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Student Loan Interest Rate. Is Govt Delay over decision a “how much will it cost”?'
in Martin's blogs & appearances & MoneySavingExpert in the news
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Former_MSE_Lawrence Former MSE
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.
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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.
As things are, if you don't earn much, your debt just grows and grows and grows...
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.
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.
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.