A couple of times this week I’ve read the same statistic, that a young person leaving University to begin a career that pays enough to allow them to start repaying their student loan is going to be taxed at 41% from Day One they cross the earnings threshold of £18.5k. Simply put, it’s 20% basic income tax, 12% National Insurance and 9% student loan repayment.
It seems that Jeremy Corbyn has twigged to this, and thrown the abolition of tuition fees in the ring as a potential vote winner, and this will certainly appeal to a lot of people. But my question is: where are all the young people protesting about this phenomenal tax burden they’re going to have to carry? Ye Gods, when I was at University, every single time our student grants were threatened we were out on the streets, stopping traffic, chanting “Maggie, Maggie, Maggie, Out, Out, Out” and occupying the library until it was clearly time for a deserved pint or six down the Mandela Bar (i.e after about twenty minutes of sitting in the library cafe.)
To me, it’s absolutely incredible what has happened in terms of the cost of education with, as far as I can see, hardly a peep from the general public or the students themselves. Okay, maybe it’s killed off the Liberal Democrats in the short term, but the fact that Clegg felt he could renege on his promise to end tuition fees as quickly as he did just shows the complete disdain and disconnection many politicians have for ordinary people. Clegg and his ilk are from a background where thirty thousand pounds of debt is play money. Surely most people spend around that amount each year on holidays?
But, after a short vent of middle class fury against Clegg taking them for a ride, it seems that everyone has accepted that we’ll just have to get on with it. When you think about it, if your degree does help you gain a decent career, then actually the loan system is fantastic value for money. Isn’t it?
Well, maybe. But when you take the 9% repayment, lump in a further 32% of taxes, then add whatever you’re going to have to put by for a pension – and you’re absolutely going to have to put by for a pension, unless you’re insane – well, if I was a youth today, I’d be damn angry about it. Especially if I read blogs like mine where Baby Boomers in their fifties ponder early retirement and the most tax efficient ways to drawdown their pensions while wondering if they can be bothered taking two long haul holidays a year? A Baby Boomer, that is, like me who was given a fantastic free education, who took out a mortgage as soon as he started working (required deposit, fifteen hundred quid and a 95% loan) and sat back to watch property rocket over his working lifetime. Nice work, if you can get it. Which you no longer can.
The repayment burden of student loans is one thing, but the underlying message that debt is necessary, and maybe even a good thing, is even more outrageous. Debt is the one thing that everyone should be trying to minimise and avoid. Instead, what we have is a system that’s telling us that debt is fine, it’s manageable, it’s a fact of life and it’s nothing to be frightened of. Your Student Loan debt, it’s just like a mortgage really – which, dear student, you’re never actually going to have, unless the bank of mum and dad step in. As far as I am aware, your outstanding student loan debt will be taken into account whenever you’ve finally scraped enough together to put down a deposit on a property. In your forties. When most half decent “starter” homes are going to be coming in at around two hundred grand. Good luck with that. (They’re probably already more expensive than that in London.)
Corbyn will probably win a few votes in promising to abolish tuition fees, but I doubt it will make much of a difference to the election result. Why should I get angry about though? It’s not my problem. I’m alright Jack. I think. But I see Theresa May is starting to muck around with pension commitments. She better watch out. We are Thatcher’s Children in more ways than one. There really is no such thing as society, except the Baby Boomer’s pensioner one, and these days we don’t protest on our feet, we do it at the ballot box with a pen.
sex health money death 
So you thinking of voting labour?
Note that the demographic who will benefit from the abolition of tuition fees aren’t old enough to vote, i.e. it’s not a direct vote winner.
I have never been more confused as to who to vote for in an election ever.
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I’ve no idea either. We’re saddled with a system that’s not fit for purpose. Same with the media, but at least that’s changing fast.
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Back when we went to uni (I’m a similar age), only 10%-15% of the population went. They generally did degrees that would pretty much guarantee them a higher paying job, either because they were in hard stuff like science and engineering or because they were selective and employers could use that to be lazy in finding good people. The higher tax take from these higher salaries almost certainly paid off the money given to us in grants – many times over in my case.
Now that everyone and his dog is doing a degree, often in subjects aligned with underwater basket weaving, the value to employers of a degree is lower, and the premium due to having a degree is lower. The country simply cannot afford to subsidise 50% of the population to do pointless degrees if those degrees will not result in higher GDP and higher tax take.
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As just a boomer, born ’64, I really don’t have an issue with the triple lock changing, losing anything over a 100k if I need care and loss of winter fuel allowance. My late OH could not work out why he would be in receipt of WFA when he was still earning a good wage – he was one of those work till you drop types. Reading the MSE forum, it seems that many are fairly sanguine about it.
As for university, I’ve always presumed, perhaps erroneously, that it’s down to the sheer number that go now that means it has to be self-funded. I think it was around 13% when I left school, now it’s 50%.
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It’s actually 31% that go to university now, not 50%. Higher than it was but not stratospheric as some would have you believe. 50% was the target Tony Blair had set which is perhaps where the confusion comes from.
