, why should i pay for schools?

    etc.

    it’s all a bit daft, and would get terribly complicated.

    for the record, i don’t mind paying taxes, it’s an important thing to do if you want to live in a society that isn’t based on stone-age tribal war, and trading sea shells for goats.

    aracer
    Free Member

    should criminals pay extra income tax to cover the costs of their incarceration?

    i don’t have kids, why should i pay for schools?
    Now there’s a thought – prison loans and school loans.

Viewing 40 posts - 121 through 160 (of 184 total)

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