Student Loans! British VS American

i'm sorry i'm just crying at 1.1 hello everybody and welcome back to a depressed a-level student who's been screwed by his classes government i'm evan edinger and i'm corey and we both owe money to the government for attending university who has it worse the us or the uk that's what this video is all about how do we do that so first question is uh how much do you owe how much do i owe yeah i oh he didn't ask me to check that i don't know you don't even know how much you owe i don't look at it i don't need to pay it back much um i owe at least over 20 friends over 20 yeah over 20 grand 100. oh jesus so we both owe a significant portion of money that's basically what i wanted to not pay that back what is the average cost of tuition room and board and everything for what you got like three years for bachelors over here oh yeah so three years in england four years in scotland but scotland's free so it doesn't matter all right uh no so it's three it's three years uh nine grand a year it's about nine thousand two hundred fifty i think they've just counted that tuition okay that's what but twenty seven thousand seven yeah yeah obviously my experience with this isn't the same as every single person in the us's just wanna make that clear so for the purpose of this video i researched what the average price of a four-year bachelor's degree is in the u.s uh came to conclusion that for tuition and room and board it's 85 000 total if it's in-state which i'm being generous about by choosing because most people do out of state which is nearly triple but you pay more out of state of course we do yes but why the states are a country they should be friends shouldn't they i actually don't i think it's because the original thing was you're supposed to encourage people to study within state like there's many flagship universities within the state that make it so that students can all study like no matter where you are there's a university nearby however because usually out of state tuition is three times the cost they usually like to you know recruit out of state actually as a quick aside on this there was an interesting study that was done about the university of alabama in tuscaloosa what percentage of the recruiting do you think was out of state for out of state high schools out of alabama versus in-state 50. it's actually uh eight percent we're done in state what 92 percent yes well three times if it's a business if it's run like a business even though this the flagships universities which especially for alabama it's just for alabama people it was made so that you know you don't have to travel far but they don't make as much money who wants to go to alabama so they recruit well people nearby clearly that are recruited and as another quick aside because i thought this you'd find interesting of those eight percent of high schools that they actually visited in alabama what type of high school do you think they were oh are they like prep high schools like the ones that you got to spend money for well they were just really white oh that's it really rich okay white and rich so it's like oh of the states you visited in the state in the state of alabama they ignored very specific areas very black and alabama isn't it but they said it was just a coincidence so it's fine yeah yeah i mean it's coincidence we just went to the places you know where uh where people have money before people have money in a situation where annoyingly we only went to the suburbs it's not our fault i just thought that was a really interesting study about uh how u.s universities get their money from there's kind of a similar thing in the uk to be honest with in-state and iowa state oh oh well international students okay so yeah you're only okay so with within the eu obviously not soon because we're about to leave the eu but up until up until like you know soon you've got to charge the same maximum for eu students as you charge for your home students and home students only applies to the country so england yes yes scotland charges nothing for scholars scottish people yeah which means that they can't charge eu students but they do charge english welsh and northern irish students so eu is free in scotland right now three of scotland but england and wales it's like nah guys you gotta pay i like that england have got set by under like about i think nine grand yeah nine grand english students and it's the same so we can't go over that it's the same for everyone in the uk and it's the same for eu students yeah i can't go over that but if you're international it can go anywhere from sort of 10 grand to 40 grand oh oh saying as an american if i wanted to study abroad in england or anywhere in the uk it would be much more than nine grand a year oh yeah it'd be up to 40. just like home yeah there's no point it makes you feel like you're there's no point in going anywhere and going anywhere actually i know that's a lot of study abroad programs in the states like it works out cheaper to literally travel to england for an entire semester study there and get room and board there when you're not in london than it does to go in your home so if you wanted to study anywhere in the north in england it's probably cheaper to do a study abroad it's not hard to get student loans for studying abroad though it's the same loans oh you actually save money