[Politics] Cost of Living Crisis

[Machiavelli]

 

[Machiavelli]

Don't worry. Rishi's got a few photo shots filling up a tank of petrol. That'll sort it.

 

[WATFORD zero]

Inflation now hits 7% and Student loans interest rates due to rise up to 12%. Good luck to any poor sods who gambled on an education to try and get a future.

But I'm sure the Government will be focusing on protecting the British Electorate from this at the moment

 

[KZNSeagull]

Inflation now hits 7% and Student loans interest rates due to rise up to 12%. Good luck to any poor sods who gambled on an education to try and get a future.

But I'm sure the Government will be focusing on protecting the British Electorate this at the moment

Well if anyone earns enough to fully replay a Student Loan with interest then I doubt that they would be "poor" sods.

 

[WATFORD zero]

Well if anyone earns enough to fully replay a Student Loan with interest then I doubt that they would be "poor" sods.

And with the current raging inflation rate, how long do you think a household with 49K per annum income should be considered 'rich sods'

 

[KZNSeagull]

And with the current raging inflation rate, how long do you think a household with 49K per annum income should be considered 'rich sods'

Is this rampant inflation going to last for the entire duration of the student loan?

 

[WATFORD zero]

Is this rampant inflation going to last for the entire duration of the student loan?

Maybe, maybe not, but I would imagine that if I had graduated 10 or 20 years previously and had managed to hit the dizzy heights of 49K to support a family with children I may struggle a little. And, as you rightly point out, the Government says the current maximum duration is 25 years. But they used to say there was a maximum interest rate on student loans before they decided to change it

 

[KZNSeagull]

Maybe, maybe not, but I would imagine that if I had graduated 10 or 20 years previously and had managed to hit the dizzy heights of 49K to support a family and children I may struggle a little. And, as you rightly point out, the Government says the current maximum duration is 25 years. But they used to say there was a maximum interest rate on student loans before they decided to change it

I'm not sure what 49k has got to do with anything when it comes to student loans? The point I was making is that the interest rate charged is only relevant if you earn enough to fully repay a student loan with interest. It is estimated that only 25% of students will do that, so one would have to assume that they are earning so much that their student loan repayment is not going to hurt them that much. To the other 75%, they won't notice.

 

[WATFORD zero]

I'm not sure what 49k has got to do with anything when it comes to student loans? The point I was making is that the interest rate charged is only relevant if you earn enough to fully repay a student loan with interest. It is estimated that only 25% of students will do that, so one would have to assume that they are earning so much that their student loan repayment is not going to hurt them that much. To the other 75%, they won't notice.

Any graduate earning over £27,000 now re-pays their loan, anyone over 49K will repay it at 12% interest. It was always known that the way it was originally set up was unsustainable but the true cost couldn't be sold to the electorate, hence the various gradual increases in interest rates etc over the last few years. I suspect that more than 25% of graduates will earn over 27K and make payments on their student loans, many for many many years. You do know that Government estimates are not always accurate

It just seems an unfortunate time for this particular bird to come home to roost, on top of all the other factors in the cost of living crisis.

 

[Machiavelli]

Today's a big day on this front. A 50%+ increase in energy bills about to be announced, which will send inflation even higher, alongside a BoE interest rate announcement that has been widely touted to be another increase.

Edit: this issue can't be tackled without mentioning the sterling work that the likes of the Citizens Advice Bureau, the Trussell Trust and other related bodies provide. The Resolution Foundation has also been a consistent presence with the research it conducts.

Seeing as I started this thread, I have a little leeway in bouncing the OP, and will offer that we might have to stop referring to the 'cost of living crisis' and instead designate it as an inequality crisis.

 

[Machiavelli]

Well if anyone earns enough to fully replay a Student Loan with interest then I doubt that they would be "poor" sods.

Can I draw your attention to the current proposal going through the legislative process that extends the repayment period to 40 years? Fair chance they will be poor sods throughout that period, and not have the opportunities that the average demographic on here has enjoyed, let alone those 'never had it so good years' our parents had.

 

[KZNSeagull]

Any graduate earning over £27,000 now re-pays their loan, anyone over 49K will repay it at 12% interest. It was always known that the way it was originally set up was unsustainable but the true cost couldn't be sold to the electorate, hence the various gradual increases in interest rates etc over the last few years. I suspect that more than 25% of graduates will earn over 27K and make payments on their student loans, many for many many years. You do know that Government estimates are not always accurate

It just seems an unfortunate time for this particular bird to come home to roost, on top of all the other factors in the cost of living crisis.

