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Comment by tikkabhuna | Hacker News Reader

> [1] oddly enough I have never discussed this with british people

Over recent decades tuition fees have been rising, but they've been covered by a special loan. Paying back this loan is taken out of your pay cheque (via PAYE) based on how much you earn. If you don't pay it back within a certain number of years it gets wiped.

Before the last major increase it was viewed by most of my peers (I graduated in 2013) as reasonable. Graduates could expect to pay it off.

Now graduates finish with £40,000-$50,000 and the interest rate is so high many won't ever pay it off.

Being able to support yourself during university might be a problem but there are bursaries and grants you can get.

Let me know if you want more details.

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It's actually better to think of the UK loans as a graduate tax - and in that way it's pretty progressive.

You pay 9% extra from when you earn over 25k a year (IIRC). So those who need a degree to go into lower paying, yet skilled, professions (nursing, teaching) can do so easily safe in the knowledge that yes, there's this big sum of money that they "owe" but it'll only be taken once they are earning an OK salary, and they don't have to pay it all back if their earnings never rise.

If you make 50k, have a child, and have a student loan, your marginal tax rate becomes 62%, that's 40% (income) +2% (NI) +9% (Loan) + 11% (child benefit reduction). I don't think that's progressive, I think it's excessive taxation.

It goes up to 71% at £100,000+ (then drops again at £123,700), including NI and Student Loans - maybe even over 100%, depending on how much childcare you lose out on.

For example, going from £100,000 to £100,001/year immediately costs you 570 hours/year of free childcare (potentially a couple of thousand pounds per year), and all of your tax-free childcare (potentially over a thousand pounds per year).

Note that this does require _one_ person in a couple to be earning over £100,000, so it's hard to have a lot of sympathy in that case - that certainly doesn't count as struggling! On the other hand, it's also not at all progressive - it comes in all at once, potentially meaning you should refuse a pay rise. It's also _very_ different to the headline tax rate of 40% that you _think_ you're paying...

Just ask for a 10k pound rise then instead of a one pound rise. This is my strategy. Better get a 10k rise and pay 6k in taxes on it than not to get a one pound rise to avoid extra taxes altogether.

It's easy to prevent that happening by taking on salary sacrifice schemes, or even better, putting more into your pension.

Do you get taxed for having a child. I was under the impression that you got tax breaks.

Slight correction - if you earn between 50,001 an 60,000 you lose child benefit, if you're on 50k you keep it all.

Indeed, "graduate tax" has been shoved down our throats left right and centre in the media. Because who can disagree with paying a tax! It's your duty! And by changing the narrative away from debt, we can ignore any psychological affects of having large sums of debt at a young age. I was told my loan (this was before they went up to huge amounts) was affectively free because my salary would rise above inflation every year!

Let's not also forget that interest rates are on a sliding scale depend on income. People earning over £45k have an extra 3% interest slapped on top of RPI, i.e. 6.1% - amazingly similar to those in the US, no?

It's a noticeable sum off your take-home that isn't going towards saving for a mortgage. As another posted pointed out, look at your total take-home pay.

Also, the large sums of money have gone towards lavish new facilities and over-the-top student halls of residences. It seems like students have provided investment capital for universities.

Thanks! Seems like a step between the US system and the Spanish system. What happens if you lose your job for example for a couple of months? Do you have to pay as a normal loan or is it more like taxes where you only pay relative to your earnings?

The latter, you won't have to pay whilst you aren't earning. Additionally you will only start paying when you are earning over £21,000 a year. After that, you'll pay back 9% of anything you earn over £21,000.

Currently its +9% to your tax bands; essentially a graduate tax.

Repayment starts at £21,000pa; so if you earn £30,000 you'd pay back £37 per month

The payments are based on your earnings, so it is a kind of graduate tax - but only up until around retirement when any remaining amounts are cancelled.

In effect, more successful English graduates subsidise everybody else (because it is supposed to be revenue neutral). And specifically English, because only English students pay the full £9,250 per year. (Scottish students pay nothing, Welsh and Northern Irish a reduced amount).

The English subsidise the "United" Kingdom but are discriminated against when it comes to social provision paid out of general taxation. Unlike Scotland, Wales and Northern Ireland we do not have a Parliament for England looking after England's interests. Instead we are ruled by the Union Parliament which includes MPs from Scotland, Wales and Northern Ireland whose remit and interest is their own respective nations, not England, but who get to vote on legislation that affects England without England having the equivalent ability to interfere in the Scottish, Welsh and Northern Irish Parliaments.

> In effect, more successful English graduates subsidise everybody else (because it is supposed to be revenue neutral). And specifically English, because only English students pay the full £9,250 per year. (Scottish students pay nothing, Welsh and Northern Irish a reduced amount).

It's more complex than that; Scottish students are liable for the full tuition amount if they study in England, and the repayment terms are different (9% over £18330 currently, but it is changing), but Scottish students studying in Scotland have tuition paid for out of the Scottish government's general funds (and you can argue whether the majority of the government's income through Barnett Formula is fair or not to those elsewhere in the UK), though are still eligible to get bursaries/loans for living expenses.

You have a very narrow view of who's paying for whom, which is what happens when education becomes a commodity. My tuition was paid for by the Scottish government, so by the UK tax payer. Now as a higher rate tax payer I help pay for everyone else, including English students who don't earn enough to pay back their fees.

And as a resident of London, my tax will be counted as English by the books, reinforcing the idea that England subsidises Scotland. But really it was the Scottish government's progressive tuition fee policy which enabled me to go to university in the first place.

If you really want to break the UK down and pit us against eachother, then why not be honest and say that London is subsidising everyone, including the rest of England? The English aren't discriminated against, they just choose to vote for politicians who are against devolution for England, for tuition fees, and against social provision paid out of general taxation. Things would be worse without the MPs from Scotland and Wales.

Having chosen to move to London you are now an English tax-payer with less political representation than you had previously. That is your choice. Why should those of us who are English and who wish to continue to live in England amongst our friends and families have less political representation than those living elsewhere in the "United" Kingdom?

As for London, it is the capital of England just like Edinburgh is the capital of Scotland. Both are richer than elsewhere in their respective countries. I am not sure what point you are trying to make.

As for the Scottish Government's "progressive tuition fee policy", it was voted in by Scottish MSPs. The tuition fees paid by the English were forced on the English by MPs from Scotland who knew their own constituents would be unaffected - MPs from England (and Wales) voted against these fees but were overridden by Scottish MPs. That is not the fault of those MPs that the English voted for, but rather by a system of Devolution designed by effectively the Scottish Labour Party. And every time anybody who is English tries to address the issue there are howls of outrage from the rest of the UK, and Scotland in particular.

If you believe university rankings (a big if) then the UK’s universities are — on average — dramatically better than those in the rest of Europe.

And they were prior to student loans

I always felt funny about that topic. A couple of Spanish technology universities are always near the top rank in Europe lists.

But what lists? There are so many, Universities choose to showcase the convenient ones of course.

> and the interest rate is so high many won't ever pay it off

If you think of it as a kind of extra income tax that only applies to those who benefited from a bigger chunk of the education system, then inability to ever pay it off doesn't seem so terrifying.

But once you look at it that way, it becomes very difficult to argue (in non-libertarian ways), why those who got the same benefits without the loan (rich parents) or somehow lucked into high earnings without the education (usually some form of exceptional talent) should be exempt from that tax. In the end, a more progressive income tax would be the same, just without those exceptions.

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