Pyramid Comment

This journal takes an alternative view on current affairs and other subjects. The approach is likely to be contentious and is arguably speculative. The content of any article is also a reminder of the status of those affairs at that date. All comments have been disabled. Any and all unsolicited or unauthorised links are absolutely disavowed.

Monday, December 20, 2010

Student Loans: The Belief

The following discussion is purely illustrative to support the
figures generated by the principles



Note added: 26.08.2011

The recent harvest of school-leavers scrambling around for placements has raised an interesting question: it is unclear whether students believe the acquisition of a massive debt (student loan) still as a teenager taken out if before 2012 will cost the 2010/2011 rate (£3290) for the next three years or just produce the 1st installment at the lesser rate. Years 2 and 3 will be at the higher 2012 rate (£9000). That'll produce some nasty shocks and provide the wake-up call to the betrayal - DA.

The situation that government would have everyone believe is that there is no ‘up front’ payment to be made by the student and will only be payable after the course is completed and earnings are in excess of the £21,000 that triggers repayment. Installments would be 9% of the amount above the threshold. This is typical of politics and no lie is actually made, but the truth can be very different. The interest clock starts ticking from the very first day of the first year or from the moment that the loan is advanced. Year one = £9,000. Debt already rising even before another £9,000 is added.(total = £18,000). By the time the full £27,000 has been advanced over three years (or £36,000 over 4 years), the capital has already begun to grow.

Earnings of £21,000 and 9% of £0 = £0. Nothing to be repaid, but the interest clock is definitely started. No doubt or speculation. Amount of loan = £27,000 and the amount due to be repaid is £0. The maximum interest growth can be applied.

1/12th of the annual interest of the Retail Price Index that applies at the time (variable), say 1.5%.

As at 27.06.2011 the 

RPI = 5.2% 



  • That the government is behind the scheme makes it (speciously) legal. Rather like council tax that is technically extortion by demanding money with menaces (prison for defaulting), but again as government is behind it this is spun around to suddenly become LEGAL

  • Non payment of taxes is legal depending on who you are. For the average person it's illegal.
It's definitely a Them and Us society and not necessarily in the same domiciliary country.

It will be applied to the first month balance of £27,000. Interest due: £405 and spread over the year equates to £405/12 = £33.75. Add to this the amortisation (£0.51 = 1.5% of 1.5%  = 0.0225%) and after just the first month the debt grows: £27,000 -> £27,034.26 (£27,000 + £33.75 + £0.51) and can only increase as no payments are made. The amortisation may not appear a great deal (£0.51), but it's still a growing (small) amount every month. Consider the principle when applied to Credit Card Debt. The balance continues to rise monthly adding an ever-greater yield from amortised interest. Nothing is free. Ever. The problem is to decide what is being charged. And how.

The real debt begins much earlier and the loan itself grows BEFORE any interest can EVEN BE applied. When the realisation become apparent, the instigators of the scheme will be long gone. Or forgotten. It's how politics works and it's truly wicked



Interest applied to the entire loan is the same for anything where earnings are below the threshold, currently less than £15,000, but to increase to £21,000. Whenever this threhold figure is increased it simply means that government takes more in interest as repayments are not made and the original borrowing remains the same. Applied (amortised) interest raises the yield. Government definition of growth. The parasite feeds on more and it's appetite is insatiable. Assuming the full £27,000 was financed. The 'repayable' trigger may operate from the 90th day, but still fails to define when the interest clock (retrospectively? DA) starts ticking: Day 1 or Day 90?

