Tuition Fees and Maintenance Loans – 10 Myths debunked

“It is more from carelessness about truth than from intentional lying, that there is so much falsehood in the world.”  Dr Johnson

Lots of  people are being frightened by scary estimations of student debt and their impact on the future life of graduates. 

Many of these claims are simply not true.The people who promulgate these myths seem to be doing so either from genuine ignorance – or deliberately, to serve party-political aims.  The full picture is much more complex and less frightening.

There is much to argue that the current system is an equitable way of ensuring that the larger proportion of UK young people are able to get to  university  on merit rather than parental wealth. This will be for the first time!

I was a university graduate under the old system where 10% of the population were given a pretty easy ride through a university system funded by the other  90% of the population.

Since then, I have just seen one family member through a university education under the ‘old system’ of tuition fees and loans and parental support  that the last Labour government introduced. I am just about to see another through the ‘new’ (Coalition) system of tuition fees and loans.

Although I was deeply sceptical as to this new system having any merits – I’ve discovered there are many positive benefits for the students and their families. These are being overlooked in a lot of party-political in-fighting between pople who are neither students nor families of students.

MYTH 1: ‘Upfront’ payments mean that only the rich can afford to think of university

Untrue. No upfront money is required from anyone. As long as you register for a loan, the Student Loan Company automatically pays the tuition fees and gives you a maintenance loan to help with living costs.

MYTH 2: Tuition fees leave all students with a debt of £50,000

Untrue.  Firstly, these estimations always conflate tuition fee loans and  maintenance loans. Maintenance loans are optional but a very good way of preventing this cost falling in the shoulders of poorer parents –  as in the past. It also stops poorer students having to take on casual jobs to support themselves while in education, as again was often the case.  Secondly, these estimations are based n the highest possible tuition fees charged.

MYTH 3 : .An inevitable debt  of  £50,000 and more is a terrifying burden and disincentive for poorer students and leaves education in the hands of the rich.

Untrue. For a start, that estimation of a £50,000  debt are based on 3x the highest amount borrowed – All students with a family income below £46,000 are entitled to unrepayable grants for some part of the loans, plus additional bursaries etc depending on how much less than £46,000 the family income is.   Grants and bursaries, unlike loans, do not get repaid, so the poorer the student/student’s family are, the less of a loan they will have to repay. The most generous grants, bursaries and other incentives are directed at students from families with incomes of £26,000 and under – particularly helpful to the students who come from the UK’s 2m single parent families (more likely to be earning the £24,000 median income for a single person)

MYTH 4 : Tuition fees supported by longterm loans are a completely retrograde  way of providing higher education

Untrue.   Firstly, the new system opens up financial support to part-time students for the first time. These, often forgotten in political grandstanding, make up 40% of all undergraduates and had to pay fees upfront, being not entitled to student loans. Many were unable to study or had to give up their studies midway.  These will now be eligible for tuition fee loans on exactly the same basis as full-time students.

Secondly, Courses will need to be worth the cost – and lets be honest this has not always been the case in recent years.  This system will encourage universities to be  responsible to the students for the quality of education provided.

Thirdly, these solid systems of financial support for poorer students constitutes a reasoned attempt to reverse literally generations of educational inequality. Quality higher education needs to be available for all who will benefit! The UK has had a very poor record in educating  our poor and smart young people.

 MYTH 5: Repayment, particularly of the largest sums will be a millstone of debt around the necks of the newly qualified

Untrue. If two friends graduate and earn £23,000 they will both have to pay back the same amount each month, even if one friend has a bigger student loan. And You don’t repay it until you’re actually earning.  The maths of this makes very good sense. If you are doing a degree ‘for love’ and don’t expect to earn much you’llrepay little or nothing.

 MYTH 6:  Everyone always had free higher education in  Britain

Untrue.  For 50 years we were relying on paying for an ‘upper 10%’ who got a university education via the taxpayer,  90% of whom didn’t get a university education. This was deeply divisive. But if we, the people of Britain, want more people to go to university (and we want 50%),  we need to find some way of paying for this. This is why the last Labour government first instituted tuition fees and then tripled them, at a time when the country was supposedly prosperous. It is preposterous that they now forget this.

We need also to look at our priorities. How about pitting the cost of tuition fees against, for example, the cheapest cost for a car, petrol, tax, insurance for a student-aged young person?

 MYTH 7 : People never forget a party who breaks a pledge over tuition fees.

Untrue.  How many readers remember how often Labour broke pledges on tuition fees during the last government? 

Personally I think any breaking of pledges is disgraceful, but it’s not something where other parties have any right to be sanctimonious. Tuition fees were introduced by Labour after pledging they wouldn’t – and at a time of supposed economic prosperity. These fees were more than tripled by Labour during the course of the administration, even though they pledged they wouldn’t.

When the financial situation got bad and Labour realised current levels of support for university education were unsustainable they commissioned  the Browne report  but cynically put off making its findings public and so having to act on it  till after last (2010) election so as not to get their electoral chances tarnished by: the need to raise tuition fees.

MYTH 8 :  Increased tuition fees will result in higher monthly repayments of loans for graduates

Untrue.The repayments  don’t start until the graduate earns over £21,000 (as opposed to £15,000 under Labour), and will at that point be £515 a year lower than they were under Labour:

Monthly payment for graduate from salary after they get work

Graduate Salary

Graduate annual repayment

up to 2012

Graduate monthly pay packet reduction it’s equivalent to

Graduate annual repayment

2012 on

Graduate monthly pay packet reduction it’s equivalent to

£15,000

Nothing

Nothing

Nothing

Nothing

£16,000

£18

£1.50

Nothing

Nothing

£21,000

£470

£39

Nothing

Nothing

£22,000

£560

£46.50

£90

£7.50

£30,000

£1,280

£106.50

£810

£67.50

£40,000

£2,180

£181.50

£1,710

£142.50

£50,000

£3,080

£256.50

£2,610

£217.50

MYTH 9 : Tuition fees will leave the poorer student jugglimng jobs to survive

Untrue – The new tuition fee/student loan system comes with automatic large grants for poorer students which are non-repayable.  All full time students from families with an income (this year at) under £42,600  get maintenance GRANTS which never need repaying. As the total cost of student loans includes the full living expenses for the student for all but those from very affluent families. This means that students can devote all their time to study rather than having to work to support themselves, and that their parents do not have to  worry and scrape together money they cannot really afford  to contribute to their children’s support.Universities also offer bursaries and fee waivers to poorer students

MYTH 10:  Student loans for tuition fees/maintenance will leave this generation of students with unmanageable debt

Untrue. The independent Money Saving Expert says “No, student finance is like a graduate tax, not a loan”

  • It’s repaid through the income tax system
  • You only repay it if you earn over a certain amount
  • The amount repaid increases with earnings
  • It does not go on credit files
  • Debt collectors will not chase for it
  • Bigger borrowing doesn’t increase repayments
  • Many people will continue to repay  in small amounts for the majority of their working life.

This is in return for getting an education which will fit you for a more highly paid future.

You can get more interesting unbiased info without spin from the Money Saving Expert

 

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