Mis-sold my student loan!

melancholly

Nixxx wrote: »

Ps, without being pedantic...i believe the official measure of inflation is now the Conusmer price Index but the student loan is based on the RPI. (Not sure if i'm totally correct here so please correct me if i'm wrong). Now as of March 07 the RPI was 4.8% so we are paying that interest amount from september 07 to august o8. But if the measure the government chooses to measure inflation is the CPI which was 3.1%. Therefore we are paying more than we should.

i did a calculation of this on the student board a while back. went to ONS and got the lists of RPI for the last 20 years. the student loan interest rate is based on one month's figures (march) so i compared it with the average RPI for the year. essentially it seems to go that one year students pay a little more than the average and the next year, a little less. it evens out and it is very short sighted to look at this over one year and not the 10 or so that it will take to pay back (on a optimistic schedule!). i didn't compare it against CPI but both are measures of inflation that can be accepted for different reasons.

i did suggest that all the graduates complaining that the were paying above the average RPI for this year should maybe ask to pay a bit extra when the calculation works in their favour . bit cheeky, but it does seem like a lot of complaints are being made by people who haven't read the terms they signed and who haven't looked into it beyond one year......

this is the ONLY loan you can get where the lender determines your repayments by your income, so that if you lose your job they won't harass you for money. it's also really important that graduates pay back their money so that it enables other students to go to uni. i'm very negative about the need to send 50% of the population to uni, but one positive side effect of the loan system is that uni is a choice for most people - in the past it was something that one a select few could afford to think about

recyclingbox

theexo51 wrote: »

My apologies if this has been posted before, i have searched but not found anything.

Has anyone tried suing the SLC over mis-selling loans? Due to the level of my pay, even as a graduate, since the rise in interest rate i now pay back 50% of what my interest is per year..

This is surely completely backwards...how can they do this?

Just trying to get out of paying back some money you owe. You borrowed it. You spent it .You pay it back.

neas

Im sure you didnt think about it when it was paying for beer fags and nights out every week at the student union.

Also... I guess because you arent earning much higher than the 15k threshold.. you will now want to sue your university for offering you a degree that didn't yield the promised pay to cover your student loan.

Lovely world we live in, where instead of taking personal responsibility for your life, your choices you want to blame anyone but yourself.

CLAPTON

melancholly wrote: »

i did a calculation of this on the student board a while back. went to ONS and got the lists of RPI for the last 20 years. the student loan interest rate is based on one month's figures (march) so i compared it with the average RPI for the year. essentially it seems to go that one year students pay a little more than the average and the next year, a little less. it evens out and it is very short sighted to look at this over one year and not the 10 or so that it will take to pay back (on a optimistic schedule!). i didn't compare it against CPI but both are measures of inflation that can be accepted for different reasons.

i did suggest that all the graduates complaining that the were paying above the average RPI for this year should maybe ask to pay a bit extra when the calculation works in their favour . bit cheeky, but it does seem like a lot of complaints are being made by people who haven't read the terms they signed and who haven't looked into it beyond one year......

this is the ONLY loan you can get where the lender determines your repayments by your income, so that if you lose your job they won't harass you for money. it's also really important that graduates pay back their money so that it enables other students to go to uni. i'm very negative about the need to send 50% of the population to uni, but one positive side effect of the loan system is that uni is a choice for most people - in the past it was something that one a select few could afford to think about

The RPI is an index and NOT a rate of inflation.

The inflation rate is the difference in the index between two fixed date one year apart divided by the earlier value.
So averaging the inflation rate really has no real meaning.
It is therefore automatically true that if there is a sudden one off peak or trough (although no-one except pensioners care about troughs) on an indicator month hence giving a high (or low) value for the rate of inflation, then in the following year there will be a corresponding fall (or rise ).
Remember all the fuss about the pensioners getting only 70p because the rate of inflation was so low?

melancholly

CLAPTON wrote: »

The RPI is an index and NOT a rate of inflation.

The inflation rate is the difference in the index between two fixed date one year apart divided by the earlier value.
So averaging the inflation rate really has no real meaning.
It is therefore automatically true that if there is a sudden one off peak or trough (although no-one except pensioners care about troughs) on an indicator month hence giving a high (or low) value for the rate of inflation, then in the following year there will be a corresponding fall (or rise ).
Remember all the fuss about the pensioners getting only 70p because the rate of inflation was so low?

if you really want to be pedantic, it is an index when it is calculated as RPI but then it is a rate when it is applied to the loan as the amount of interest that will be paid for the next year.... but i think that's splitting hairs for no purpose!

CLAPTON

melancholly wrote: »

if you really want to be pedantic, it is an index when it is calculated as RPI but then it is a rate when it is applied to the loan as the amount of interest that will be paid for the next year.... but i think that's splitting hairs for no purpose!

yes indeed

what I am trying to say is that averaging the rate doesn't really mean much and that although one years figure may seem high (or low) then its automatically corrected the following year... In fact exactly what you showed by looking at 10 years worth of data.

melancholly

the point is that the index from a single month determines the interest rate for an entire year - sometimes that means students get a good deal, but other times it's just an artificially high month. a lot of students got very upset at the interest rate for the last year as it was higher than it has been - the whole point of my calculation was to show that you can't look it the loan for just that one year, you need to take into consideration a longer time period. also - the RPI for march may seem unrepresentative when it is higher than the other months of the year, but equally often it's lower and no-one ever complained then!

i think we're saying the same thing!

mizzbiz

I don't think you can sue for misselling but I think you should be able to.

How many 18yr old school leavers supposed to be able to understand compound interest. I'm furious that i'm paying interest on the interest on my student loan, I certainly didn't undertsand this and the 'salesperson' never pointed it out to me.

mizzbiz

I also don't agree that student loans should fund the next generation of students.

Prior to 1996 and the absolutely abhorrable Blair, University was paid for by taxes. Now I wouldn't complain if i'd had a tax reduction when student loans came in since it was no longer funding this, however I didn't. The extra money has been spent elsewhere. So much for free education.

No one is trying to get out of what they owe, the problem is it's a ball and chain and ultimately, just a never ending extra 'Graduate Tax' Absolutely disgusting!

tinkerbell84

mizzbiz wrote: »

I also don't agree that student loans should fund the next generation of students.

Prior to 1996 and the absolutely abhorrable Blair, University was paid for by taxes. Now I wouldn't complain if i'd had a tax reduction when student loans came in since it was no longer funding this, however I didn't. The extra money has been spent elsewhere. So much for free education.

No one is trying to get out of what they owe, the problem is it's a ball and chain and ultimately, just a never ending extra 'Graduate Tax' Absolutely disgusting!

Taxpayers still pay for the majority of a student's education.

The fees don't cover anything like the cost of a degree anyway - it merely subsidises it!

Why shouldn't you pay towards your education?