Review: BBC Student Loan Calculator vs The Official Student Loan Calculator

Today the BBC launched its website offering to calculate how much graduates will repay on their student loans. But the government also has its own official repayment calculator at Future Students. Which one is the best?

For a newly-qualified teacher, for example, the government's official Future Students calculator estimates your weekly repayments at just 87p.

That is just £45 over the whole year. But before you look forward to spending all your hard-earned cash on expensive summer holidays in the long vacation, take a look at the BBC's calculation. It estimates the same repayments for the same new teacher at £681 for the year! That is 15 times more than the official government estimate! 

What could possibly explain such a gigantic difference? Well, the BBC one takes account of inflation in prices, and earnings; and discounts the value of money in the future like economists always do; and allows for your age and sex. The government one doesn't.

Actually, to be more precise, the government one doesn't, just like I told them months ago, when I pointed out to the Department for Business Innovation and Skills that Future Students "massively underestimates how much graduates will actually have to pay back each month".

In other words, the BBC calculator confirms that The Official Student Loan Calculator provided by the government at Future Students is a big fat lie.

I doubt that many potential students will be duped into believing their repayments will be as ludicrously low as Future Students promises. But I also have a question. After this, how on earth do ministers hope to persuade the new generation of students that anything else they promise them is true?

Comments

[Steve Longstaffe]

William - sorry to be dim, but isn't this disparity just because the government assumes the teacher's starting salary to be 21.5 k - i.e., the minimum starting wage for a qualified teacher - and the BBC, bizarrely, assumes it to be 28k plus, probably based on the starting wage including London weighting of about 27k?

[William Cullerne Bown]

@Steve I think you have to reflect on precisely why you think £28k is bizarre for a male teacher's starting salary in 2016.

The BBC has made all its assumptions explicit, so by all means argue it out with them! But as far as I could see, they have followed the government's own assumptions wherever possible. So it's not so much that the BBC is offering an alternative scenario to the government, more that the BBC's calculation is the government's own scenario, done right.

[Steve Longstaffe]

OK, got it, being dim. Though there is a really big difference between male and female teachers' projected earnings for the BBC, which could have been clearer in the original post. A female teacher outside London in five years, even with those sophisticated adjustments to projections, is probably going to be well under the BBC figures.

Thanks for all the good work.

[William Cullerne Bown]

Yes, she would pay less. But still massively more than the government says.