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    • Ed-1
    • By Ed-1 1st Feb 17, 9:03 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    Thanks for the information. Any idea if I can make all of the 9% payments go towards the Plan 2 loan, or adjust the split somehow?
    Originally posted by tesuji
    No you can't as this policy is set down in regulations. In fact the actual submission to the minister in 2011 has been released through freedom of information which explains how the decision on repayments for dual borrowers was arrived at. This can be found here:

    https://www.whatdotheyknow.com/request/230088/response/579884/attach/4/Annex%202%20Submission%20Dual%20loan%20repayments. pdf

    HOWEVER, the good news is the Government has frozen the higher £21,000 threshold for at least 5 years which reduces the amount going towards your plan 1 loan, and increases over time the amount going to your plan 2 loan. For this reason, you're one of the few borrowers (like me) that should be praising the freezing of the higher threshold (unlike Martin Lewis). You, as I am, should be hoping the plan 1 threshold is allowed to catch up before the £21,000 threshold is increased (in that way, all repayments will go towards the plan 2 loan first).
    Last edited by Ed-1; 01-02-2017 at 9:15 PM.
    • TigerLily7
    • By TigerLily7 11th Apr 17, 9:11 PM
    • 59 Posts
    • 82 Thanks
    TigerLily7
    Should I make overpayments?
    I am on a Plan 1 Student Loan (started in 2005) and have a debt of £32,000.

    Last year I paid £700 from PAYE but £380 was applied at interest. I'm not sure if I should make overpayments - could that work out better in the long run?

    And am I right to say it will be wiped at the age of 65?

    Any advice would be really appreciated.
    Curating a life based on mindfulness, intentional spending and saving.
    • Ed-1
    • By Ed-1 11th Apr 17, 11:08 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    I am on a Plan 1 Student Loan (started in 2005) and have a debt of £32,000.

    Last year I paid £700 from PAYE but £380 was applied at interest. I'm not sure if I should make overpayments - could that work out better in the long run?

    And am I right to say it will be wiped at the age of 65?

    Any advice would be really appreciated.
    Originally posted by TigerLily7
    Yes, pre-2006 loans are cancelled at aqe 65.

    Is the full £32,000 from the same pre-2006 course? I can't imagine it would be other than for an unusually long course such as Architecture as tuition fees weren't even £3,000 for pre-2006 courses and for some they were free (max of £1,200 ish but means tested).
    • TigerLily7
    • By TigerLily7 12th Apr 17, 5:36 PM
    • 59 Posts
    • 82 Thanks
    TigerLily7
    Yes, pre-2006 loans are cancelled at aqe 65.

    Is the full £32,000 from the same pre-2006 course? I can't imagine it would be other than for an unusually long course such as Architecture as tuition fees weren't even £3,000 for pre-2006 courses and for some they were free (max of £1,200 ish but means tested).
    Originally posted by Ed-1
    Thanks, Ed.

    I started a course in 2005 and left to start another course in 2007 (which finished in 2011). Does that change anything?
    Curating a life based on mindfulness, intentional spending and saving.
    • Ed-1
    • By Ed-1 12th Apr 17, 8:34 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    Thanks, Ed.

    I started a course in 2005 and left to start another course in 2007 (which finished in 2011). Does that change anything?
    Originally posted by TigerLily7
    Yes. Any borrowing from the pre-2006 start is written off at age 65.

    Any borrowing for the post-2006 start is written off 25 years after loan entered repayment (April after leaving).
    • TigerLily7
    • By TigerLily7 12th Apr 17, 8:59 PM
    • 59 Posts
    • 82 Thanks
    TigerLily7
    Yes. Any borrowing from the pre-2006 start is written off at age 65.

    Any borrowing for the post-2006 start is written off 25 years after loan entered repayment (April after leaving).
    Originally posted by Ed-1
    Thank you, Ed. Really kind of you to reply!

    Do my payments go towards both equally? Is there any way I can manage my repayments to reduce interest mounting up?
    Curating a life based on mindfulness, intentional spending and saving.
    • Ed-1
    • By Ed-1 13th Apr 17, 6:59 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    Thank you, Ed. Really kind of you to reply!

    Do my payments go towards both equally? Is there any way I can manage my repayments to reduce interest mounting up?
    Originally posted by TigerLily7
    As they're both pre-2012 loans, they both have the same interest rate. No, it's not possible to decide yourself which academic year's loan balance to apply your repayments to unless it is a voluntary repayment. The repayment is split proportionally across all loans in proportion to the outstanding balance of that loan.

    See the SLC's response to this freedom of information request here: https://www.whatdotheyknow.com/request/icr_student_loan_cancellation_re_2#incoming-569571

    The loans for courses A, B and C are all added together for repayment purposes.

    Although borrowers are shown a grand total outstanding loan balance, each academic year's loan has a separate balance. Any income contingent repayment made is split across all loans that are in repayment status, in proportion to the outstanding amount of each loan, for example, a borrower has loans with outstanding balances of £2,000, £2,000 and £1,000. The borrower makes a repayment of £100. This will be split £40/£40/£20, i.e., 40%/40%/20%. Voluntary repayments will also be split in this way unless the borrower requests that the repayment be applied to a particular loan balance.

    As the loans have separate balances, each outstanding loan balance will be cancelled when the cancellation date for that particular loan falls due.
    • TigerLily7
    • By TigerLily7 13th Apr 17, 8:40 PM
    • 59 Posts
    • 82 Thanks
    TigerLily7
    As they're both pre-2012 loans, they both have the same interest rate. No, it's not possible to decide yourself which academic year's loan balance to apply your repayments to unless it is a voluntary repayment. The repayment is split proportionally across all loans in proportion to the outstanding balance of that loan.

    See the SLC's response to this freedom of information request here: https://www.whatdotheyknow.com/request/icr_student_loan_cancellation_re_2#incoming-569571

    The loans for courses A, B and C are all added together for repayment purposes.

    Although borrowers are shown a grand total outstanding loan balance, each academic year's loan has a separate balance. Any income contingent repayment made is split across all loans that are in repayment status, in proportion to the outstanding amount of each loan, for example, a borrower has loans with outstanding balances of £2,000, £2,000 and £1,000. The borrower makes a repayment of £100. This will be split £40/£40/£20, i.e., 40%/40%/20%. Voluntary repayments will also be split in this way unless the borrower requests that the repayment be applied to a particular loan balance.

    As the loans have separate balances, each outstanding loan balance will be cancelled when the cancellation date for that particular loan falls due.
    Originally posted by Ed-1


    Thank you, Ed!
    Curating a life based on mindfulness, intentional spending and saving.
    • Rickster1978
    • By Rickster1978 5th Jul 17, 7:22 AM
    • 37 Posts
    • 7 Thanks
    Rickster1978
    Should I pay or should I go now!!
    Hi all

    Hoping this is the correct thread to get a bit of advice.

    I'm on a pre-1998 student loan (I know, I know, I don't look old enough). I've seen that the rate is set to increase from 1.6% to 3.1% in September so wondering if I should focus on getting it repaid. My only other debt is my mortgage at 2.19%. I'm guessing I've got about £3-£4K outstanding on the student loan as I've been repaying it for about 3 years now.

    Just wondering if it's worth paying it off now or whether I'm better off putting any spare money in savings and pay it off in a lump sum. I'm guessing I'd need a decent savings rate for that to be the better option.
    • naf123
    • By naf123 5th Jul 17, 9:23 PM
    • 1,124 Posts
    • 1,185 Thanks
    naf123
    Yes. Any borrowing from the pre-2006 start is written off at age 65.

    Any borrowing for the post-2006 start is written off 25 years after loan entered repayment (April after leaving).
    Originally posted by Ed-1


    I started in 2005, dropped out (did not borrow anything) but continued a new course in 2006 - with borrowing.

    Where is the actual evidence that it will be wiped out after 25 years despite starting in 2005/ not borrowing?