You misunderstand - only 25% of students will repay their loan in full, hence the interest charged is only relevant to them. Someone earning 27k a year will not repay a student loan in full.

 

[KZNSeagull]

Can I draw your attention to the current proposal going through the legislative process that extends the repayment period to 40 years? Fair chance they will be poor sods throughout that period, and not have the opportunities that the average demographic on here has enjoyed, let alone those 'never had it so good years' our parents had.

Yes, I know that, but then they will know what repayments they will make when they get a certain job and cut their cloth accordingly, I would hope, which is what everyone has done student loan or not. And don't forget, if they lose their job they will not pay anything until they get another one above the payment threshold, unlike a gas bill which they will have to pay no matter what. So it should not really be a contributory factor to the cost of living crisis.

 

[beorhthelm]

well that seem pretty shitty for graduates. it was bonkers to tie interest to inflation in first place, someone obviously didnt think they'd rise. though as many wont ever pay it off, doesnt this just mean the loan company end up with more to write off?

 

[Machiavelli]

Yes, I know that, but then they will know what repayments they will make when they get a certain job and cut their cloth accordingly, I would hope, which is what everyone has done student loan or not. And don't forget, if they lose their job they will not pay anything until they get another one above the payment threshold, unlike a gas bill which they will have to pay no matter what. So it should not really be a contributory factor to the cost of living crisis.

Of course this is not going to have a short-term impact. But the contrast between your day and theirs is horrendously stark, and warrants registering.

 

[Leekbrookgull]

No doubt looking in the wrong area/site but please any link to those MP,s who have taken the pay rise ?

 

[Wardy's twin]

The student loan process is just another rip off for the younger generations.

People defending it by saying most won't pay it off are missing the point - its a debt which is being greatly inflated by a huge interest rate and that debt is brought into any calculation if you go for another loan or mortgage.

 

[KZNSeagull]

Of course this is not going to have a short-term impact. But the contrast between your day and theirs is horrendously stark, and warrants registering.

Yes of course it does but that is an entirely different issue to the cost of living crisis. It is a fixed cost, unless they change their salary, therefore one easily budgeted for, not one that can fluctuate daily.

 

[WATFORD zero]

Yes of course it does but that is an entirely different issue to the cost of living crisis. It is a fixed cost, unless they change their salary, therefore one easily budgeted for, not one that can fluctuate daily.

I'm sorry but it's only a fixed cost until the Government changes the rules again. Like the interest rates were 'fixed' and the 25 year term is currently 'fixed', although not for much longer if the Government get their current proposals through. KIds are taking out these loans for the best part of their working lives and then the Government are changing the rules.

And if you earn £30k and have a debt of £40K you won't pay off your debt after 25 years even though you have actually repaid over 45K because of the interest rate which 'doesn't effect you'. That'll be the same interest rate which the Government changed after you took the loan out

I'm sorry but I believe this is a huge issue. Luckily my realised what was going to happen and borrowed the money from us to repay their loans and have now almost paid us back (0% interest, I'm all heart). This is simply marching towards further education being the bastion of the rich and it stinks.

 

[KZNSeagull]

I'm sorry but it's only a fixed cost until the Government changes the rules again. Like the interest rates were 'fixed' and the 25 year term is currently 'fixed', although not for much longer if the Government get their current proposals through. KIds are taking out these loans for the best part of their working lives and then the Government are changing the rules.

And if you earn £30k and have a debt of £40K you won't pay off your debt after 25 years even though you have actually repaid over 45K because of the interest rate which 'doesn't effect you'. That'll be the same interest rate which the Government changed after you took the loan out

I'm sorry but I believe this is a huge issue. Luckily my realised what was going to happen and borrowed the money from us to repay their loans and have now almost paid us back (0% interest, I'm all heart). This is simply marching towards further education being the bastion of the rich and it stinks.

The bulk of the changes are not retrospective and will not effect graduates that are already working or current students - there is one that will effect the threshold on plan 2 loans which will increase the total amount payable, but on that basis and for the purposes of a discussion on the cost of living, the cost is effectively fixed. I don't disagree that it is a huge issue (I have a child who may become a uni student in 2023 and I don't have any money to lend him) but, unlike the price of petrol and food, he will know what the costs will be before he signs up. To change the rules retrospectively is grossly unfair I agree and one would have to trust that any future, competent government would not do it.

How to fund higher education is another discussion entirely as the old grant system didn't work either and stopped poorer people from going to Uni and I, as a taxpayer, do not want to pay for JRM's kids (or Boris's for that matter) to go to University for example.