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

argood

fluffywoo wrote: »

Hi there

I have a student load of around £6000 and I having been living abroad for over 3 years. I informed the SLC 3 years ago that i would be moving abroad to live with a partner, after which i have not moved back. I started work 2 years ago but had not been working for a year before that. Anyway, to cut a long story short, i haven't paid back any of the loan during my 3 years out here (although have made contributions before i moved out) and wondered if i should start paying it back? However, i have been told that if you are out of the country for more than 3 years you don't need to pay it back. Is this true?.

Thanks FW

You should be keeping the SLC up to date with any developments regarding your income. So although you informed them you were moving abroad you didn't tell them when you started working.

Countries are banded with different thresholds so you can check to see whether you should be repaying by comparing the threshold to your earnings. The thresholds are here: http://www.slc.co.uk/thresholds/

Lastly the three years write-off isn't the case. If you're earning over the threshold then you have to start repaying.

Chris2685

If you haven't earnt enough to pay back, that is surely why you haven't heard anything? Although I'm surprised they haven't sent you an annual statement.

marks77

I'm suprised too, but also, I've never deferred repayments with the SLC through the normal channels.

Numenor

If I were you mate, I'd look to contact them as soon as you can, explain that you've never received a statement, deferral form or any other correspondence from them, and that you want to try and get the issue resolved. Might be worth making an initial phone call and following it up with a letter, sent recorded.

emmafitzpatrick

Hi I have a post 1998 loan and I got my annual statement the other day and the interest was more than the amount i had paid off for the year direcly from my salary
Surely this is wrong as the goverment sets the repayment schedule/terms.

The only way to get it sorted is to pay extra which i don't have

Can anyone help?

many thanks emma

argood

emmafitzpatrick wrote: »

Hi I have a post 1998 loan and I got my annual statement the other day and the interest was more than the amount i had paid off for the year direcly from my salary
Surely this is wrong as the goverment sets the repayment schedule/terms.

The only way to get it sorted is to pay extra which i don't have

Can anyone help?

many thanks emma

Hi Emma,

No this isn't wrong. You've been accruing more interest than you've been repaying.
Repayments are calculated at 9% of earnings above £15,000. The interest has varied quite a bit recently but it's been going down. Until September last year the rate was 4.8% and it's gone down from there to 1.5%

The best way to look at it is that from September 1st 2009 the rate will be 0% for a year so any repayments you make will properly reduce your balance.

janeseemore

Hi everyone,

well I was just about planning on paying around £150 a month to start reducing my student loan repayment, I have managed to find a part time job, even though its under the £15000 limit and does not pay a great deal, I was thinking of clearing my loan asap, seing as intrest is going down to 0% in September until Aug 2010!

But having read Martins article and some of the posts on this topic, I think it may be better not to pay the £150 a month? But rather pay £150 directly into my ISA, where I will gain some intrest (even though small intrest), but its better then nothing right?

So have I got this right?

In addition I attended uni from September 2004 to June 2008, So I guess the whole thing about the loan clearing after 25 years does not apply to me? I was confused as I was not sure if you take into concideration that the loan was taken out after 2006 too.

But so coming back to the whole thing about starting to repay the loan, I just want some feedback to see if I have got the whole thing right, and its what I should be doing?

atypical

janeseemore wrote: »

In addition I attended uni from September 2004 to June 2008, So I guess the whole thing about the loan clearing after 25 years does not apply to me? I was confused as I was not sure if you take into concideration that the loan was taken out after 2006 too.

Your loan won't be written off after 25 years as the only date that matters is the date you received your first loan. As this for you was in 2004 your loan won't be written off until you turn 65. More info here.

You are right in saying that it is better not to repay the loan, save the money instead. Remember that you can't get overpayments back from the Student Loans Company. The fact that the interest rate will be 0% from September is more reason not to repay the loan! As long as you ensure your repayments are in an account paying more than the student loan interest rate it is always better to not repay.

Lokolo

janeseemore wrote: »

Hi everyone,

well I was just about planning on paying around £150 a month to start reducing my student loan repayment, I have managed to find a part time job, even though its under the £15000 limit and does not pay a great deal, I was thinking of clearing my loan asap, seing as intrest is going down to 0% in September until Aug 2010!

But having read Martins article and some of the posts on this topic, I think it may be better not to pay the £150 a month? But rather pay £150 directly into my ISA, where I will gain some intrest (even though small intrest), but its better then nothing right?

So have I got this right?

In addition I attended uni from September 2004 to June 2008, So I guess the whole thing about the loan clearing after 25 years does not apply to me? I was confused as I was not sure if you take into concideration that the loan was taken out after 2006 too.

But so coming back to the whole thing about starting to repay the loan, I just want some feedback to see if I have got the whole thing right, and its what I should be doing?

Please see this:

http://forums.moneysavingexpert.com/showpost.html?p=14617685&postcount=3

May give a better explanation.

janeseemore

I am so happy I have come across this site! Putting the money into the ISA is more wiser option.

Thank you so much for your replies!