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As a father of 3 children I’m also very concerned by that. Different country, same problem. I’d like my kids to get the same high quality free education I received, but it probably won’t happen. I have not directly planned to help them financially with college, but that could be financially devastating to them. I’ll help as much as I can without endangering my own retirement.
It still annoys me to no end that the high quality education I got for free (in Europe) in the 90’s and early 2000’s will probably cost my kids about $50’000
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I’ve heard the 50% figure being used a lot, the actual figure is 31% of school leavers going to university. I think 50% was the target that Tony Blair set, perhaps that’s where the confusion is.
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Oops didn’t mean to post that, sorry!
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Most people are somehow still managing to not see the elephant in the room, that is massive overpopulation everywhere. Everything is getting less generous simply because there are much more people fighting over a shrinking pie, the planet’s resources are finite and we’re burning through them unsustainably because the dominant/only economic system is based on mindless waste. The candle is actually being burned at both ends to boot, because the carrying capacity of our world is simultaneously being reduced as essential existing resources like water stores or arable land are also degraded.
I (gen X’er) haven’t have kids like so many others in ‘rich’ countries mainly because I feel insecure about my chances of even getting myself over the finish line in bare comfort and dignity, let alone others.
As to why the young haven’t erupted in anger, I’m mystified, as you say, people exploded for less in the recent past even, over injustices alone, as opposed to the existential threats of today. I can only hazard guesses for their apathy: they don’t know they’re screwed; they’re too demoralised to fight; too distracted; too conditioned by the slow creep of the new normality; (never-ending austerity) too dumbed down by contemporary culture; too intimidated by ferocious oppression of any protests; put off by not perceiving any alternative to the failed current system? The only answer is to talk to them and see what they say.
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I have a lot of younger friends and how disengaged they are from what’s going on around them is mind blowing. I think it’s a mixture of factors and obviously not trying to make a blanket statement about all youth, but I think you’ve hit the nail on the head when you suggest it’s because they don’t realise they’re screwed. Too busy scrolling through pointless crap on facebook and getting FOMO on instagram to engage with the real world.
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Perhaps instead of taking to the streets, the young are just venting their anger on social media?
Thanks for letting me walk down memory lane – I’d forgotten the chants of “Maggie, Maggie, Maggie, Out, Out, Out”, heard when the Socialist Workers were gathering outside the students’ union bar, which was coincidentally also called Mandela’s Bar.
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I’m not sure what I’m missing and I sure it’s a complex interplay of factors but why in the last 20 or so years we’ve gone from grants for students, sensible skilled worked wages and housing being relatively affordable to where we’re at now? Average house prices in excess of £300k, students saddled with crippling debts for oftentimes worthless degress, needing a PhD to stand out from the crowd and a total inability to get skilled trades people to do work in a timely fashion.
I expect the numbers going to university has something to do with it (thanks Tony), and also the gaping hole in skilled vocational workers having to be plugged by immigrants (I am pro remain and do not hold anything against immigrants, in fact I salute their enterprise). The house price issue, what drove that to the extent it sky rocketed? Was it the wealthier cashing in on the rent economy, population surge?
I’m somewhere in between these two generations, I am mid 30s, I have friends in both scenarios depending on how savvy they were fresh out of uni, for some house ownership is still a distant dream, so for the younger lot facing even more inflated house prices, depressed wages and humongous student debt, it’s looking like a pretty bleak future.
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@Wheardo, where are “average” house prices in excess of £300k? London? I accept that over the past 15 years or so house price inflation has outstripped wage growth, but lets keep it in perspective. In my area you could practically buy a mansion for that sort of money.
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@Scott sorry, should’ve specified – detatched. According to gov.uk currently standing at £350k ish. I’m based in Cornwall where we’ve seen a massive house price hike totally out of line with very suppressed wages down here thanks to the onslaught of DFLs snapping up (relatively) cheap property.
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@ Wheardo, you might find this guy’s site interesting, (https://surplusenergyeconomics.wordpress.com/) he explains how mismanagement of the UK economy over the last generation by politicos of all stripes, channeling the instructions of the ruling elite, has damaged the country very badly.
The immigrant point is interesting, I had a builder around for some work recently who was complaining that he was one of only a couple of English workers on an entire site, the rest being foreigners. When I pressed on why they don’t sign up for the job, he realised to his surprise that he (is at the end of his career and) had a different work ethic; while the young want a nice, cozy office job. He had assumed it was simply because the migrants inevitably suppressed wages so badly, but I pointed out there are still shortages of labour in that industry. So according to free market principles, the affected salaries should increase, yet locals still don’t want hard labour out in all weather. My observation (I’m not judging) is that aspirations were raised far beyond what jobs/livestyles the country can now provide and simultaneously, AI is unfortunately steadily rendering obsolete most jobs that people are being educated for right now.
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Very true with regards to expectations. I’ve seen it first hand. Thanks for the link, I’ll take a look.
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