Thursday, February 23, 2012
i don't understand the governmnet's student loan scheme. that shouldn't come as a surprise, my maths ability is very poor and my financial acumen is non-existent. i also get the feeling that the government is not that sure of what is going on either. take for instance their shock that many more universities than they thought raised their fees to the maximum when they were allowed to. how they didn't see that coming is beyond me. they didn't. so their initial forecast as to how much they were going to have to pay out in student loans was off the mark. then you hear various spokesmen saying that actually even fewer people will be paying back their loans now than they did previously. the threshold at which the student loan repayment kicks in is higher and the loan is written off after a certain period of time. i remember one statistic as being that almost 50% of students would not be paying back their loan. given the whole point of the loan system is to save the state money as students now pay for their education, i am not sure i see the sense in bringing a system that sees such a high failure rate. based on that sort of failure rate it would be just as sensible to reduce the tuition fees so that student loans drop to a level that they can be repaid. today the con/dem government has announced that they are going to remove the penalty clauses for those students who pay their loans back quickly. quite why there are penalty clauses for paying loans back quickly has always confused me (see aboove), you would have thought that having the loan paid back quickly would mean you had a debt off your books and money to loan out again. the national union of students (nus) and university and college union (ucu) have both had a go at this. liam burns of the nus says early repayment run the risk of making the student loan scheme more regressive (though he does point out that people should be wary of 'chipping away' at the deby as the benefits might bit be that great). while the ucu say it is a "policy designed to make life easier for the wealthiest". i refer you back to my admission of lack of maths and financial acumen but frankly i just don't see how it makes any difference to a poor student if the wealthier ones can pay off their debt quicker. firstly it is pretty likely that the wealthier student will either have a lesser debt to start with or will have been getting financial support while at university. in some cases they will exit university with no debt. the poorer students know what they are getting into when they enter university and hopefully when they come out they will be equipped with a good degree to go on to make their way in the world. what really hurts the poorer students isn't that they may have to pay back their student loans for a longer period of time it is that they can't get into the more prestigious institutions and they probably don't have access to the old boy networks to get them into the best paying jobs, or can't afford to go off and do an unpaid internship. personally i think that there should be a move to try to find ways to provide as many grants as possible for those from poorer backgrounds. it may mean that certain subjects are not going to be available for a grant and may involve means testing. frankly anyone who has come to university through private should pay their way. harsh i know.