like i said your loans are just for the tuition and because study abroad program is done by the university to be like get culture it gives you an opportunity to go out and just try oh very good which is quite nice you should do that come study in the uk yes as long as if it's cheaper which like i said it does work out to be that way most of the time i mean it usually does yeah but how do you guys get your money how do we get our money like where does like obviously go to the government and shake him down no i wish no as in like i've heard there's a bursary okay so the bursary isn't one specific thing a bursary is like here's some money that you don't need to pay back and usually it means oh yeah scholarship yeah what kind of financial aid financial aid yeah okay because we also have financial aid like depending on how rich or poor your family is my university has a bursary that i just looked at mine which is ucl but it's not the same as everywhere uh they give you money up until about 40 grand so if your household income is so both parents have to be like a total of under 40 grand yeah of under 40 grand that's so similar to us as well i know so it goes it goes up to it goes up to about three grand you get but that's only if they earn under about 17 grand total uh so it's basically if you're really poor good if you're in the middle class well you say good but three grand is okay that's a good point like okay so for the first time three grand first the third right yeah well no no no so this isn't this isn't to go to student loans this is just because your student loans are all paid for as in your tuition is just paid for so i know you student loans by the government your tuition is basically paid for by the government yeah if you're a uk student your tuition is pretty much because the cap is the same as the cap for um the loan oh okay so this would just be the bursaries are for limiting and eating and all the other yeah which three grand for a year is not no i don't think you can afford to live much more yeah i don't know if it's like this in the uk but maintenance loans that we get in the us where yes it includes tuition and then they also give you more for living expenses and eating and stuff you can spend that on anything so usually as soon as that day comes and you get your loan money people buying ps3s back in the day oh yeah i know people that were using that were getting um loans they were kind of if their parents were separated they would only mention one parent's income oh you can't just mention that in the u.s the way that they did it was they said that they lived with one parent and so that's the household income because the other parent doesn't have so it doesn't have like custody over them oh see that makes a lot of sense because i lived with one parent when i went to university and my dad did not help at all financially however because he's my dad and hypothetically his money should be supporting me they considered this family a two-person household which meant that i wasn't qualified for any of the even though my mom's money was not quite enough and i would have been there they went oh your dad could pitch in no why he's not going to yeah he wasn't going to and so i got kicked out of all the good scholarship bursts that's the other way that was the other way around for someone i knew so she her dad was loaded like loaded loaded like worked as a consultant loaded um they didn't say his income because uh he was separated from her mom and she got a bunch of personalities just decided not to well it's it's based on whether your parents are divorced or not and who you live with i guess yeah i mean you shouldn't cheat the system but you can i mean like i said i wish i could have that wasn't even cheating the system that's actually how my situation was but and people were using the people who were using those to buy like laptops and stuff which is which is useful you have to pay it back well you you don't really no not if it's a bursary oh because that's the financial aid where they just give it to you as a here you go yeah good job for not having a lot of money i suppose right for us those scholarships are ones you have to write like essays for about like why america is the greatest country in the world and i deserve this dear nra please give me a thousand dollars oh no you just need i did that for my church i got a thousand dollars from my church that's nice if you've seen dear evan hansen it's very similar or like your mom just sits in your bed goes here's all these essays you can write to make some money because we can't afford it so it's not really the same as a scholarship though it's more like the bursary is unlimited my university gives that as many bursaries as it wants the bursaries are the bursaries are from the university not from the government so you've got different you've got different types you've got student loans which come from the government okay so you've got your government-backed loans yeah so you've got your tuition loans from the government and you've also got your maintenance loans from the government tuition obviously pays for the university maintenance pays for whatever you want to pay for and then you can get a bursary from your university okay so you got a lot of different sources it's very similar i think we have yeah so different universities have got different bursaries