Should I Pay Off My Student Loan? 2008/09 article discussion

Mela121 · 4 October 2008 at 5:50PM

Hi,

This is my background:

I have just entered my 3rd year of university. Each year I have applied for the full loans/grants/bursaries I can get. At the end of each term I have put excess cash (normally £1000 approx say) into my savings account (Flexi Saver HSBC) Currently I have approx £4500 in savings (I am going to open a HSBC ISA later this year and move some savings into it). I am due to graduate in summer 2009 with, lets say £23500 worth of debt.

I've just been reading Martins artical and from it it sounds like I should do the following:

Once I start to earn 15k+ i'll start having 9% of my wage deducted automatically.
I shouldn't make any additional payments on top of this (am i correct in saying these are called "overpayments?"), rather I should put any spare cash I would otherwise use to pay back my loan into a Cash ISA (HSBC)

So am I right in thinking that I should just, in essance, "forget" about my student loan, and simply wait until it is payed off (or witten off if I end up in a low wage job for the rest of my life!)

Also I am planning to take a Masters in 2010 (the course costs approx £4200 but hopefully i can pay for this with a scholarship and will not need a tuitionfee loan) - since I am paning on going back into education after a year out should i get a graduate account or another type?

Hope you can help!

Oldernotwiser · 4 October 2008 at 6:37PM

As far as repaying your student loan , you've got it spot on.

The_One_Who · 4 October 2008 at 11:29PM

All right except you'll pay 9% of your wage that is over £15,000. So if you earn £20,000 you'll 9% on £5,000. If that makes any sense.

Chris2685 · 5 October 2008 at 12:10AM

The_One_Who wrote: »

So if you earn £20,000 you'll 9% on £5,000. If that makes any sense.

Thanks, I didn't realise that! Good to know

sarahsquires · 7 October 2008 at 5:29PM

So am i understanding this right! Because i went to uni before 2006 my student loan will never be written off (well not till i'm 65!) but all others will get theirs written off after 25 years? Why is this? are they allowed the double standards?

Lokolo · 7 October 2008 at 5:50PM

That is correct.

It is like the people who started last year could get a grant if household income was £30k or less. This year is £60k or less.

Doesn't the system just suck?

dirtysexymonkey · 7 October 2008 at 5:51PM

sarahsquires wrote: »

So am i understanding this right! Because i went to uni before 2006 my student loan will never be written off (well not till i'm 65!) but all others will get theirs written off after 25 years? Why is this? are they allowed the double standards?

Because after they are paying more than £2000 more in fees, every year.

HelenkaS · 14 October 2008 at 5:05PM

jellybaby1610 wrote: »

I graduated in 2001 and took out a loan for the full 3 years of my degree, no payments have been taken from my wages even though I have been earning over the threshold for a number of years. does anyone know why this is?

Not that I want to pay back the money if I can help it, but I don't want to have to face a big bill later on.

also, if I went to Uni in 2008, does my loan fall into the post 2008 loan category or the pre 2008 category. I would have applied for it before the 2008 academic year began so am unsure.

I can't find any paperwork from this time and don't want to call the loan people for obvious reasons.

Do you mean you started in September 1998? If so unless you were a deferred entry (i.e. you applied to UCAS and had an offer of a place before Summer 1997) then you will be on the post 1998 system this means you would also have had to pay fees unless your parents income was below the threshold. Just to clarify to be on the old system (pre-1998) you wouldn't have paid fees regardless of parents income.
Pre-1998 - is the fixed term payback (Direct Debit not taken from Salary)
Post-1998 - is the Income Contingent Repayment (Taken from Salary)

As for your payments not being made although you earn over the threshold - as others have been advised either inform SLC, speak to your employer/HMRC or at very least calculate what you should have paid/should be paying and put it aside in a high interest savings account - should they come to you for back payments you'll have it + interest!

For more info on paying back student loans (including when they will be written off) see http://www.studentloanrepayment.co.uk/ it's one of the official Student Loans Company websites.

Hope that helps

HelenFS · 20 October 2008 at 2:48PM

Hi everyone,

It's my first post on here. Just wondering if I could have some advice? Here is my situation with regards to my SL:

Was at uni from 1998-2002
Graduated in 2002 with a £13996 SL
Income contigent loan and started making repayments in April 2003.
I've worked full-time for 5 years and then April 08 I went part-time cutting my salary by half and it is now £15,078.

So here are the queries!

1. I was recently sent the info to check SL balance online and the amount that is shown as my balance I don't agree with but I am worried that I haven't worked this out correctly.

Here are my records. Can anyone spot anything glaringly obvious? Am I being really daft and missing some vital point? To be honest, I probably have made some sort of error but I thought it would be best to check.
Get ready for the info...:rotfl:

2002 - Graduated with £13,996 SL

2003/2004 - made £800 in payments - 3.1% so £433.87 interest - difference £366.13
£13,629.87

2004/2005 - made £999 payments - 2.6% interest £354.37 - diff. £644.63
£12,985.39

2005/2006 - made £802 payments - 3.2% £415.53 - diff. £386.47
£12,598.91

2006/2007 - made £947 payments - 2.4% so £302.37 - diff. £644.63
£11,954.28

2007/2008 - don't know yet but know interest rate was 4.8%

The student loan portal has my balance up to 31/3/07 as £12,738.

2. Dare I post anything else after that?
As I have mentioned, I went part-time this April and my SL payments have stopped (I think I will owe them £7 a year???) anyway I have read Martin's brill article and I understand it, however, it is really difficult getting myself in this mindset especially when I have paid my SL for the last 5 years and I don't really want to have it creep back up to the original amount and more. Should I open an ISA and save the amount I used to pay or am I being ridiculous?

Thanks,
Helen

Chris2685 · 20 October 2008 at 9:26PM

If you stop making repayments, your loan will go up by 4.8% per year at the current rate.

So it will go up roughly £500 a year now (give or take a few quid) and will keep increasing, compounding each year as you will be making no more payments.

In my opinion, I would forget about the loan and just pay the money into an ISA that pays higher interest than the loan. Hopefully loan rates will go down next year with all these interest cuts that are going on!

Should I Pay Off My Student Loan? 2008/09 article discussion

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