Student Loan Interest Rate Discussion

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Comments

  • bumpoowee
    bumpoowee Posts: 589 Forumite
    It is disgusting that they are setting an above-inflation rate of interest on student loans next year. It's only going to cost me £25, however it is the principle that matters - these loans were sold on a inflation-matching promise and again the scum in government have lied to us and again shafted the under-30s. We paid the excessive 4.8% raise last year so there is not justification whatsoever for overcharging us next year.
  • Sol00
    Sol00 Posts: 1,230 Forumite
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    Hi James, I've signed the petition although I'm not sure if it will help the cause as it's not dealing with the current issue - that the September rate is not going to be negative. The current petition seems to be talking about the interest rate in general.
  • Masomnia
    Masomnia Posts: 19,506 Forumite
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    I agree generally with the principle. But my savings are earning 6.3%, so I can't in good conscience complain about 0% borrowings while people are losing jobs. Sorry.
    “I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse
  • Mini_Bear
    Mini_Bear Posts: 604 Forumite
    I think its terribel the woman from the SLC said they wud struggle to justify to tax payers paying out minus interest rates on graduate loans. I would much rather my hard earned tax be used in the manor than to subsidise MPs pool cleaning costs and second home refurbishments! The govt has its principles all wrong.
  • birduk
    birduk Posts: 466 Forumite
    Am I the only one that thinks that the 0% isn't such a terrible thing? Interest rates have already reduced on post-98 loans, when according to the principles of the system that we are all moaning about, they shouldn't have been. Post-98 still be paying 3.8%, not this lower figure of 'mixed basket of interest rates plus 1%' that has been paid for the last 6 months or so? You didn't hear people complaining all about the principle then?

    I would have thought that the last 6 months of reduced interest makes up for 0.4% difference in interest now? It seems to balance out to me?

    I suppose the fairest way is to take an average of the previous years RPI, not just March's figure, whether that is up or down. But we all signed up to the agreement when we got our loans.

    It seems to me that there are more things that students should be shouting about like fees, the inequalities in the English and Scottish system, top-ups, cost of university accomodation etc.
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    First Post First Anniversary
    The only thing I am worried about is if infation rockets the year after. If it ends up 4-5% in the year after then that -0.4% would have helped greatly.....
  • BruceyBonus
    BruceyBonus Posts: 1,142 Forumite
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    Lokolo wrote: »
    The only thing I am worried about is if infation rockets the year after. If it ends up 4-5% in the year after then that -0.4% would have helped greatly.....
    Following on from your point, there is also an argument that if the government puts a minimum interest rate of 0% on the loan, then there should also be a maximum interest rate that they can charge us.
  • birduk
    birduk Posts: 466 Forumite
    Following on from your point, there is also an argument that if the government puts a minimum interest rate of 0% on the loan, then there should also be a maximum interest rate that they can charge us.

    There is, it is this 'mixed basket of bank interest rates plus 1%'.
  • BruceyBonus
    BruceyBonus Posts: 1,142 Forumite
    First Post First Anniversary Combo Breaker
    birduk wrote: »
    There is, it is this 'mixed basket of bank interest rates plus 1%'.
    Altoiugh that assumes the bank rate doesn't increase too :D

    Is there anything in statute that states about the bank rate plus 1% or do the government just make it up as they go along? I can't find anything relating to this regulation.
  • birduk
    birduk Posts: 466 Forumite
    It's on the student loans website:

    Interest
    From 6 March 2009, the interest rate on Income Based Loans is 1.5%.

    Student loans are not like commercial loans. They are subsidised by Government and attract a low cost interest rate. This interest rate is based on the annual March retail price index (RPI) or the highest base rate of a number of major banks plus 1%; whichever is lower.

    Until recently, the RPI has always been the lower of the two. However, the reduced bank base rate plus 1% is now lower than the March 2008 RPI so we have adjusted the Income Based Loan interest accordingly.

    <li class="MsoNormal" style="margin: 0cm 0cm 0pt;">The interest rate from 6 February 2009 to 5 March 2009 was 2%. <li class="MsoNormal" style="margin: 0cm 0cm 0pt;">The interest rate from 9 January 2009 to 5 February 2009 was 2.5%, <li class="MsoNormal" style="margin: 0cm 0cm 0pt;">The interest rate from 4 December 2008 to 8 January 2009 was 3%, <li class="MsoNormal" style="margin: 0cm 0cm 0pt;">The interest rate from 1 September 2008 to 4 December 2008 was 3.8%,

    So from March to September post-98 gets 1.5%, instead of the 3.8% for pre-98. I think that is worth 0.4% over an entire year don't you?
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