so we mentioned student loans the bread and butter of this video hypothetically uh what types of interests do you guys have because we've got multiple options over to choose from in the us so we don't have options we there's two different interest rates you can have but you don't get to choose which one you get is that a good thing or a bad thing neither okay so basically the way it works is that there's two plans in the uk you've got plan one which is what i'm on and plan two you're on plan one if you're an english or well student who started an undergraduate course anywhere in the uk before the first of september 2012 or a scottish or northern irish student who started an undergraduate or postgraduate course anywhere in the uk on or after the first of september 1998. and do you know why it's the first of september 19th i don't know why it is i don't know man i was one year old man i wasn't even a year old at that point i don't know you're on plan 2 if you're an english or well student who started an undergraduate course anywhere in the uk on or after the 1st of september 2012. so basically if you started your course after 2012 and you're from england or wales and you're on plan 2 pretty much everyone else is on plan one and is plan one better or plan one you have to pay back earlier but the interest rates are lower so the interest rate for plan one right now is one point one percent oh that's so beautiful yeah it's great it's great but also but also you the so i'm sorry i'm just crying at 1.1 i've got a t-rex i had to look this up because i i avoid my student loans i don't like looking at them i don't want to know how much i owe it just says on the website that you currently have an interest rate of 1.1 so i think they can change it whenever they want whenever probably not there's probably a contract oh yeah no i mean obviously they'd have to you know follow a procedure but i think they can basically change it if need be if need be when it probably depends on the state of the economy i know that a lot of the u.s is is based on that personally we yes i know i know so when i went to get my student loans uh i went to the university itself and i had to choose between a fixed or variable rate the fixed rate you know was 6.9 percent which is pretty gosh dang high however positive you know if everything else goes to the crap in the economy it doesn't go up or down which is positive however so i hope you picked i hope you picked the fix right now the other one's the variable one which was lower at the time it was like i think 5.4 and that can go way higher than 6.9 or way lower depending on the economy guess what happened the year after i signed a fixed loan for 6.9 crash the variable went down to like 2.4 oh dear so i was and it's one of the things where i clearly signed up for 6.9 and i thought that was the strategic option turned out coincidentally not i think there's people that are signing up for loans like this here that are at like three percent in the us and i'm like that's cool that's great why are they asking teenagers to gamble because that's how they make a lot of money but that's awful you're exploiting teenagers well that's why a lot of times they depending on the size of loan you do have to get a parent to co-sign it so that if you aren't able to pay it back they can come after your parents who do make money oh okay so if you die they can come out your parents who still owe that money for your degree that the dead child had yes that's not the thing you want if you're at your kid's funeral wow the debt collector's there so you had life insurance or should have not died it's pretty sad i know it's it's very upsetting i'm curious does so i've i can't go on that's horrible yeah i is it the same in the us where like in the u.s our student loan debt is inescapable no matter what happens like i said even in death sometimes your parents will get uh harassed uh no matter what happens it will be with you call bankruptcy they're like student loan debt still there you can't lose it it actually increases no you're good like okay so student loans in the uk they they default basically which kills your credit oh not default no no you don't default on them that's a different word they get wiped they get wiped after 30 years uh 25 in some cases so the the debt just wipes away just gone you don't know any more exist yeah i don't think i don't think student loans really count towards your credit credit what oh wait no it's like our main thing no they can't count towards your credit why because you they you don't choose to pay them they just come out of your salary yes yeah i think the way that i've looked up the way that the uk student loan system works is it's like even though it grows and it has interest it it doesn't the amount you pay so it doesn't change based on how much you owe yeah the way that it works is it's kind of the same as taxes so i think of it i think of it like a tax you you above a certain amount so about 26 grand for plan two and about 17 for plan one you only pay nine percent on the the amount above the sort of limit so if you earn a hundred pounds above the limit you only pay nine pounds a month and if you pay 10 grand over it you pay 900 pounds yeah extra a year extra yeah i mean and the thing is that's really not yeah it's only the money above that amount so if you're like it's about 17 grand and