Help With Student Loans - HERE!

MoneySavingAdventure

Hello,
I am on a 1998 mortgage type loans taken out in sept1997, sept1998, sept1999, I had a few questions if you are possibly able to help?

1) I am self employed and do not earn above the 32,000 current threshold. But I wanted to know does this gross profit income include expenses incurred by my work. i.e. I earn 33,000 before tax but my expenses are £7000 per year and these expenses are submitted in my tax return. Is my gross income counted as 33,000 or 26,000 after expenses? 

2) If I was to start paying my student loans next year, would it still be written off in 2022 (25 yrs after the first loan was taken out) i.e. would I only have to pay for 2 years?   

3) If I can continue to defer, would my loans be written off in 2022 (25 yrs after the first loan was taken out)?

4) Are the three loans written off as each reaches 25 years i.e 2022, 2023, 2024?

Thank you and your help is really appreciated!

[Deleted User]

MoneySavingAdventure said:

Hello,
I am on a 1989 mortgage type loan taken out in sept1997, I had three questions if you are possibly able to help?
1) I am self employed and do not earn above the 32,000 current threshold. But I wanted to know does this gross profit income include expenses incurred by my work. i.e. I earn 33,000 before tax but my expenses are £7000 per year and these expenses are submitted in my tax return. Is my gross income counted as 33,000 or 26,000 after expenses? 

2) If I was to start paying my student loans next year, would it still be written off in 2022 (25 yrs after the first loan was taken out) i.e. would I only have to pay for 2 years?   

3) If I can continue to defer, would my loans be written off in 2022 (25 yrs after the first loan was taken out)?

Thank you and your help is really appreciated!

1, the simple answer is expenses aren't counted when calculating your income.

2/3, the write off criteria you're referring to is relative to the last agreement, not the first as you indicate. Assuming your first loan was taken 1997, and you stayed on the same 3 year course without any breaks, your 25th anniversary would be 2024 - not 2022. But if you were under 40 years of age when you last borrowed, your loan will be written off after your 50th birthday regardless of whether you begin repaying or continue to defer*.

If you turn 50 or the 25th anniversary occurs during a deferment period, the deferment period will run to its conclusion before it is written off.

Hope this answers your questions.

Disclaimer: not an expert

MoneySavingAdventure

thank you! 
You say 'But if you were under 40 years of age when you last borrowed, your loan will be written off after your 50th birthday regardless of whether you begin repaying or continue to defer' is this true of the 25 year rule too? i.e. if I started to repay next year would it still be written off in 2024 even if I have not completed payment?

Just to confirm on the expenses thing. So they would view my income as the 26,000 after expenses, not the 33,000?

[Deleted User]

MoneySavingAdventure said:

thank you! 
You say 'But if you were under 40 years of age when you last borrowed, your loan will be written off after your 50th birthday regardless of whether you begin repaying or continue to defer' is this true of the 25 year rule too? i.e. if I started to repay next year would it still be written off in 2024 even if I have not completed payment?

Just to confirm on the expenses thing. So they would view my income as the 26,000 after expenses, not the 33,000?

Yes, basically. The example below might better clarify the situation.

Your loan balance is £5,000.00 which has always been and is currently deferred until March 2021. The 25th anniversary of your last loan agreement is May 2021 (or your 50th birthday, doesn't matter which in this scenario). You make your repayment as scheduled for March and April 2021 (poss. May 2021). You've made 2 or 3 repayments of, say £150 per month, after May 2021 the remaining balance is cancelled in its entirety.

Really the only way this isn't the conclusion of your borrowing, is if you breach the conditions of contract, i.e. make false claims on a deferment application or go don't keep up with your repayments as they fall due. If you fall into arrears you will be expected to satisfy your obligations before the lender considers your debt cancelled.

Yes. Your total income (from all sources) is £35,000 but you have expenses of £15,000, then your income is essentially £20,000.

Disclaimer: not an expert

jessicasteeleeee

Hello, 
I am looking for some advice regarding my student loan. I have recently finished a three year degree in Northern Ireland and currently have 21k of student debt which is Plan 1 and I am now moving to Leeds to do a PGCE secondary teacher training degree. I am going to be receiving a 26k bursary and I am debating whether or not to take the 9k fees out as a loan including the maintenance loan or whether to not take any loans and self finance my 9k fees out of my 26k bursary to reduce my student debt. 

