Thread: Student Loans

Originally posted by Troll_King
Interest and inflation are different things. While infation has to do with the purchasing power of money compared to some standard bread basket of goods, interest is a constant rate that affects your debt. If you don't reduce the debt quickly than you will end up paying more due to interest on a larger sum. I don't know how they can maintain that amount with inflation when it is the creditor that controlls how much he has to pay, unless the debt payment is amortized.

Often it isnt the creditor who controls the amount to pay......the loan will often be configured as an amount over the base rate (Set by government and therefore altered over the life of the loan) and will often be tied in over a space of time (3 years,4 years.....). Usually you can only control the amount you pay on short term loans like overdrafts and credit cards.

Originally posted by Clyde

As far as I know the way it's done is the interest is capped at the rate of inflation.

Yeah more or less......probably a little markup for admin, but I dont think they make anything ( I havent looked in years.....)....in all probability they lose money (if the rate charged is less than the base rate)

Our government (ie the UK one) doesn't control our interest rates anymore, a\the Bank of England Committee does. At least its not the Central European Bank yet.

Inflation is a measure of a governments inability to control economic growth and the supply and demand of "key" goods and services.

Naturally governments want to keep inflation low whilst maintaining high employment, which is tricky in itself. And they do cheat buy putting items with high depreciation rates, such as PC's and other high tech items in the "standard basket".

As for loans and grants, grants you paid back over your entire life through taxation, loans you pay back in fixed term depending on amount borrowed, number of loans and monthly income. When I had to start paying back the loan I was earning £7 more a month than the limit, my repayments are more than £7 a month.

Do i want you to explain the concept of a loan to me? As i said before it is the principle of the loan system that i am debating...If you read the other posts you will see i have a job...now, if there is any one and i mean any one out there that can work a 40hr week and pass computing degrees at Uni...say it now...


there are not enough hours in a week-trust me i know.

unless you learnt psychology or something-thats the usual layabout way through Uni...or maybe art?

I personally dont care where your taxes go, but it should be of benefit to the country.

If you drop down dead tommorrow, there needs to be some1 to replace you, suitably qualified. People will not go to Uni if funds do not allow it.

The UK has a massive economy (4th largest i think) and we have POTS of money. The underfunding is one issue, but not for discussion here.

The grant system was a good system which worked fine.

The only thing that changed was the new government targets for school leavers to go on to further, then higher education...

I know they thought, lets put loans in instead..that will help.

The problem is only middle/upper class students were applying because of funding, and now it is WORSE because of the loan system.

Still we get nurses from abroad and now the MET are recruiting bobby's from TONGA of all places, so the next step will be recruit more and more qualified ppl from abroad.

And ppl think loans are needed because grants were too expensive..............

I think you will find we DO have pots of money....its just politics where it goes..Nurses wont get paid much more-fact of life, not because we dont have enough money. The simple facts regarding more Uni applications than before is because the governments introduced new targets for application levels-BECAUSE THEY WERE LOW, especially from poorer families. Wasnt because grants were too expensive. We like to keep paying off our national debt (which is good), but maybe the money could be put to better use.