MSE News: Student loan deferment threshold to fall: Q&A on why it's happening

A question about : MSE News: Student loan deferment threshold to fall: Q&A on why it's happening

The Government is lowering the earnings threshold for people with a pre-1998 mortgage style loan. We find out why... ...

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Student loan deferment threshold to fall: Q&A on why it's happening

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• Still stinks to high heaven.
• That totally stinks, although sigh of relief from me that I am part time, because my full time wage is only Ј188 a year below it, so with child benefit I would be over the level, but working only 30 hours a week it drops me safely below the level. Phew!
  It is going to effect an awful lot of people though, especially with Erudio taking all benefits into account.
  If it goes down further I wonder, is changing child benefit to be paid to my husband instead of me allowed?
• why does it stink
  the T&Cs are as agreed when the loans were taken out and everyone concerned has had over 16 years to plan for this day.
  anyone with these pre 1998 loans has had a better deal that subsequent students
• It stinks because it's only the 2nd drop in deferment threshold in the history of these loans, and it's a huge drop too (~Ј2k), just after Erudio bought the loans. Plus, all of the publically available ONS data shows average wages going up every month, yet somehow the government data (which doesn't seem to be available to the public) shows a massive drop in average wage.
  I don't personally think there has been anything dodgy going on, but releasing the data on which their calculations have been based would really help.
• or does BIS/ons think average earnings are going to fall by 7% surely that should m ake mainstream news on its own
• granted more lower paid new jobs would bring the average down( also any reduction in massive bonuses ) but does 7% still not seem like a big drop.
  if ons gives 0.2% drop then why 7% drop in deferment threshold.
  also deferment threshold is gross income so shouldn't be affected by tax cuts/rises.
  ok typing that last bit i think i figured it out.
  deferment threshold is based gross income including certain benefits
  but government has been busy capping benefits and is switching to universal credit .
• There was a piece on the radio news earlier about average wages falling in the latest figures. I guess the ONS and Government are expecting that trend to continue, giving ~5 months of average pay decreases. If the benefit thing is also true, then that could make a significant amount, although 7% still seems huge.
• i'm not sure about benefits either as i have never claimed any. Just going on what have seen on the news with regards to caps and universal credit.
  are the benefits that are included in deferment application named in the original t&c's? or is there just a catch all term used and a list of things excluded?
• Firstly, thanks to MSE for following up on the previous article, and seeking clarification from BIS on the calculation.
  However, I'm even more confused as a result of this article - the figures just don't add up if all the calculation is based on is average earnings and earnings growth. I'm no expert at reading stats, but there is no way that earnings growth is negative to the tune of 7%, as far as I can tell it was up 0.7% in April 2014 on the previous April (see table 15, page 63 of 73 here):
  https://www.ons.gov.uk/ons/dcp171778_363998.pdf
  The 0.7% is the growth figure for total pay (regular pay + bonus pay), but if you check the table 15(1) on page 64 showing the earnings growth for bonus pay only, this shows -7.4% - if BIS used this figure in their calculation, rather than the 0.7% for total pay, that doesn't seem a very accurate calculation of earnings growth? The reason given for the unusually low growth figure for bonus pay is on page 18 of the above pdf file:
  "The single month growth rate for total pay for April 2014 (minus 1.7%) was the lowest since March 2009. This reflects an unusually high growth rate for April 2013, due to some companies which usually paid bonuses in March paying them in April".
  BIS also said in the MSE article that they've taken the average earnings figure from the Annual Survey of Hours and Earnings (ASHE) for April 2013 - April 2014, but going by previous years' releases, this isn't due to be published until the end of this year. The latest ASHE, released 12 December 2013, covers the period to April 2013:
  https://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings/...
  Would MSE be willing to ask for the actual figures used by BIS to calculate the latest deferment level, along with the figures for the previous year's calculation, and the ONS source of these figures? I think that would go a long way in helping us to understand this year's 7% reduction in the deferment level.
• As I believe it is based on figs estimated for Jan 15 could it be based on a much higher increase in unemployed youth than the norm. If under normal circumstances you get say 80 people reaching state retirement age & actually retiring and 100 young people leaving school/college/uni for full time work. That leaves 20 struggling to find a job.
  If you change things such as state retirement age that could leave still 100 young people looking for work but 60 only reaching state retirement age leaving 40 young people struggling to find a job on very low job seeking benefits. That would weight the system.
  If you then factor in the number of women most affected by retirement age changes at the moment that may reduce their hours without an employer taking on more staff it would weight it even further.
• I appreciate that I will need to pay my mortgage style loan back, but I cannot believe they are lowering the earning threshold by Ј2k. Erudio now include ALL your income including CHILD BENEFIT! Your average person is still in the midst of austerity, and with this Ј2k drop, my repayments will be Ј185 per month, which is a huge jump!
  It might be worth my while to take a Ј500 pay cut come April!
• On Radio 5 Martin said even he and his team can't get a straight answer from BIS and ONS on the maths and figures used for this.
  Martin thinks it's a "horrible coincidence" this year.
  Maybe it is (doubt it), but until it's properly justified and explained which the actual calculations, it smells like a 5 years old barrel of rotten kipppers.