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shadows of echoes of memories of songs
The morning after
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j4 From: j4 Date: December 10th, 2010 05:14 pm (UTC) (Link)
£9000 is a seriously different level of made-up numbers from £1000 (and I'm not saying you were asserting the opposite, of course)

I dunno, I really think that at age 18 they would have both seemed like made-up numbers that I couldn't possibly comprehend. And the idea of £9000 that you have to pay back when you're grown up would have seemed just... I dunno, not real.

FWIW it's not that I was the sort of rich kid who never had to think about money so it was all just meaningless, if anything more like the opposite -- never really having had much money or debt (but not having grown up with the idea that debt was sinful - I just don't think I was really aware it was an option) it all just seemed some kind of mythical grown-up universe.

I am not saying this is a responsible attitude, of course! -- but I really don't think it would have put me off going to university, because I don't think I'd've grasped the scale of it at all. My parents presumably would have done, though, and I don't know how they'd have reacted (but will ask them, because I'm interested).

After university I spent years paying money every single month towards it

Whereas I just kept deferring it until I was earning enough that I had to start paying it back. Again, not saying this is the responsible thing to do. But once I started paying it back, I found I could easily afford the repayments, because by then I was earning enough (ie I think they got the threshold more or less right for the point where you can pay it back if you're basically living within your means). I'm now in a position where I could pay the remainder off in one go, but I'd be doing it from my savings, & last time I checked the comparative interest rates for my ISA and the student loan, it was not quite worth taking it out of the former to pay off the latter.

In the interests of full disclosure: our parents did contribute towards the deposit for our house. If they hadn't been able to do that, we'd still be renting, which to be honest was what I was expecting to do for many more years yet.

BTW I am frankly amazed that you've managed to save up for a house in 2 years -- either you earn a lot more than I would've guessed, or you literally never spend any money! Either way, very impressed. :-} I'm also impressed that you understood all this at the age of 18 -- but then I was a very young 18 (if you see what I mean), e.g. I'd never had a proper job or a credit card or a mobile phone, I didn't have a car, I wouldn't've been able to tell you what an average salary looked like or how much an average house cost, etc.

I think it's far worse to hand over part of your financial potential for decades.

I hear where you're coming from, but surely that's what you're doing when you pay taxes, too? I know there are ways in which it's different from a tax, but it doesn't seem enormously different to me.
htfb From: htfb Date: December 10th, 2010 05:22 pm (UTC) (Link)
On the other hand would the 18-year-old-you have really been bothered by a commitment to a 29% income-tax band starting at £17.5k?

I'm amazed that in between all his work at exciting new forms of convertible mezzanine debt for banks and countries and everybody, St Vince hasn't taken the time to redefine the up-front fee as a, um, Repayable Income-Contingent Higher Education Surcharge.

There are arguments against a pure graduate tax---you don't want people just to leave the country---but they could easily have said "it's a payment obligation, not a tax, but it comes out of PAYE and with income tax and NI your payment bands look like this: also, your maximum obligation is capped after which you go back to the ordinary bands, and unless you have earnings abroad or otherwise dodge the system it doesn't crystallise as a debt on your credit record."

Apart from the status of the debt for individuals' credit-check that's exactly the effect of the current scheme; but since 2008 there is much less point in trying to hide a government obligation off its balance sheet by pretending that student loans are ordinary debts incurred by the student. That just imposes costs on the individual without really benefiting anyone.

As I say, it boggles me that they have gone the other way.
celestialweasel From: celestialweasel Date: December 10th, 2010 05:56 pm (UTC) (Link)
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htfb From: htfb Date: December 10th, 2010 07:30 pm (UTC) (Link)
We crossed in the posting, so I hadn't seen your thoughts on tax when I was writing.

I don't like your analogy with the cancer treatment. There's a difference between the things the state provides as insurance, and the services it provides which people elect to take up: you don't object to paying for council parking charges.

The pass was sold long ago on the idea that a HE student is the beneficiary of extraordinary inputs and, if they realise that benefit in a higher income, should expect to pay back somehow.

Calling something a "tax" implies that it's gathered coercively and of course you're right that the coercive powers of the state should be applied even-handedly. My scheme handles this by crystallising the obligation as an ordinary debt if you renege on the agreement, which can then be enforced using the ordinary processes. I have all the answers, me.
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