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

Numenor

Deelighted wrote: »

Hi Guys I'm hoping thats there is help out there :T
I've scanned the forum and appologise if the answer to my question has been posted but here goes. My loans taken out with Student Loan Company in 1996, 1997 and 1998 were taken over by Honours Student Loans due to some being sold off. I have searched their site and literature and admit I may have missed it, but can any of the members tell me if they follow the same ruling as SLC? That is when I reach 50 in December my loans will be wiped clean? Also I'm also confused to whether its loans upto and including 1998 that are covered in his ruling or will this loan have to run to full term?

I'm sure I remember reading somewhere that the agreement they made when they sold the loans was that the terms would not change. So it should be fine.

frembrit

I'm still confused.
I was a mature student and had two years worth of Student Loans (over £8K in total) in 2001/02 and 2002/03. I started to 'pay off' the loan in October 2004. I understand the the interest rate is now low but every year my total repayments were less than the interest charged, therefore my loan amount increased. I think over the last year I've managed to pay back more then the interest charged. without looking, I guess I've paid back about £600 of which most of it would be paying the interest back.
Basically, since graduating in 2003 and starting to pay back the loan in 2004, I owe more now than I did when I graduated...and it's not coming down very fast. So, I'm basically just paying off the interest. Right?

Now, I owe just short of £8500 and have £6000 in an ISA and I have no other debts. I was thinking about using the £6k to reduce the student loan to £2500 and then pay off £500 for the next 5 months, then the loan will be gone and I can start saving again.

What are your thoughts?

Chris2685

My thoughts are for you to save for yourself and ignore the loan regardless of whether it will be wiped out or not...

Oldernotwiser

frembrit wrote: »

Now, I owe just short of £8500 and have £6000 in an ISA and I have no other debts. I was thinking about using the £6k to reduce the student loan to £2500 and then pay off £500 for the next 5 months, then the loan will be gone and I can start saving again.

What are your thoughts?

But once you've used your savings for this you can't get them back whether you're made redundant, become ill, want to travel or whatever. However, in any of these circumstances your loan payments will stop. What on earth is the point of paying off your loan and losing your savings for nothing?

frembrit

Thanks for the replies.

Good point about the redundancy thing.
I'm looking at it from the point of view that I'm paying hundreds of pounds worth of money each year and only reducing the loan by a really small fraction. (initially not even covering the interest). Of course the interest is a lot lower now and I'll be making a little more of an impact.

tsb2225

Hi all

my loan is now due for payment but all the money is sat in my flexible mortgage account, reducing the balance and hence the interest due. At present both loans (student and mortgage) seem to be effectively base rate trackers at base rate plus 1% so they both cost/save the same amount. I'm overpaying on the mortgage by quite a bit and need to decide whether to pay the student loan back in one lump sum but keep the mortgage payments high, or reduce the mortgage payments and pay off the student loan over the next few years.

Any input would be welcome. Have I missed anything in trying to make this decision?

cheers for your thoughts

Fire_Fox

Flexible mortgage account is flexible, i.e. you can withdraw the overpayments if you have a car accident or fall pregnant unexpectedly. Student loans are not flexible, once you have overpaid you can't get that money back.

tsb2225

Thanks Fire Fox, that's a very good point that I'd missed.

suhow

I took out a student loan in 1993/94 and although I have paid some back I still owe about £2000. I am at the moment out of work and I am 50 years old. Is there a time limit for when student loans have to be paid back and also, is there a time scale when theyare wiped out and you don't have to repay them?

Mixolydian

Great topic fellas. Very useful.

I have a question for you:

I'm a music student and I'm finishing my degree this year.
Ok, the thing is, as a session, live musician, and private teacher, I don't get formal or legal paperworks or payslips, so how do I show to the student loan company what's my wage? Also, I don't have a NIN, never needed one. It seems like there's a big loophole about the musician activities in the system. I don't know how I'm going to pay the thing off.

any ideas?

cheers