    Thanks
    • rubuhoeikanaika
    • By rubuhoeikanaika 8th Jul 17, 11:53 AM
    • 243 Posts
    • 226 Thanks
    rubuhoeikanaika
    I personally think this page needs to be improved in three ways, relating to whether people should make voluntary overpayments.

    1) Even if you click the post-2012 tab (where you can see that current rates are up to 6.1% for many borrowers), the following text still occurs lower down: "With student loan interest rates at 1.6%, it's extremely unlikely most other debts – whether credit cards, loans or hire purchase – are costing you less, so always pay those off before even contemplating touching your student loan." This is straightfowardly incorrect I think, many people paying 6.1% will be paying more in loan interest than on eg a mortgage.

    The issue is just more complicated than the page makes out. Even if you are paying 6.1%, if your balance is so high you are unlikely to pay it off, then you are throwing money away by making overpayments -- you will keep paying the same amount until it is written off.

    2) I think it should also give more emphasis, rather than just mentioning in passing: "Plus student loan debt has the safety that it needn't be repaid if your income drops." If I have both a 20k student loan and a 20k credit card, even if I'm paying £150 a month on each and more interest on the loan, I should pay the card off first probably. If I lose my job, the loan won't be a problem but the card will.

    3) I don't think there's any discussion of plan 2 borrowers who failed to graduate. These people will *not* have their loans written off, as far as I understand it. They may wish to consider paying them off if they have the income. (I think! Not seen much discussion of this point.)
    • silvercar
    • By silvercar 8th Jul 17, 1:39 PM
    • 35,881 Posts
    • 151,091 Thanks
    silvercar
    I personally think this page needs to be improved in three ways, relating to whether people should make voluntary overpayments.

    1) Even if you click the post-2012 tab (where you can see that current rates are up to 6.1% for many borrowers), the following text still occurs lower down: "With student loan interest rates at 1.6%, it's extremely unlikely most other debts – whether credit cards, loans or hire purchase – are costing you less, so always pay those off before even contemplating touching your student loan." This is straightfowardly incorrect I think, many people paying 6.1% will be paying more in loan interest than on eg a mortgage.

    The issue is just more complicated than the page makes out. Even if you are paying 6.1%, if your balance is so high you are unlikely to pay it off, then you are throwing money away by making overpayments -- you will keep paying the same amount until it is written off.

    2) I think it should also give more emphasis, rather than just mentioning in passing: "Plus student loan debt has the safety that it needn't be repaid if your income drops." If I have both a 20k student loan and a 20k credit card, even if I'm paying £150 a month on each and more interest on the loan, I should pay the card off first probably. If I lose my job, the loan won't be a problem but the card will.

    3) I don't think there's any discussion of plan 2 borrowers who failed to graduate. These people will *not* have their loans written off, as far as I understand it. They may wish to consider paying them off if they have the income. (I think! Not seen much discussion of this point.)
    Originally posted by rubuhoeikanaika
    I agree with point 1 - in fact I have highlighted this to the MSE team.

    point 2, I think, has been emphasised again and again.

    point 3 - I have not heard this - do you have a source? Even if their loans are not written off, overpaying may still be a bad idea, as it would be a debt that may never need to be cleared.
    I'm a Board Guide on the Debate House Prices & the Economy, House Buying, Renting & Selling, Mortgages and Endowments, In My Home incl DIY, Overseas Holidays & Student boards.
    I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Board guides are not moderators and don't read every post. If you spot an abusive or illegal post then please report it to forumteam@moneysavingexpert.com. Any views are mine and not the official line of moneysavingexpert.com.
    • rubuhoeikanaika
    • By rubuhoeikanaika 8th Jul 17, 2:27 PM
    • 243 Posts
    • 226 Thanks
    rubuhoeikanaika
    I agree with point 1 - in fact I have highlighted this to the MSE team.

    point 2, I think, has been emphasised again and again.

    point 3 - I have not heard this - do you have a source? Even if their loans are not written off, overpaying may still be a bad idea, as it would be a debt that may never need to be cleared.
    Originally posted by silvercar
    2) Agreed, but if this is supposed to be a 'one stop shop' page for the info, I think they should make a bigger deal of it. If I were them, I'd split it into "cashflow considerations" and "lifetime debt considerations".

