Author Topic: Student loan/Graduate tax What would you do in my situation?  (Read 2802 times)

tzxn3

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Student loan/Graduate tax What would you do in my situation?
« on: October 28, 2013, 06:01:05 AM »
The deal with my government student loan is that I pay back 9% of all my net income over 21,000. My current balance on it is about 3,000. The balance when I come out of university will be in the region of 60,000. The debt all gets written off after thirty years.

This raises some interesting issues. The loan is clearly designed with those who will be working for 40 years after they graduate in mind. The interest rate is sufficiently low (the actual rate after you leave depends on how much you are earning) that it is really not worth paying back for most people.

It is really a way for the government to selectively raise taxes on the younger generation. I really don't feel very comfortable buying into this system.

However, my other options are limited. The University of London has a system where you can pay about 5,000 to read some books and take their exams, and if you pass you get a degree.

http://www.londoninternational.ac.uk/uk

There's also the Open University, which charges 15,000 for a bachelors.

http://www.open.ac.uk/

I could also try doing a bunch of MOOCs and software/IT certificates, but that wouldn't provide me with the same level of employability that a degree would.

Besides, I like the social opportunities provided by my current university. I would hate to leave it all behind for the sake of saving money.

I'm interested to know what people in this community who were in my situation would do.

Melody

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Re: Student loan/Graduate tax What would you do in my situation?
« Reply #1 on: October 30, 2013, 09:56:16 AM »
Have you applied for every available scholarship in the country?
Can you get some credits at open university and transfer these to your current university? (And remember you don't need to be enrolled in a university to access it's social life... many of my friends are still involved with our old university and go to all the club events. We also have friends who go to those events who dropped out of uni after one semester!)
What about nearby reputable universities - I understand Switzerland is very affordable. Ireland? With Easyjet, Europe is your oyster!
Think laterally - because 60K is a hell of a lot of money, even if you're getting to pay it back on good terms, it is still 60k of future earnings that can't be saved for FIRE/spent on yourself. Good luck!

tzxn3

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Re: Student loan/Graduate tax What would you do in my situation?
« Reply #2 on: November 04, 2013, 05:23:04 PM »
Thanks for the suggestions. I'm going to apply for the one scholarship I'm aware is open to me this month; they are not particularly common.

I can't transfer credits from the Open University to my current university. The reverse is possible.

I don't know enough about higher education and student life in Ireland and continental Europe to make an informed decision. I don't speak any language well aside from English.

A recurring experience is feeling paralysed and unable to take any action to change my situation. I'm very risk averse, so I'm interested in seeing how someone with different biases would weigh up the risks.
« Last Edit: November 04, 2013, 05:41:57 PM by tzxn3 »

Melody

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Re: Student loan/Graduate tax What would you do in my situation?
« Reply #3 on: November 05, 2013, 03:23:34 AM »
If I had followed the other (no uni required career path): earnings would have looked like:
2007 - $16k
2008 - $20k
2009 - $50k
2010 - $50k
2011- $70k
2012 - $100k
2013- $100k
By going to Uni (I started working in my uni field straight away, only got the job because I was studying, but took a break for the second half of the degree, because it was intense and I needed to focus on study - the money "earned" was scholarships and government payments.)
2007 - $22k
2008 - $27k
2009 - $15k
2010 - $15k
2011- $50k
2012 - $70k
2013 - $85k
Course cost $20k. At this point in my life I am still behind (although from an experience perspective I think the uni option has been more fun) and I expect to be well ahead by age 30. So to my mind the degree was the higher risk option... what if I had graduated and not liked working in my field? Choosing a degree is a huge risk because it takes many years to pay off - your degree will cost more than $60k, it will also cost you 4 years experience in a non degree field. Yes, the degree can be worth it, but make sure you are sure you will enjoy working in that field and compare what non degree jobs you could obtain and their wages (and the enjoyment factor) to make an informed choice. Hope this gives you another perspective to consider regarding risk.

tzxn3

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Re: Student loan/Graduate tax What would you do in my situation?
« Reply #4 on: November 05, 2013, 05:22:50 AM »
That's interesting. I know little of what non-degree jobs are available in this country, particularly jobs that pay that much.
« Last Edit: November 05, 2013, 05:25:40 AM by tzxn3 »

Melody

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Re: Student loan/Graduate tax What would you do in my situation?
« Reply #5 on: November 06, 2013, 02:31:57 AM »
I'm in Perth, Australia.

The job I was referring to to was a retail management career (yes, a lot of retail management jobs top out at $50k, but there are also plenty in the $70-$100k range.) This is also a quicker than average (but I know people who've done it, and assume I could have too) progression in this job. I know a number of people making $70k+ in retail management.
Other well paying jobs that don't need a degree would be:
Most trades - electrician, plumber, heavy vehicle mechanic (likely to pay $70k in the city but well north of $100K if done in the mining industry. Electricians can make $200k+ a year.)
Other mining related jobs - e.g. driller, truck driver etc, health and safety rep on mine site.
Recruitment Agent (start at $50k, can work up to $100k within 5 years if ambitious).
Real Estate Agent (Average commission per house $15k, you keep half and pay half to your employer... how many can you sell in a month?... with 5 years experience 2+ a month should be easy to do.)
Computer programmer (non-qualified): start at $50-70k (depending if you have certifications or not), withing 5 years $100k would be easy to do.
Executive assistant: start on $50k, with 5 years experience $70K+ would not be unusual.
Payroll, Accounts Payable, Accounts receivable Team Leader: Start on $40k as a clerk, $90K for someone with 5 years experience managing a small team would not be unusual.
Wages in Western Australia are scary high - average full time wage is something like $76k and minimum wage is $30k. (However the $76k is massively skewed upwards by qualified and experienced people... $76k is still a good wage for an under 30 year old.)

I guess the thing for you to do might be to compare your job opportunities in software with/without the degree. If you can get a job without the degree, you might then be able to use your employer's tuition reimbursement program to get/finish the degree. I know someone who is doing this. She paid for some certifications, started working in IT (helpdesk), is now studying (paid for by company) and will move to programming when she has finished the qualification, if not before.