RPI down to -0.4% - Negative Interest On Student Loan?

Lokolo

Meh they've got til September.

whitfreak

FireFox, while I agree with your point. You must remember that the loans were sold to students as having no real interest rate. So to break the link with RPI would be a case of mis-selling. Well unless they have change the measure of inflation to CPI instead, but I don't think the terms and conditions allow that.

The gap between RPI and CPI (-0.4% vs 2.9%) shows that inflation is like all statistics, hard to measure accurately.

One question, statistics like inflation, growth etc get revised at later dates as more information is collected, so is this annoucement for March's RPI the one they use? (If so why do they wait until September to apply it?)

Fire_Fox

If we are intelligent enough to go to university, we are intelligent enough to know there is no such thing as a free lunch. We have had the best of two worlds recently - a rate based on inflation which reduced to track the Bank of England base rate.

You can get technical about the wording on the website, no system is perfect or completely fair but I believe students have got it pretty good. Many of you will have never tried to live independently on minimum wage or on Jobseekers Allowance.

I assume 'they' wait until September to give students fair warning of the increase/ decrease in 'interest' rate and themselves time to implement any changes. The rate is set for a whole year irrespective of when it starts, so no opportunity for trickery. Eighteen months from now we will have a stable debt whatever craziness is happening with the price of food or interest rates - there's every chance students will be very grateful for that lag.

naclo1

There's an article on the BBC news website about this under the title, Graduates may get interest rebate

rb10

naclo1 wrote: »

There's an article on the BBC news website about this under the title, Graduates may get interest rebate

http://news.bbc.co.uk/1/hi/business/8010774.stm

Poolie

Firefox,

The reason for the rate being held till September is that the new academic year is the 1st September.

This is the problem with Student Loans and repayments. The repayments are based on the tax system (April till March) while Student Loans run based on the academic year (September till August). This is why you don't have to start repaying your loan till either the April after you graduate or if you are class as leaving your course.

*ditz*

I honestly doubt they'll do it, but I very much think they should.

The point about borrowing money from taxpayers is all very admirable, but the banks are borrowing money from taxpayers, do you honestly think that they are going to sign up to pay more interest than they have to?

And those people who have their student loans written off, where does that money come from?

Perhaps I'm a cynic and a grump, but I pay tax. The government gets its payback from people's degrees when they go into jobs which they could not have held without that level of education. They do not need to tax us on student loans as well.

If the rate next year is anything but -0.4% then it's not interest, it's tax!

*ditz*

Fire_Fox wrote: »

I would personally be very happy with a 0% loan.

I admire your optimism, but I very much doubt that they'll make it 0% either! I very much hope they do make it either -0.4% or 0%, but I really don't think they will!

Fire_Fox

Me me me me me: it's all about me. :rolleyes: