Student Loan Interest Rate Discussion

[Deleted User]

This is the applicable law for mortgage style (pre-1998) loans:

The Education (Student Loans) Regulations 1998
Paragraph 2, Section 1, Schedule 2:

The interest rate for the period between 1st September and the following 31st August will be the daily rate which results in an APR equal to the RPI rate. The lender will tell the borrower what the new rate is each year.

http://www.opsi.gov.uk/Acts/acts1990/ukpga_19900006_en_1

and

http://www.opsi.gov.uk/Acts/acts1990/ukpga_19900006_en_1

JP78_2

@foster_barnes, if you started in Sept 98, without deferment of a place offered in 97, then you will be on the post 98 loan. This is the one with the sliding scale of repayments based on earnings.

The "mortgage-style" one I have is the full amount plus (or even minus!) interest split into 60 monthly repayments (its only 84 if you have five or more loans, I had four).

I've just realised that even if the government do allow the loan value to decrease, a -0.4% interest over the year would only save me about £30 compared to 0%, so there's probably better things to worry about!

WelshGandalf

Thank you for your pledge of support Martin!

I think we will need this bit of loan deflation as I can see RPI at 5%+ come next April!

whitfreak

Harryhound, thanks for the insight to how it could be.

I should have been more specific as if inflation goes high then the loans interest rate will follow. Although the BoE rate will more than likely lag a bit behind bring in the whole +1% issue again.

harryhound

As a "thrusting young Turk(ess?)" of the knowledge economy, your wages are likely to go up at least as fast as inflation.
I remember a fun time in the 1970's when kids ( or anyone) could collect used confectionery wrappers and send them in to get money (or lots of more free stuff to rot their teeth) because the company was in serious trouble with the government for breaking the prices and incomes policy.

Similarly, as an IT (or was it DP in those days) person, I had to work on a personnel system (that is human resources to the IPOD generation) and there was a really muddled and illogical grading system. Naturally I recommended sorting it out.
"Good idea, it was only changed like that to confuse anyone querying the rapid number of "promotions" we had to have during the prices and incomes policy".

Best wishes,

Recycling executive bronze class (aka bin man)

Being serious for one moment, I have read this:
Loans shall bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that—

(a) the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and

(b) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms.

In real terms the government has devalued our currency by about 30%, so in real terms the there needs to be a massive increase in this tax on students?

It reminds me of dear old Harold Wilson, when "Sunny" Jim his chancellor refused to lie to parliament, and there was a frantic weekend as truck loads of money tried to escape UK. There followed a 15% devaluation the next week. "The pound in your pocket has not been devalued", (you are just no longer going to be allowed to take it abroad) I believe there were still foreign holidays available in Ireland, Channel Islands and the Bahamas (Princess Margaret had to go somewhere) In that tax haven one could change the GBP into gambling chips and then cash the chips (after a huge win;) ) for USD's - sorted.

ler01kjh

And a Parliamentary written question still provides no clarity!

http://www.theyworkforyou.com/wrans/?id=2009-04-24a.271029.h&s=student+loan

jamesjenkinsyates

I have set up a facebook campaign about this to try and get the government to make a decision.

But I can't post links on here as im new, so can an older user, PM me so they can post it?

rb10

jamesjenkinsyates wrote: »

I have set up a facebook campaign about this to try and get the government to make a decision.

I don't think a Facebook campaign is necessary, as the powers that be will be making a decision on it anyway in the near future. Who knows when, but it has to be before 1st September, from when the new rate will take hold.

Is the aim of your campaign really to encourage the Government/SLC to make a decision that they will be making soon anyway?

argood

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3866911&_dad=portal&_schema=PORTAL

rb10

argood wrote: »

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3866911&_dad=portal&_schema=PORTAL

Well done for spotting this, thank you!