Outlook on Student Loans?

FinanciallyUnsavvy · 6 March 2014 at 11:46AM

Hello folks

I'm just curious here - for those of you that have them, what's your take on student loans? Do you treat this as part of your overall debt... or are you like me, and just choose to act as if it doesn't exist?

For me, I don't think about it. I don't *have* to think about it. It's dealt with every month automatically in my wage slip. It doesn't show up on my credit report. I don't see it as a "real" debt.

Since I earn only a bit over the threshold I'm paying something silly back like £11 a month which I don't think even covers the interest at the mo.

It'll be written off when I'm 60 anyway...!

Now, maybe if I was on 50k a year or some other unholy amount that meant a sizeable chunk of my pay was getting eaten away, maybe I could see the point in overpaying and rushing to get it cleared. But as it stands, to me it just seems like the most ludicrous idea. Why worry about it?

Just interested to see how many other people share my, er, 'non-chalant' outlook to it!

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fermi · 6 March 2014 at 11:56AM

I had arrears on mine that could not be deferred, so did not consider myself to be "debt free" until I cleared those.

But once I did, yes, despite still owing a substantial balance on the rest of them I was happy to consider my self debt free under my definitions. While it obviously is a real debt, I don't consider SLs to be the same in the practical sense of how I feel about my situation.

thecassman86 · 6 March 2014 at 12:44PM

I graduated in 2007 with a £14k student loan and have ignored it since.

Out of interest for replying to this(!) i now pay £98/month towards it, but as you suggested, it's pre-net so i never see it on my bank statement or anything.

It's considered a good debt. You only pay when earning over a threshold, it's real-time (i.e. changes in wage immediately feed through), there's little interest, and the amount to pay is small (currently 9% of anything over £15k per year)...

It amazes me when people take loans out to pay them off!!! A bank loan is expected to be paid every month, charges a lot more interest and if you lost your job tomorrow will still be deducted next month. None are the case for student loans.

Ignore it

FinanciallyUnsavvy · 6 March 2014 at 12:55PM

thecassman86 wrote: »

It amazes me when people take loans out to pay them off!!! A bank loan is expected to be paid every month, charges a lot more interest and if you lost your job tomorrow will still be deducted next month. None are the case for student loans.

Ignore it

I agree! I know a few people who have gone out of their way to pay them off as quickly as possible. It absolutely astounds me as surely it holds no benefit whatsoever.

I'm glad to see I'm not the only one who thinks the same. I was beginning to worry whether I should be factoring in my £18k+ student loans to my overall debt. A scary prospect...

Stroppypops · 6 March 2014 at 12:59PM

I hate the decuctions from mine. I'm 28 and been paying it off for three years now. It initially started at 20k and is going down slowly. I pay about £180 each month. Last month I got a bonus and saw deductions of £550 for student loan.

I cannot wait to get it paid off and see this money in my bank instead. I have other things to pay off with higher interest rates so I just leave it but when it's paid off I will be happy.

At 1.5% interest I won't bother overpaying it.

thecassman86 · 6 March 2014 at 1:06PM

Stroppypops wrote: »

I hate the decuctions from mine. I'm 28 and been paying it off for three years now. It initially started at 20k and is going down slowly. I pay about £180 each month. Last month I got a bonus and saw deductions of £550 for student loan.

I cannot wait to get it paid off and see this money in my bank instead. I have other things to pay off with higher interest rates so I just leave it but when it's paid off I will be happy.

At 1.5% interest I won't bother overpaying it.

Ouch that's a lot!! But, it means you earn well which is good!

I too get a bonus every March (in 2 weeks, yay! :T) so i'll get a nasty blast of extra SL too. I can't wait to get it gone but i'll never do anything to speed it up. It's there, it'll be there for a bit longer yet, oh well.

A school friend of mine left university the same year as me and she became a freelance journalist. Because of the way her pay works out she was only paying £1 per month for a long time!! So, had her pay not changed it meant her debt would be paid off around the year 3200!! :rotfl:

Idiophreak · 6 March 2014 at 1:14PM

I never worried about it...but as my wages increased over the years, I *was* aware of a decent chunk of cash vanishing each month...In the end, clearing it gave me the equivalent of a 6k pay rise, which was much appreciated...so I can understand why some people want to get to that stage ASAP.

thecassman86 · 6 March 2014 at 1:25PM

Idiophreak wrote: »

I never worried about it...but as my wages increased over the years, I *was* aware of a decent chunk of cash vanishing each month...In the end, clearing it gave me the equivalent of a 6k pay rise, which was much appreciated...so I can understand why some people want to get to that stage ASAP.

Oh i'm definitely looking forward to the boost of funds when it's gone. It'll feel like a large, additional pay rise and will be welcomed warmly!!

I've not taken the time to work out how much i have left and how long i have left to pay back. I'm 27 now; i think when i got my graduate job i figured i'd be around 40 when it was paid up but i've changed jobs since then and earn a chunk more. I imagine it'll still be another 7 or 8 years though at least.

lhead123 · 6 March 2014 at 1:34PM

I graduated in 2008 and have not since earned over the threshold. I couldnt get a job relating to my degree and went into office admin so i was at least earning, but as it was only £14000 a year i didn't pay....Me and OH then decided to start a family so i have been working part time since having DD and now we have another on the way, i will be part time for a while.
I don't consider mine a debt as i don't pay anything towards it. I get an annual statement and it gets interest added on each year, but other than that i kind of ignore it.

In the future when i get back into full time work, I will probably start to hate the monthly payments and will consider starting to pay extra towards it then t get it cleared quicker, but it will very much depend on what i'm earning, how much is being deducted and what sort of financial situation i'm in!

I'm more concerned about the £2000 overdraft and £500 creditcard i used up while in uni and have completely failed to think about paying off until now!

National_Debtline · 6 March 2014 at 1:59PM

This is an interesting question for sure. Our general approach is that we would include it as a debt when calculating the total liabilities for our caller. New-style loans generally look after themselves, and the amount taken would be based upon earnings - as such there isn't much that can be done to change that. Old-style loans are a little different as they would generally be treated on a pro-rata basis with other loans, credit cards or overdrafts.

David.

Stroppypops · 6 March 2014 at 2:05PM

thecassman86 wrote: »

Oh i'm definitely looking forward to the boost of funds when it's gone. It'll feel like a large, additional pay rise and will be welcomed warmly!!

I've not taken the time to work out how much i have left and how long i have left to pay back. I'm 27 now; i think when i got my graduate job i figured i'd be around 40 when it was paid up but i've changed jobs since then and earn a chunk more. I imagine it'll still be another 7 or 8 years though at least.

You don't need to work it out. Just go to studentloanrepayment.co.uk enter your details and it will bring all your details up. It also has a calculator to work out where it stands. I fill in mine every month and it saves your details.

Outlook on Student Loans?

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