Student loans – is this sustainable?

Not a quibble at all – not sure why I missed that. I think the theory is that your wages increase at the rate of interest or more, in which case the flat calculation works (in the early years you might not even be paying off the interest, but even then your wages increase a lot faster than the debt), but that’s a bit of a dodgy assumption in engineering IME.

it gets worse:

(for students at any rate. possibly slightly better for the public purse)

http://www.theguardian.com/education/2015/nov/25/osborne-student-loan-tuition-fees-university-higher-education-autumn-statement

IIRC there’s concern in the US that it’s the next subprime crisis – in that there’s a load of loans which will never be paid back and as such should never have been made, will turn into bad debt and collapse the loans company.
TBF I’m not sure if the same risk is sitting in the UK loan book or not. I wouldn’t be surprised – looking at levels of personal debt, BTL and the housing market in general we seem to have learnt nothing from the credit crunch and are back to lending excessive amounts to people who’ll not be able to pay it back

It’s not just the debt; it’s also that England has extremely high education costs.

If I understand the new move correctly, it’s retrospectively applies new terms to students who signed up for the old contract (I’m not in the office, I guess I’ll see the official briefing when I get in) Which apart from being fundamentally dishonest, is also a horrendous message for today’s students- we deal with student debt enquiries every day and we can say “Here’s what it’ll mean for you”. If this goes ahead, now we can’t. We have to say “We have no idea what it’ll mean for you because our mentalist Chancellor might just change it in a couple of years”. I don’t think I need to explain why that’s bad- you wouldn’t take out a mortgage if you had no idea what the repayment terms would be.

The interest rates and some of the other terms and conditions just (or are about to) changed on my loan I got in 98… It made it much less favourable to keep it as the last debt I pay down…
Oddly some of the loans in the states can be transferred to parents and children if you default or die. One of the guys at work is now paying his dead sons debts off after he died leaving big medical bills too.
There is nothing good about chasing the American system of education debt.

One of the guys at work is now paying his dead sons debts off after he died leaving big medical bills too.

That is awful. What a horrid thing to go through as a parent.

I remember going up to a uni open day in the late 90s with my dad. He went off to a lecture just for the parents, which explained the loan system to them.

When we met up afterwards, the first thing he said to me was, “It’s fine, if you die, we don’t have to pay your debt back.”

Interesting article – apparently we now have the most expensive higher education system in the world – Guardian article here

From the guardian article,

The comparison applies for public universities only, which skews the figures for the US, where many leading universities are private.

I’m guessing this is quite some skew. As the Americans I know (living in the UK) pay upwards of £800 a month in repayments.

In context, they’ve household incomes ~£100k (engineers), and will be living hand to mouth, 1 (old) car, no hobbies or foreign holidays until they’re 40.

The US system is odd…

They has associates degrees too. These seem to be one step down from a Bachelors and most of the technicians/CAD designers I work with need one of these which they get from community college.
The guy who sits next to me earns around about $2500 a month before medical, pension etc. The loan people take $450 a month on a $20k debt of which around $80 goes off the principle and the rest is interest and processing fees (which are large).
If he wants to get a promotion he can only do this through more school which will cost him an extra $4-500 per month which he can’t afford. Especially since he has to pay that amount out each month in mandatory state wind insurance for where he lives…
I see couples where they both earn $100k and have a kid struggling to meet the demands of healthcare and student debt. They may not pay it back over their whole life and then their assets will be stripped on death by hospitals and creditors.

A quick look at the local college here shows costs are around $5.5k per semester for a state resident and $17.5 if you are from out of state. As most people take 4-5 years you can multiply these costs by 12-15 then add in living expenses. Imagine if you complete in 4 years in state and live with your folks. You still have $66k in debt so maybe need to pay $1000 per month to cover interest and fees.

Nothing about measuring people worth by pieces of paper that can only be obtained through huge debt is right. Sadly this seems to be the way it is now..

The US system is odd…

Not odd, just not for poor/average/normal people.

The only reason it continues is that everyone seems to live in a dream-state that they’ll get rich somehow and then it’ll be fine as the US is cheap (low tax) for the rich.

One of the main reasons I jacked in Academia was moral revulsion of a system that works by saddling young people with huge debts at the start of their working lives.
I wouldn’t have gone to uni if the fees were this high back in 99.