[Diggers350] student loans dont add up

[ilyan]

It is a great life being a Medical Student.   Run up a huge debt and 
repeat  as many years as you can.

Was it Spinoza or Descartes who indicated that the brightest people 
should not waste their time going to University?    University for the 
more stupid people, the even more stupid should be put to a Trade.

Nowadays it should be even more clear that those too stupid to follow a 
Trade become Politicians.

Fifty years ago Medical Students just about repaid the full cost of 
their medical education in their first year as a Houseman.    Alternate 
weeks of 120 and 80 hours if paid at a tradesman's wages with proper 
overtime rates did that, but they were paid a pittance.   The EU put a 
stop to those hours.   Quite sensibly because there was a loss due to 
breakdowns and even suicide, and overworked people do make mistakes.

Ilyan


On 03/11/2010 19:18, james armstrong wrote:
> It took me ten minutes to work out , that raising student fees and repaying them at interest as proposed is not compatible with a sound economy nor is is rational.
>
>   Repay student loan + save updeposit  +  repay mortgage ?
>
>   It doesn’t work out! Or to put it another way young high earners won’t be able to afford to buy a house or to start homemaking and family rearing.
>
> The new  uni loan repayment kicks in when you earn £20,000.
>
> At the new student fee level you might run up a debt of  £40,000.
>
>
> You’ve found a property  priced at £150,000
>
> > From your first job, you will have to save up a deposit – of ten per cent = £15,000 .  This could take you ten years at £1,500 p.a.
>
> By then property prices will
> have moved up  (but so may your salary /
> wage/ income.) or it may not. The trend is for the houseprice: salary ratio to
> increase  .
>
>
>
> After ten years saving at
> £1,500 pa you will have  a deposit of
> £15,000.
>
> You will then have to
> convince the bank of your credit worthiness
> to be able to afford to repay £11,556 p.a. mortgage p.a. out of a salary
> of £20,000  (that what I work out the
> loan repayments for 25 years at 8% compound interest)
>
>
>
> Here’s your case
>
> Income £20,000 p.a.
>
> Repay student loan + inetest   £4,000 p.a.
>
> Net salary £16,000 less
> expenses, less tax, less pension contributions ..
>
> Repayments £11,556 p.a.
> Can't be done.
>
>
> Possible outcomes.
>
>
>
> 1 Bank refuses you mortgage.
> You can’t buy a house.
>
> 2  Bank offers you mortgage (but this is now
> certainly an unsound proposition ). There’s a trade name for this – “ sub prime
> mortgage.”
>
> 3  No
> mortgage? You can’t buy  a house
> even if offered a mortgage.
>
>     Your
> salary isn’t big enough . You will have to rent.
>
> 4 You and all the other
> priced-out generation now form the
> ‘reserve  house-needy army ', which
> landlords  rely on so they can now
> exploit by  rent increases.and
> house-builders rely on so they can push up house prices.
>
> 5 House prices fall
> because  of  the fall in demand
>
> 6 Repossessions increase  as struggling owners go into  negative equity.
>
> 7  Following the 2008/9 crash Government is
> forced to bale out banks
>
>   Following the
> 2021 crash govt is forced….and after the spending review, student fees
> are  increased...
>
>   10 Because of the worry of such a life time- debt
> level hanging over your head for thirty five years you have a nervous
> breakdown.
>
> James
>
>
>
>