Student Loan Interest Rate Discussion

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  • Does this apply to Scotland Student Loans through SAAS?
  • Sol00
    Sol00 Posts: 1,230 Forumite
    First Post First Anniversary Combo Breaker
    Yes, you apply through SAAS but the money is paid and collected by SLC.
  • ler01kjh
    ler01kjh Posts: 164 Forumite
    edited 22 April 2009 at 6:38PM
    Thanks for your support Martin. I hope a campaign won't be necessary, although I'd be surprised SLs would strink, but just go to 0%.
    I also sent a FOI request yesterday although there will no doubt be an announcement sooner: http://www.whatdotheyknow.com/request/student_loan_interest_rates
  • Martini
    Martini Posts: 607 Forumite
    First Anniversary Combo Breaker
    MSE_Martin wrote: »
    I agree to an extent I think the only get out clause here is that for post-98 loans it will say "over the lifetime of the loan" it will match RPI and as its been lower this year than RPI it doesn't need to be negative next year. Yet i still think overall it will stick with the -0.4%

    Surely the easiest solution is for the Government to do what they said they would.
    If they shadow the RPI figure every year then no one can argue.
    Any loan will remain the same in "real terms" over many years to come which is what it's all about.
    Keep Smiling
    :) Site member number 24 :)
  • soco1
    soco1 Posts: 496 Forumite
    First Anniversary First Post
    I'm soon to receive the final instalment of this years loan which will give me a total of around £18K so bring on the deflation!
    I'm sure the government will find a way out of reducing loans even if it means changing statute to do it. Maybe they'll set a minimum cap at 0%.
  • harryhound
    harryhound Posts: 2,662 Forumite
    ler01kjh wrote: »
    Thanks for your support Martin. I hope a campaign won't be necessary, although I'd be surprised SLs would shrink, but just go to 0%.
    I also sent a FOI request yesterday although there will no doubt be an announcement sooner: http://www.whatdotheyknow.com/request/student_loan_interest_rates

    Very useful web site, you should give it more publicity alongside the "theyworkforyou" web site that gets publicity on MSE.

    I think this campaign is feeding former students with a false view of the economy.
    The government has artificially forced down interest rates and is now resorting to printing money. I'm not actually criticizing this short term action, as it is the least worse alternative.
    BUT inflation is "too much money chasing too few goods".
    It is looking like GDP (goods) output is likely to fall 10%; the value of the pound has already fallen about 30%. The major reasons why RPI is down is falling interest rates, with falling land/house prices, and "fire sale" destocking.
    In other words investment is falling, we are eating our seed corn and trying to pretend the good times are just around the corner.
    Letting the top quartile of society not pay back its loans gives completely the wrong message, in this competitive global economy.
  • I started University in Sept 1998 and i was wondering how the interest rates affect my student loan as all of the information talks about pre or post 1998 and i don't know in which bracket i fall.
    Also i am self employed and pay my student loan repayments in with my tax bill every year. Does this have any affect on my student loan?
    Thanks. X
  • whitfreak
    whitfreak Posts: 276 Forumite
    Graduates will still be repaying as per the T&C's, its just that interest rate should be negative now (well September). They could have avoided this trouble by including a collar but this goes against the tracking the real cost of the loan thing. Or they could have used CPI rather than RPI as CPI seems to be less likely to go negative due to what it includes. It is also the measure that the Bank of England uses for its targets.

    As you say inflation is too much money chasing too few goods, so with the whole printing money thing. unless the plan works perfectly, next year we'll be hit by a large increase in inflation and thus interest rates. At which point Students and graduates with loans will have to take it on the chin.

    If they move the goal posts as it were, then it just teachs students they can't trust the government when the going gets tough (if at all....). What happens when the government realises that many with the 25year loans will never pay them off fully will they move that post as well?
  • whitfreak
    whitfreak Posts: 276 Forumite
    Forster_barnes, are you repaying a "morgage style" loan i.e. over 84 (i think) instalments with deferal years if you don't earn enough. Or the new style 9% over 15k until you repay/die/retire?

    If its morgage style one then you should get the -0.4% interest rate as you havent a interest rate other than inflation. Eitherway until they annouce it there's nothing you can do.
  • harryhound
    harryhound Posts: 2,662 Forumite
    edited 23 April 2009 at 2:03PM
    whitfreak wrote: »
    Graduates will still be repaying as per the T&C's, its just that interest rate should be negative now (well September). They could have avoided this trouble by including a collar but this goes against the tracking the real cost of the loan thing. Or they could have used CPI rather than RPI as CPI seems to be less likely to go negative due to what it includes. It is also the measure that the Bank of England uses for its targets.

    As you say inflation is too much money chasing too few goods, so with the whole printing money thing. unless the plan works perfectly, next year we'll be hit by a large increase in inflation and thus interest rates. At which point Students and graduates with loans will have to take it on the chin.

    If they move the goal posts as it were, then it just teachs students they can't trust the government when the going gets tough (if at all....). What happens when the government realises that many with the 25year loans will never pay them off fully will they move that post as well?

    "a large increase in inflation and thus interest rates".

    I lived through the 1960's & 70's, perhaps I was then a similar age to the readers of this thread now. Interest rates were nowhere near keeping up with inflation. The government both Labour and Tory just kept printing money and allowed the country to go to the dogs. The value of the pound kept on falling, all sorts of gimmicks were tried to prevent wages and prices playing catch-up. Personally we were restricted to spending no more than 50 GBP on a foreign holiday (you had to get your passport stamped with your ration); I even had some idiot of a customs man reading the riot act about having 4 fivers in my wallet, as the limit was 15 quid for any traveller. Even then 15 quid would not have got you home if a diversion of a plane dumped you at some outlandish airport (like Luton or Birmingham:D ).

    However I did have an infinity mortgage as I always paid less than allowed it to be paid off in my life-time; while religiously saving at the same time. So that I could do what I wanted to do when the opportunities of life presented themselves.
    Britain's "terminal" decline as the sick man of Europe, stopped when the discovery of North Sea Oil suddenly boosted government taxes and turned round the balance of payment structural deficit.

    The government will try to repeat the trick of inflating away debts of its own and its citizens again, it will be interesting to see if it can get away with it this time in the era of free exchange and global communications.

    IF you are young, healthy flexible and have a skill set to offer than earns you a "luxury" western style salary; then I would not be too worried about the future cost of funding your loans, if they have been invested in things of lasting value.

    Give it a year or 3 and consider emigrating if the economy does not improve. I suggest the Pacific rim.

    Harry.

    PS "Then it just teaches students they can't trust the government" Cynicism is a lesson worth learning - politicians want power; they are not going to get the vote of the sheeple if they tell them the truth.
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