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

MuffyMan

rb10 wrote: »

If RPI gets to, or near, 0, in March, then I would fully expect the loan rate for 2009/10 to be exactly the same figure. That is just following the T&Cs. I would however expect them to find a get-out clause if it went negative.

Interesting, thanks.
I think I'll avoid paying them off for the time being and see what happens. If they get to zero I'll be very happy! I agree with what you say about a get-out clause; I would fall off my chair if they follow the RPI into negative territory.
But looking at the wording in the link I posted earlier it says: "To date, the RPI has always been the lower of the two. The reduced bank base rate plus 1% is now lower than the March 2008 RPI so we have presently adjusted the student loan rate to 2.0%".
This implies to me (I may be wrong ,feel free to correct it) that the RPI they use is fixed in March (was 3.8%) and they have only changed the student rate because base rate + 1% is now lower. This would imply that the rates won't change until August unless base rates go even lower before then and since the base rate can't go below zero then the best we can hope for is 1% until August. But, this should also mean that if the RPI is zero or below then the student loan rate should be fixed at zero from Sep 09 - Aug 10 doesn't it?

Fire_Fox

MuffyMan wrote: »

This implies to me (I may be wrong ,feel free to correct it) that the RPI they use is fixed in March (was 3.8%) and they have only changed the student rate because base rate + 1% is now lower. This would imply that the rates won't change until August unless base rates go even lower before then and since the base rate can't go below zero then the best we can hope for is 1% until August. But, this should also mean that if the RPI is zero or below then the student loan rate should be fixed at zero from Sep 09 - Aug 10 doesn't it?

Exactly. So I am seriously thinking about applying for this year's full student loan (which I didn't bother taking) as well as next years. Money may come in handy and the rate is looking likely to be too low to pass up. :T

Masomnia

Fire_Fox wrote: »

Exactly. So I am seriously thinking about applying for this year's full student loan (which I didn't bother taking) as well as next years. Money may come in handy and the rate is looking likely to be too low to pass up. :T

Especially if you don't need the money you can get fixed rate bonds waaaay above the loan interest rate.

HangTime

lizwigg wrote: »

really the whole problem because women on average will have their loans longer because of the PAYE system. If was just like a mortgage system of repayment, we wouldn't have this problem, each gender would have an equal chance of paying back at the same rate

There's no reason why you can't 'force' a mortgage style (to some extent) repayment if you choose to do so, i.e. top up your PAYE contributions with additional payments. Obviously if you're earning megabux then you might repay it quicker than you would otherwise choose to, but in general it's pretty flexible. The current system is actually great for borrowers because it doesn't force people to make repayments in times when their income is low, although they choose to do so if they wish.

Surely enforcing a more orthodox 'mortgage style' repayment system would be bad news for expectant mothers given that they would still HAVE to keep up their payments even if they've given up work? The current student loan system is quite 'safe' because you know that if your salary drops (for ANY reason, whether that be maternity, redundancy, changing jobs or whatever), at least your outgoing are slightly reduced too (unless you want to maintain them at a higher level).

MuffyMan

I just heard something amazing on the Radio 4 PM yesterday, which made me livid. :eek:
Did you know that foreign students are also eligible for loans from SLC (funded by our tax money). Now there's nothing wrong with that, except that thousands have taken out the loans and 70% who have left university have not paid a penny back and probably never will. SLC are not, apparently by some law, allowed to even write a letter to the address of the students' parents. So unless the student takes the trouble to write to SLC detailing their circumstances and forwarding address they are never pursued. Thousands have defaulted on their loans and to date letters have been sent to 12 French students asking for payment. That's it! They interviewed a foreign student who said she had tried writing and phoning the SLC on how to pay back the loan and found it really difficult. Yet British students are tracked down by their NI number and hunted down like a dog if they dare to work abroad without telling SLC.

atypical

These "foreign students" are only those from the EU. They may only take out a student loan to cover tuition fees, they are not eligible for the maintenance loan; I expect this is due to EU law. It must be difficult to keep track of them if they return back to their home country.

Though remember it’s reciprocated. Should anyone from the UK wish to study anywhere else in Europe they are free to do so. From what I understand, most European universities don’t charge tuition fees.

MuffyMan

Yes, they are foreign students (no 'quotes' required) from other EU countries who don't pay UK taxes.

Lokolo

I thought they have had to be living in England for at least 3 years previously to be allowed loan?

Oldernotwiser

MuffyMan wrote: »

Yes, they are foreign students (no 'quotes' required) from other EU countries who don't pay UK taxes.

You really don't seem to have grasped the idea of the EU, do you?

Oldernotwiser

Lokolo wrote: »

I thought they have had to be living in England for at least 3 years previously to be allowed loan?

That's international students, not those from the EU.