    3) Hmm actually now I'm struggling to find it.
    • Ed-1
    • By Ed-1 8th Jul 17, 4:59 PM
    • 1,979 Posts
    • 1,057 Thanks
    Ed-1
    2) Agreed, but if this is supposed to be a 'one stop shop' page for the info, I think they should make a bigger deal of it. If I were them, I'd split it into "cashflow considerations" and "lifetime debt considerations".

    3) Hmm actually now I'm struggling to find it.
    Originally posted by rubuhoeikanaika
    The write-off applies to anyone not in breach of the terms, not just those who finished the course.
    • jenny_f
    • By jenny_f 29th Jul 17, 8:56 AM
    • 872 Posts
    • 342 Thanks
    jenny_f
    I have a student loan, started in 2004 and graduated in 2007.

    I have just under £4,000 left on it. I am paying around £70 per month out of my wage.

    I am in a lucky position where I could just pay this off and clear it. I am obviously going to clear it through my wage anyway, this way would just mean it's done sooner.

    I do have a mortgage (1.49% I think) so should I put towards that or just clear the student loan.
    Last edited by jenny_f; 29-07-2017 at 10:52 AM.
    • Mogley
    • By Mogley 31st Jul 17, 10:07 AM
    • 211 Posts
    • 176 Thanks
    Mogley
    I do have a mortgage (1.49% I think) so should I put towards that or just clear the student loan.
    Originally posted by jenny_f
    The student loan interest rates are guaranteed to be BOE base rate +1% or RPI inflation, whichever is the lowest. So current rate is 1.25%. If I had the option then I would overpay the mortgage before the student loan with your current situation. There may be other options you should consider before overpaying the mortgage because 1.49% is a low rate which you could beat with savings.
    No.25 for 2017 £1070/£4000 saved.
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
    • MollyK
    • By MollyK 6th Aug 17, 8:37 AM
    • 1 Posts
    • 0 Thanks
    MollyK
    When would my student loan be wiped off?
    Hi I started my 3 year course in Sept 1998 and took out a student loan. I have a mortgage and do not earn above the threshold. When would my student loan be wiped off?
    • sheramber
    • By sheramber 6th Aug 17, 5:07 PM
    • 3,576 Posts
    • 2,657 Thanks
    sheramber
    Hi I started my 3 year course in Sept 1998 and took out a student loan. I have a mortgage and do not earn above the threshold. When would my student loan be wiped off?
    Originally posted by MollyK
    If you mean you have a mortgage style loan

    n some circumstances you may have any outstanding balance written off, as long as you’re not behind on your repayments. For example, if you:

    reach the age of 50 (or 60 if you were aged 40 or more when you last took out a loan)
    become permanently unfit for work due to a disability
    die
    haven’t paid back the full amount of your loan(s) 25 years after you start repaying.


    https://www.nus.org.uk/en/advice/money-and-funding/how-and-when-do-i-repay-my-student-loan/
    • Mogley
    • By Mogley 8th Aug 17, 12:50 PM
    • 211 Posts
    • 176 Thanks
    Mogley
    Hi I started my 3 year course in Sept 1998 and took out a student loan. I have a mortgage and do not earn above the threshold. When would my student loan be wiped off?
    Originally posted by MollyK

    When you are 65.
    No.25 for 2017 £1070/£4000 saved.
    You should pay attention to the needs of the moment - otherwise there is no future. But to ignore the future is foolish - living solely for the moment leaves nothing for when the next moment arrives.
    • Budweiser_072000
    • By Budweiser_072000 10th Aug 17, 5:05 PM
    • 124 Posts
    • 142 Thanks
    Budweiser_072000
    I recently got a new job and my loan repayments have now started coming through (finished uni 3 years ago) my first one for this month was £155!

    Is it just me or is that high? currently on £28k a year
    Current Debt - £13k+
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