above 26 it's fine in terms of when we have to pay them back it's really heavily pushed on the financial aid website on the us fed loans specifically you know to do this 10-year plan or a graduated plan where you're expected to pay it all off in 10 years but because the high interest rate it means that in order to do that it it just to pay my interest for instance let's say i signed up for the 10 year plan currently i would have to pay i think over 1 800 every month to attempt to pay that off and a thousand three hundred that is interest that's how much the interest is disgusting which means it's really it is genuinely not possible to do that unless you are an incredibly high level like top one percent earner it's just not possible to escape and that number will keep growing or what or a celebrity pays for you or a celebrity pays for you yeah sure that'd be great someone want to help me out i owe a lot and it's really frustrating because there's no way really around it however the us does have a very similar system to the uk which is an income based or income contingent plan where if you let's just say make 30 grand a year you can sign up and instead of it being in a 10-year period they just say give us uh 10 or 15 of your stipend over a certain amount so similar to you guys have 26k and it should be fine and here's the nice part if you do sign up to this income contingent plan they do forgive the debt after 25 years oh that's nice and then you're hit do you you know the us likes weapons right oh god you told me about this i think yeah we uh then you hit with the tax bomb the irs tax bomb because if you think about it all that debt they just wiped away that's kind of a gift from them to give that very nice lovely gift and so you should pay back 20 or 25 depending on actually let's just say i don't pay any of my debt right my interest will go up and i'll owe 200 grand of student loans irs is like here you go 200 grand that now puts me in one of the upper echelons of the tax brackets which means my money is now ridiculously highly taxed and i have to pay 23 40 on that amount and if i don't well then i'm bankrupt again also i i don't think it you cannot you just have to i've read reports of like 50 year old men going like i'm trying to prepare for the tax bomb that's coming eventually there's no escaping it if you live in the us that's horrible yes nothing happens in the uk it just goes away quietly ours is a gift from our government who just expect a small gift in return for me 40 000 pounds or dollars that's horrible yes no um i think i said you cannot escape it i'm not planning to pay back my student loan and the government so in 2019 the government did a sort of study and it it found that about only about 30 of people will likely pay back their student loans in full but you guys are still getting educated which i think is really nice oh yeah absolutely i do think the tax system where over 26 grand you slowly paid off works because at least you're giving the money yeah yeah i mean you're only giving what you can yes and you don't need to worry about owing it all and the like the delicious amount of interest you guys have i'm not worried i'm not worried about like for for a while like right coming right out of uni i was only paying about six pound a month it's like i didn't even notice that i was paying my student loans as soon as i finished my degree here they started expecting me to pay back about a thousand two hundred every single month i started getting emails and i just didn't have a way around it until i found out as a fun fact uh if you do live abroad and you no longer live in the u.s and don't plan to go back to the us uh actually you don't actually have to pay back any of your student loans is that because they can't get you here or no this is a legal thing it's totally legit this only works for federally given loans by like u.s fed loans by the government department of country you get you know how you said the government gives you loans oh yeah you get loans from us you can get loans from yes the government the thing is the u.s have a cap on how much they're going to give you loan money-wise and so usually if you want to go to a private school or if you are really out of state and it's a lot more expensive most students get saddled with sallie mae or the current company that bought it which is like evil private loan where they will call every one of your friends and family every single month and be like where's the money so poor people can just stuff it i guess is that is that what the deal is yeah and it's you have to constantly reconsolidate it's really scary the way that it works if you're paying back your u.s fed loans they try and find out well if you're doing an income based model how much do you make in u.s dollars if you live abroad you are able to apply for if you watch my tax video the tax credit because i'm already paying tax in the uk and so it comes out to be zero dollars i make in the us and so the student loans people go you make zero dollars what's uh six percent zero oh just zero we'll get you next year and that just keeps going until the interest runs up and then it's forgiven with a tax bond jesus however if i do pay that tax bond which is like i said 40 grand in like 20 years that is a little bit like the same exact amount that i actually originally owed in student loans so