Student Loan worry

zar

w8ey wrote:

Something I am quite worried about:

I have nearly paid off my student loan, but my wife hasn't started paying hers off yet and probably never will as:

a) She earns 12k
b) We are planning to have children soon

The worry I have is that, as we are married, does that mean that I am now liable for her repayments (I earn quite a bit more than the 15k payment threshold) if she isn't paying it off herself? Her student debts are huge and i'm not sure I could afford to start paying it off... But then judging by all this talk about Conservative policies, can I afford not to pay it off either?!?

She finished her 3 year degree in 2003.

Don't worry the good thing about a student loan is that the responsibility can't be transferred to another person, and I don't think even the tories are proposing to change that. Keep your money for the two of you (and any extra family members that may come along!)

gems_4

I've probably got about £10K of student loans, just started my first 'proper' job, think my interest is about 30 quid a month and in the next few months I should be starting to make some payments back. I was thinking about making additional contributions to get rid of it (I don't really like having lots of debt) but then after reading this thread, should I just save it and put it in an ISA or something and just make the minimum payments?

robotmum

I left uni way back in 1995 and haven't paid a penny off my student loan yet. Is that a record?! Sadly that means I haven't earned enough yet - having kids and now working part time means I probably won't either so hanging in there for the 25 year rule! I'm not proud of my debt but I've got other debts now, like a mortage which take higher priority. Qualified as a teacher in 2004 so am eligible for the repayment of teachers loan scheme which has (I believe) now been scrapped. However they have rejected my application as they say the form was received after the deadline - I know this is not true so I am disputing it. I think the SLC/government is just trying to wriggle out of it. I have heard that this scheme is quite notoriously difficult. Wonder if anyone else had similar difficulties as I am preparing myself for battle with the SLC!!

zar

gems wrote:

I've probably got about £10K of student loans, just started my first 'proper' job, think my interest is about 30 quid a month and in the next few months I should be starting to make some payments back. I was thinking about making additional contributions to get rid of it (I don't really like having lots of debt) but then after reading this thread, should I just save it and put it in an ISA or something and just make the minimum payments?

Absolutely. If it makes you feel better then track your money. I use microsoft money but before I got that I would just put a value from the 1st of the month (or other convenient date) into excel. You can estimate your student loan balance by adding the £30 interest on each month, then when the SLC send you a statement you can go back and correct any over or under estimates.

e.g. If you have very simple finances you would have 3 columns, your current account, your ISA savings account* and your student loan. Then have 2 totals - your day-to-day balance which is the current account plus the savings account, and your overall balance which the total of all 3 accounts. Try not to feel too depressed that this is so negative!

Then you can aim to "pay off" your student loan in a certain period of time or set up a direct debit of the same amount per month as you would have put in overpayments on your student loan. This way in a few years you will have a net worth that is positive so although you will technically still have the student debt you will know that you could pay it off today if you weren't earning the extra interest on the balance! The other advantage of this is that its more flexible so if you need the money in the future then you can access it e.g. Use the £10k you have saved as a house deposit and then start saving it up again.

*which must have an interest rate of over 3.2% so that the interest your are earning on the money is greater than that of paying off some of the student loan.

QBD

Very depressing reading some of you!

I found a degree more of a personal achievement then perhaps a marketable asset. I mean in my case and most of other friends just went to uni for the social life/intellectual challenge and not to work.. overall I think even with loans it is a good deal and is something that cannot ever be taken away from you. The fact that so many will be put off from uni due to the high costs also means that a good degree should increase in value in time to come.

jitsuguy

I personally don't worry about the student loan - two main reasons:

(1). It doesn't count against you in credit checks, so as far as the banks are concerned it doesn't exist.

(2). It will come out of your earnings automatically (if you're paid using the PAYE system), and if you haven't paid it off by 65 it is written off!