If you're a young person looking forward to starting university this month, an existing undergraduate, graduate or former student, then I'm afraid that I have some bad news for you. Millions of people with student loans -- debts owed to the Student Loans Company (SLC) -- are in for a shock, because on 1 September the SLC doubled its interest rate.
On 1 September each year, the SLC reveals the fixed interest rate that it will charge for the next twelve months. The SLC's interest rate is linked to a measure of inflation (rising prices) known as the Retail Prices Index (RPI). The bad news for SLC borrowers is that the RPI hit a sixteen-year high in March 2007, when this year's interest rate was calculated. Thus, the interest rate paid on student loans will double in September, from 2.4% to 4.8%.
Historic student loan interest rates
Academic
year
SLC rate
(% APR)
Academic
Year
SLC rate
(% APR)
1990/91
9.80
1999/00
2.10
1991/92
5.80
2000/01
2.60
1992/93
3.90
2001/02
2.30
1993/94
1.20
2002/03
1.30
1994/95
2.30
2003/04
3.10
1995/96
3.50
2004/05
2.60
1996/97
2.70
2005/06
3.20
1997/98
2.60
2006/07
2.40
1998/99
3.50
2007/08
4.80
As you can see, the interest rate for 2007/08 is the highest charged by the SLC since the early days of the SLC in 1991/92.
End Of Quote!
Not a good Start for youngsters setting out on a career in this Country is it?
It pains me that most of the politicians who cooked up this scheme went to university FREE. However, in those days the percentage of kids at uni was very low - I dunno, probably less than 5 percent. These days the government - and the Opposition, apparently - wants 40 to 50 percent at uni.
Simple fact is, we as a nation can't afford to educate this number at uni for free, especially when half of them are wasters. So what's the answer? As I've suggested before: make core subjects (i.e. those essential to the UK's economic welfare - science, engineering) free and charge for the rest.
This is particularly bad news for those already on a 3 or 4 yeard course since they could not be expected to know that interest rates would be doubled.
It will be no surprise to see a larger than usual number of drop-outs, a waste of everybody's time and resources.
Why is the RPI used rather than the gvt's preferred choice of CPI?
It's about time these loans were capped at 2% max.
It's a wild guess, scrubs, going on the drop-out rate and the considerable number (in my experience) who don't know why they are there or what they'll do with the degree when they've got it.
Anyone got an official wasters figure?
If we did go back to free university places I would want to see applicants putting up a 'businhess' case to the authorities explaining why the university (or state) should invest in them.
I just started Uni this month, and I think its important to note that the SLC did project the interest rate rises way back when I was applying at the beginning of the year - so if students have actually read what they are getting into, they will have seen this one coming.
the problem with the current rates of students going into further education is that the "wasters" degree as you put it, are unlikely to be able to be used in other areas.
all financial jobs now require a finance based degree or one based in maths. i would assume science and engineering are the same with IT etc likely to go the same route.
the times when you could study sociology at uni and come out and do whatever you want are gone due to the governments need to send kids to school.
we should be looking at alternatives such as trade schools as the only way we are heading is sending students into further debt, as they have to take more than 1 degree (1 upon leaving school to satisfy the government, and another when they know what to do), whilst this will then send those young people who do not have a degree into further poverty as the chances of getting a good job without a degree will move further away.
remember to keep this debate about loans and not tuiton fees, thats a completly different debate
Only problem with Core subjects is this. What if someone really is talented and gets a job afterwards doing that?
I will give you an example.
An Arts degree. Many consider this to be a hobby degree which people are unlikely to get a job in afterwards. Afterall who wants artists right?
I work in a company that makes handpainted children's bouncy castles. The painter has an Art degree and has used his skills in the commercial marketplace.
During the season he has managed to work full time.
Wheras I being an "old fogie" computer graduate only works part time.
Can you explain that one?
The truth is in the past 2 O levels was good enough to get a job doing simple admin in an office.
Wheras nowadays a degree is necessary to do the most basic of jobs.
Chulcoop, you've posted quite a few times in a half-glass empty kind of way.
Putting aside whatever we've said to each other in the past, can we get to the bottom of what you are expecting in life?
Are you posting purely to demonstrate your personal experiences or do you believe that your life is a true reflection on what is wrong with society/gvt policies?
Your comment above on artists is odd. There are plenty of businesses who require artists eg interior designers, dress designers, marketing and ad agencies. Then there are niche markets from fine art dealers to framers. Art is integral to most businesses, to a greater or lesser extent.
I was employed as a computer professional for many years and could see way back that the likes of Microsoft were making off-the-peg products. Depressing? Well, in a way for us old fogeys, but that's progress and I embrace, not resent, it.
I'm not one who believes I'm owed a job, regardless of my experiences or qualifications.
What I do have is a belief in myself and whenever I got to the point where I was so depressed with my lot, I changed it. Don't depend on the system - it's broke and it ain't going to be mended any time soon. You're not alone but you need to see the abilities in yourself, not the inadequacies in life, and rise above them.
You must have learnt other life skills along the way, no? This is not being snarky but more about realising what and who you are.
