ceemage: (Default)
2015-07-30 09:10 pm

Consultation Response

One of the sneakier bits slipped into George Osborne's budget a few weeks back was a proposal to retrospectively alter the threshold at which students start to pay back Student Loans. This is currently £21,000, but should go up in line with inflation each year. The government is now proposing to remove this indexation. Yes, even for existing loans. The consultation document is at at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/447565/BIS-15-445-student-loan-repayment-threshold-consultation.pdf
My response to the consultation :

1 What is your name?
Peter Sullivan

2 What is your email address?

3 What is your organisation?
Not applicable - personal response

4 Keeping the threshold of £21,000 the same for all post-2012 borrowers until April 2021? (Option 1)

Whilst there may be a case for applying this to new loans taken out going forwards, there can be no case for applying this to loans which students have already committed to. The government would not allow private sector lenders to change the terms of a loan if the lender decided they no longer wished to fulfil them; it should apply the same fiscal discipline and principles of equity to its own loan book.

You note that "the proportion of borrowers liable to repay when the £21,000 threshold takes effect in April 2016 will be lower than was expected when the policy was initially introduced." This is because of the slow pace of growth in the economy, not because of any windfall benefit to the students impacted.

I note that I personally have a number of savings with NS&I, which I invested in, at least in part, because of the security and certainty of the loan terms and return. Will the government be looking to apply a similar principle of retrospectively changing the terms of these loans to its own benefit?

5 For borrowers starting in September 2016 (and subsequent intakes), from April 2020 keeping the threshold at the same level as existing borrowers for a further five years? (Option 2)

I personally would prefer no change, but Option 2 does not suffer from the equity objections to option 1.

6 Allowing the threshold to rise by earnings? (No change)

This would be my preferred option. If this is unaffordable, then option2 would be better.

7 Current students/borrowers?

Represents a unilateral change by the lender of the terms of the loan which the students agreed to when they signed up.

8 Prospective students/new borrowers?

Might discourage prospective students, especially those from poorer backgrounds, from applying to university in the first place.

9 Employers of borrowers with loans?

Minimal - their job is to make the deductions as advised by SLC & HMRC.

10 The Student Loans Company (SLC) and HM Revenue and Customs (HMRC)?

Some administrative overhead, but this should be minor as long as they have sufficient advance knowledge to adjust.

11 Learning providers?

Might discourage prospective students, especially those from poorer backgrounds, from applying to university in the first place. Impact on providers' equality and diversity strategies.

12 The Tax payer?

Perception that loans to/from the government are "political" and can be changed at whim. That the government is an untrustworthy counter-party for loan transactions.

13 Can you identify any equality issues introduced by these possible changes?

Might discourage prospective students, especially those from poorer backgrounds, from applying to university in the first place.

14 Do you think the Government could mitigate the impact of the proposed changes for borrowers?


15 If yes, what do you consider those actions might be? (Please indicate all that you consider to be relevant)

Introduce Option 2 - only apply freezing of threshold to new borrowers, who can then take this into account in deciding whether or not to go to university.

Note that students part-way through a course are not "new borrowers" as they have already committed to their course, and hence future borrowing, unless they drop out.

16 Do you have any other comments that might aid the consultation process as a whole?

Many young graduates I know are currently in low-paid jobs that do not require graduates. This is not due to any lack of effort on their part, but to the general economic situation. The £21,000 threshold - and its indexation - plays a key role in making sure that graduates only have to pay for their university education once they start to benefit from it.
ceemage: (Default)
2015-02-01 04:41 pm

Things I never knew I never knew, pt 94

Greggs, the well-known bakers chain, has a 24-hour store in Newcastle City Centre. You know, just in case you need a Cheese and Bacon Wrap at 3.30 a.m. sometime.
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2015-01-16 04:11 pm

It's the beat the kids adore

The latest new cool social media site, Updog, explained.
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2015-01-12 09:21 pm

Things I never knew I knew, part 94

The phrase "Forty acres and a mule" came from Sherman's Special Field Orders, No. 15, issued 150 years ago today.
ceemage: (Default)
2014-12-28 01:27 pm

Ants Dancing with Elephants

Selling to Big Freaking Enterprises (with some bonus dating advice thrown in for good measure).

(Hat-tip to [personal profile] supergee.)
ceemage: (Default)
2014-12-26 08:44 pm

That was the year that was

The Radio Review of 2014: the year in radio and podcasts, with Jane Garvey and Stephanie Hirst.
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2014-12-26 05:42 pm

Boom, boom.

The inevitable celebrity blog: Basil Brush's views on 10 years of the fox hunting ban.
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2014-12-24 04:38 pm

Happy Holidays to one and all

And, for those of you stressed out by the holidays, a good time to remember the words of that great American philosopher, Linus van Pelt:
'And there were in the same country shepherds abiding in the field, keeping watch over their flock by night. And, lo, the angel of the Lord came upon them, and the glory of the Lord shone round about them: and they were sore afraid. And the angel said unto them, Fear not: for, behold, I bring you good tidings of great joy, which shall be to all people. For unto you is born this day in the city of David a Saviour, which is Christ the Lord. And this shall be a sign unto you; Ye shall find the babe wrapped in swaddling clothes, lying in a manger. And suddenly there was with the angel a multitude of the heavenly host praising God, and saying, Glory to God in the highest, and on earth peace, good will toward men.' That's what Christmas is all about, Charlie Brown.
ceemage: (Default)
2014-12-21 11:55 am

A Christmas Message

Dear Church, Here's why people are really leaving you.
ceemage: (christmas)
2014-12-07 06:33 pm

'Tis the season

"Christmas time is here, by golly.
Disapproval would be folly.
Deck the halls with boughs of holly.
Brother, here we go again..."
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2014-12-04 07:38 pm

TImey-wimey fanzine

Issue 19 of Journey Planet is a Doctor Who special. http://journeyplanet.weebly.com
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2014-11-26 08:16 pm

Problems with the space-time continuum in Glasgow

Got the train up to Glasgow for a business trip. Got back to Newcastle earlier than planned, by hoofing it from Glasgow Central to Glasgow Queen Street and connecting at Edinburgh. Go figure.