Should I Pay My Student Loan Back?

My_World

Back in 2002 I was at school doing my Highers. I applied to go to college to do an HNC which I received a conditional offer on. I applied for student loan etc. However I didn't get my Highers :mad: so I couldn't do the course and did an NC instead. I thought that as I wasn't doing the course I wouldn't get the loan? But I was paid the loan, I phoned student loans and was advised I could pay it back then or keep it. Being completely selfish and irresponsible I kept it!

Next year I'm planning on going to uni (if I can pass my highers the 2nd time round!!) and was wondering if this previously loan would cause any problems getting further funding? (the course is 4 years long) Would it make any difference if I pay it back before I start the new course?

Hope all this makes sense.

Thank you xI

Demise

It would be a irresponsible decision to put off your student loans longer then you have to. As a rule of thumb you should find out how much you will be paying for waiting to pay, what the percentage rates are, and at what time you must pay back before getting penalties.
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Oldernotwiser

As HE funding is normally for only 4 years it sounds as if you're going to have problems with doing a 4 year course having already had funding. Was it just for the first term?

My_World

Hi thanks for your replies.

I have started paying back the loan at around £20 a month (varies depening on wages which are different every month.) I plan to continue with this however I would pay extra each month into a higher rate savings account then pay it off if necessary. At the moment the outstanding balance is roughly £1945.35 which I am paying 3.8% interest on.

I took out the full loan in 2002. As I am a student at the moment (doing my Highers, which I get a bursary for from college, so don't need to worry about loans until next year!) money is tight as it is. However I would rather pay this loan back now if it means getting funding for the next 4 years? Would it work that way or is it 4 years then regardless of whether you've paid it back or not thats it?

xLx

Oldernotwiser

So, did you take all three installments of the loan although you weren't really eligible? If this earlier loan is going to be a problem, could you not just do a normal 3 year degree or does it have to be 4 years for some reason? It's the combination of a 4 year degree and a previous loan that's the problem.

Idiophreak

Demise wrote: »

It would be a irresponsible decision to put off your student loans longer then you have to. As a rule of thumb you should find out how much you will be paying for waiting to pay, what the percentage rates are, and at what time you must pay back before getting penalties.

Actually, general advice is quite the opposite of this - don't pay back the loan until you have to.

There are no penalties on student loans and they are more or less at the rate of inflation (from the previous year...), so they cost you no more the longer you take to pay them off...the money's better paid into high interest savings in the meantime (although preferably not in Iceland ).

Back to the OP, though...as others have suggested, I think you get four years' funding through the student loan in most cases...but if you can afford to repay the loan, why not just save that money instead, then use the savings (plus interest) in place of the student loan for year 4?

My_World

Oh my goodness Idiophreak I didn't even think of that :rotfl: think that's what I'll do! My friend told me it was 5 years of study but obviously not! I want to do social work and unfortunately it is 4 years!! I'll def set a standing order to my savings account and stick the money in there!

Thanks for all your help everyone xxx

Oldernotwiser

My_World wrote: »

Oh my goodness Idiophreak I didn't even think of that :rotfl: think that's what I'll do! My friend told me it was 5 years of study but obviously not! I want to do social work and unfortunately it is 4 years!! I'll def set a standing order to my savings account and stick the money in there!

Thanks for all your help everyone xxx

A Social Work degree in England is 3 years. Wouldn't that solve your problem?