  • This entire scenario cannot be confirmed or otherwise since the necessary information is not provided by government and that, by itself, is extremely disturbing, but if on the path of truth demonstrates government duplicity by 'hiding' highly pertinent information. 'Hiding' only implies deceit if explicit, but government instead plays the 'spin' game by 'not revealing'. NOT 'not hiding'. This is simply telling half-truths that cannot be explicit lies. This is politics or parasitics (the mechanics of the parasite).
This has been confirmed (DA): it's Day-1 after the 1st installment of the 1st year is credited. So the interest clock begins a full three years before any repayment becomes mandatory. Assuming a salary of £21,000 or more is being received.
    With earnings of £21,000, the interest clock is definitely triggered and amounts to the maximum interest possible. Repayment is £0.00 and amortised interest at 1.5% (£33.75 + £0.51) is applied on the full £27,000. This maximises the interest yield, but with earnings of £21,001 the amount required for repayment is 9% of £1.00 (£21,001 –  £21,000 = £0.09). Balance might be assumed to come down (£26,999.91), but with the interest added to the actual balance after the first month this results in £27,000 + £33.75 less £0.09 = £27,033.66 (interest added before deduction of repayment). If deduction of repayment is made before interest is applied (the other way around): £27,000 - £0.09 = £26,999.91. With the 1.5% interest levy on this balance results in still… £33.75. With amortisation this grows by £0.51 and becomes a new debt after one month of £27,033.66. So, if earnings trigger the threshold interest clock, then the debt just grows monthly. The very small (required) contribution of 9p amounts to essentially nothing added to reduce the debt even though £33.75 has been paid in. This is true growth. Parasitic growth by feeding off a host. The graduate student works for the government. But pays to government. (Paying the government. To work!!! - DA)

    What safeguard is there concerning raising this 9% interest rate? None. The 9% of salary can very easily change in the same way that the threshold can be raised or lowered at government whim. In a heartbeat. There is absolutely no way to predict  movements (other than assuming that governments are in the business of growth). No guarantees. And nothing is fixed for the debtor, but easily movable by the lender.

    To break even by paying just enough to cover the growing debt, at least a £34.26 contribution must be made.

    Initial debt = £27,000

    • £405 + £6.08 = £411.08 (Annual)
    • £34.26 (Monthly)
    • Total after first month = £27,411.08 (£27,000 + £411.08)
    • Less £411.08 = £27,000 Final debt
    This calculation does not take into account the raised initial debt by the addition of applied interest from Day 1 of Year 1

    A salary of at least £26,000 is necessary to make any sort of dent in the debt. To illustrate this claim:

    • £26,000 – £21,000 = £5000
    • 9% of £5000 = £450 
    • Monthly this equates to £37.50
    Adding interest (1.5%) to the £27,000 results in £27,033.75. Repayment of £37.50 creates a new debt balance of £26,996.25. With amortisation this grows by £0.51 (£26,996.76). Even if an overall debt actually gets smaller (by just £3.76), the debt still grows. It’s a slow death. It’s 10 steps forward followed by sliding back by 9.9 steps. It grows. And grows in true lending fashion.

    It's critical that a lower paid job is NOT undertaken just to avoid repayment entry. The interest is applied to a continuously high amount. The original loan and the amortised interest.

    Generally, interest is added before any deduction through a repayment.

    It’s banking (money moving) procedure

    This entire 'scheme' is quite horrific in it's scope for entrapment. Once snared there is no way out, unless you come from a wealthy family that wouldn't need a loan anyway. The scheme design to stop wealthy students paying back a loan early is just a very nasty and exceptionally cynical red-herring.


    • It's sincerely hoped that someone can torpedo this argument, even if logic and understanding government method produced it. This discussion has been developed to raise awareness and caution and not to prevent progression. That is free-will, but should be a contract only entered with eyes wide open.
    • The pragmatic advice from this discussion is to not engage in the University route unless a secure position can be guaranteed and unless there is a real need to 'go to university'. Not many years ago, university was the next step in life development. It was the 'done thing'. Not any more.
    • Clearly, the university path is the new way to make money. The parasites feed off the fresh and innocent student host. Should the (hopefully) graduate desire to 'get onto the property market' (another old method of wresting money by attaching huge long-term interest onto a loan) the post-graduate will have a student loan and mortgage to pay for - assuming a deposit can be paid 'up front' - and that could be raised by yet another loan. With interest attached. Everything is designed to require a loan of some sort that then pays interest to the lender... for doing nothing.
    • The young graduate can look forward to a lifetime paying one debt after another. After another. After another...
    • For most this is not thinkable. The financial consequences in a very insecure global economy is very threatening. The interest applied after only as few years from when the loan becomes repayable (after graduation) cannot be even be estimated and the interest clock has started ticking a long time BEFORE that. This is the same caution that a potential property purchaser must consider. A manageable debt today could become a stranglehold very quickly afterwards. Long term job security is paramount.
      This may foretell an elitist society and the consequences are just too dire to contemplate. The rich will live to rue their day (for a short while). Through the continued perception of rising to the top of a pyramid, destruction is obvious. When the parasite kills the host then it's the end of the game.


      The blind rich are so


      lethally stupid