hypothetically that's a fair system that's i mean well it's 40 grand over 20 years right yeah so you just you need to save up like you need to save up quite a bit also to get around that tax bond hypothetically if i didn't have american citizenship because i happen to renounce it there's nothing they can really do either hypothetically well it's all hypothetical maybe you should renounce your americans like i don't think i would ever renounce for any type of tax or student avoidance purposes anything like that if i did it would just be for political reasons of course [Laughter] this is a really weird topic to talk about on video because there's a huge amount of expats that currently do this process because there's no real way of avoiding that like i said you can't avoid u.s taxes except this one small trick that's literally built into the way that the system works good do it america really likes putting you in debt don't they yes if you want to go to university you've got to be in debt for the rest of your life if you want to get sick you got to be in debt for the rest of your life and i do want to do anything you just got to be in debt man that's how it works i i also do feel like it is an indentured servitude like in in the us it's a little bit only because you do sign up for this dream of you'll make a lot more money and you can have a new life in the new land of having a college degree and there's no actual way of possibly paying it back for most 90 of people oh no absolutely so therefore you're kind of working endlessly to pay back this interest growing loan that will never go away that's really awful that's why i said it's like i like the uk model because it's kind of it feels like nothing evil no if yeah it feels like it's a tax like i yeah i took out all these i took out all these loans for um going to university and everyone did really unless their parents were loaded and paid for all yeah but um i didn't need to worry i was like yeah they'll write it off after 30 years they only take about nine percent of of my money above the threshold i'm good my taxes go up basically but how yeah it's like nine percent on top and you're like well that page the student loans that i got it sounds a bit fairer it's not like crazy you guys don't have to worry about it whereas for me that interest that constantly grows as much as i i just know i can't contribute to it because it's ever growing and will not stop unless i become fabulously wealthy i feel like whenever this topic comes up there's always those i don't know if you've seen this but whenever an american complains about like oh i really don't think this is fair i shouldn't have to pay you then have other americans who have paid off basically going hey i had to suffer and i had a horrible time and i think everyone should just because i did too we should not we should not fix the system yeah i know i love i love that mindset because it's it's just i'm hard so you you need to be hurt too yes because i was hurt i think everyone also needs to be obviously it feels to know that if you paid off your student loans and then if we'd elected bernie sanders uh and he'd forgiven everyone's student loans well it would have felt a bit bad that you spent the money and yeah but too but also that's good for the future of the gym no it's not right okay you'd feel bad but you shouldn't be mad at the people that are getting it free you're mad at the people that made you pay yes that's exactly the situation america is very good at redirecting hatred to like the wrong people uk does that as well okay no they know the uk does it as well but okay i mean americans very good at it yeah so overall obviously i'm gonna vote for the uk system is better than the us's in this regard obviously yeah yeah absolutely i i think the u.s schools are great the u.s universities and colleges i i liked the degree that i got i liked that i got to do a lot of different things but in terms of the financial aid and the way the student loans work is uh debilitating and horrifying yeah i think for america in the uk you can go either go really broad for america and really sort of direct for the uk but obviously it's much better you don't have to pay back all those loans yeah i don't care what the american system is like i don't have to pay that much yeah that's fair it sound it's like i feel like the uk system is an in-between between like a lot of countries in europe that have it for free yeah and then the us which is the opposite you say the uk system it's english everyone except scottish is the it's really it's the english system more or less yeah yeah well uh tell us what you think below do you have student loans let's talk about it and cry together thank you very much for watching check out uh corey's sci guys we got a link in the description good podcast or click another video i will see you guys on the next one goodbye goodbye

Channel: Evan Edinger

Views: 361,956

Keywords: student loans, school, school loans, UK, us, us vs UK, british vs american, evan edinger, evan, edinger, 2020, loans, interest rates, american vs british, moving abroad, how to avoid paying student loans, IRS tax bomb, irs, tax bomb, america, england, free college, free university, bursary, scholarship, scotland, wales, northern ireland, usfedloans, sallie mae

Id: vRC-0U-k6CI

Length: 22min 8sec (1328 seconds)

Published: Sun Aug 30 2020