Student Loan Interest Rate. Is Govt Delay over decision a “how much will it cost”?'

Former_MSE_Lawrence

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's 'Student Loan Interest Rate. Is Govt Delay over decision a “how much will it cost”?' Blog.

Click reply to discuss below.

Lokolo

I am quite happy to keep it at 0% if need be. RPI index linked savings won't go negative if RPI does.

beer_tins

Both my wife and I finally paid off our student loans in the last 3 months. Talk about bad timing!

neas

There'd be hell on if they don't match RPI.

The whole point of the student loans were they were 'non-interest' based loans... rising (and perhaps falling) at the rate that RPI rose/fell..... in affect staying the same general amount year to year.

If they were to cancel this then we'd actually start charged interest for them... meaning all 9 years worth of student being fobbed off by the government when it suits then.

RPI will peak and trough over the typical 10-25 year period we repay them. So why in hell should I pay more during the 'bad times' (high inflation, high peak) and get conned during the 'good times' (negative inflation, low trough).

The policy states its RPI or interest of major banks (whichever is less)...It should stick direct to policy... otherwise students will be disadvantaged. Students already got a hard time repaying back the 25k+ loans they get on their piddly 16-20k... annual salaries already.... this would be a kick in the nether region for sure.

molemag

I have been saying for ages that it would be a terrific boost to the Oppostion parties if they were to announce that as soon as they get into power the loans would become interest free. At least it would seem that they are contributing something, and the amount to repaid would be fixed.

As things are, if you don't earn much, your debt just grows and grows and grows...

canardo

knowledge based economy yet we make it more and more difficult for the average person to attain a world class education...

ashapala

Could they actually just change the rules like this? (Was there no contract?)

bobothebear

I think most of us would happily accept 0% which looks quite possible as worst case.
I've been paying mine back for the past 7 years and reckon I've got about another 5 years to go at the current rate of paying it back.

PinkPig

bobothebear wrote: »

I think most of us would happily accept 0% which looks quite possible as worst case.

Maybe some people would, but they certainly shouldn't be happy with that. We paid 4.8% when inflation was high - a bit of deflation means that that is now being reversed and we shouldn't have to put up with 0% if inflation is negative. I recently took a look at the booklet explaining my student loan which I was given years ago when I took it, and it very specifically says that the amount you pay back will never increase in real terms. If the interest rate is zero and the RPI is negative then that's not true any more.

keet83

well i hope it sticks to the rules i signed up to and increases when it should increase and shrinks when it should shrink. if it changes the rules of that, surely they'd only be able to include student loans from 2009 onwards; if not then there would be a huge uproar about this from many ex-students paying back their so called no interest loan.
last year my loan went up by 4.8% so the shrinking should equal it out a bit.
i know it says in the t&c that i quote: 'although student loans are contracts which can be enforced by the civil courts, they are not profit making loans.' i dont know if that would make any difference, but surely if the interest rate has been decreasing and the RPI has been decreasing then they would technically be making a profit if they didn't reduce your loan.

cattarn

Those of us with pre-1998 loans have been paying much more interest than those with post-1998 ones over the last year, even if there was negative interest the government have made the money to cover it for a while from the higher interest rates. We all have a contract - if we decided to change the way we paid the powers that be would have something to say about it. We may have to unite and fight for what is rightfully ours though - I can't see the government willingly reducing our loans.