I know Martin Lewis says take all you are given as you will never pay it all back and not to pay off large chunks of it yourself but he is speaking about English and Welsh students with 50k+ of debt. I will have both a Plan 1 student debt of 21k plus a Plan 2 student debt of 12k so a total of 33k. I would love to be able to use my full 26k bursary to live off next year but also save for a house deposit and a year of travelling. Can anyone advise me on whether I am better to take the 9k fee loan out and maintenance loan of approx 3k (N.I) with the expectation that I will never pay my full loan back and therefore paying 9k out of my bursary could be throwing away money or am I better to not take out the extra debt, pay it out of my bursary and not have the extra savings incase I do repay my full student debt and the interest. I am finding the mixture of a Northern Irish and English student loan very confusing as I do not know how to work out if I will repay my full student loan or not given that the calculator is only for Plan 2. I expect to earn on average 24-34k salary throughout my life.

Additionally, would anyone be able to tell me when the 25 years (Plan 1) or 30 years (Plan 2) until your loan is wiped begins? Does it begin from the April after you graduate or once you start earning above the threshold. For example, it is currently the year I should start repaying my undergraduate loan but I am not earning enough, if I do my PGCE next year and then go travelling will I only have to repay my student loan for 23 years instead of 25? Or would the 25 years only begin when I start earning above the threshold. 

Sorry for the long query, I hope someone can help

Jessica 

[Deleted User]

jessicasteeleeee said:

Hello, 
I am looking for some advice regarding my student loan. I have recently finished a three year degree in Northern Ireland and currently have 21k of student debt which is Plan 1 and I am now moving to Leeds to do a PGCE secondary teacher training degree. I am going to be receiving a 26k bursary and I am debating whether or not to take the 9k fees out as a loan including the maintenance loan or whether to not take any loans and self finance my 9k fees out of my 26k bursary to reduce my student debt. 

I know Martin Lewis says take all you are given as you will never pay it all back and not to pay off large chunks of it yourself but he is speaking about English and Welsh students with 50k+ of debt. I will have both a Plan 1 student debt of 21k plus a Plan 2 student debt of 12k so a total of 33k. I would love to be able to use my full 26k bursary to live off next year but also save for a house deposit and a year of travelling. Can anyone advise me on whether I am better to take the 9k fee loan out and maintenance loan of approx 3k (N.I) with the expectation that I will never pay my full loan back and therefore paying 9k out of my bursary could be throwing away money or am I better to not take out the extra debt, pay it out of my bursary and not have the extra savings incase I do repay my full student debt and the interest. I am finding the mixture of a Northern Irish and English student loan very confusing as I do not know how to work out if I will repay my full student loan or not given that the calculator is only for Plan 2. I expect to earn on average 24-34k salary throughout my life.

Additionally, would anyone be able to tell me when the 25 years (Plan 1) or 30 years (Plan 2) until your loan is wiped begins? Does it begin from the April after you graduate or once you start earning above the threshold. For example, it is currently the year I should start repaying my undergraduate loan but I am not earning enough, if I do my PGCE next year and then go travelling will I only have to repay my student loan for 23 years instead of 25? Or would the 25 years only begin when I start earning above the threshold. 

Sorry for the long query, I hope someone can help

Jessica 

Quite the query there, forgive me if I miss anything.

I appreciate you'll be studying in England for yout PGCE, but based on what you've said, you should still be applying to Student Finance NI for your funding.

Because you are studying in England a Tuition Fee Loan of £9k should be available to you along with the usual funding, but the good news is that all of your loans will be Plan 1 from SFNI.

I am not going to tell you whether or not it is a good idea to take all funding that's available to you, but I would advise that Martin Lewis has never, and would never advise that you'll never pay your whole loan back as that would not be accurate nor would it be responsible.

You can't, unfortunately, accurately project whether your loan will be repaid as there are varying unknown factors that could impact whether or not that is the conclusion. However, you should be rested knowing that if you continue to satisfy the terms and conditions of the loans, and there is still a remaining loan balance by the time your qualify for loan cancellation, whatever that balance is will be cancelled in its entirety.

In terms of your 25th anniversary it is from the date your loans enter repayment. E.g. you finish your studies in summer 2014, your loans enter repayment 6 Apr 2015; the 25th anniversary falls on 6 Apr 2040. The same is true of your PGCE, the 25th anniversary will be 6 Apr 20** based on your latest loans entering repayment the April after your course ends.

Disclaimer: not an expert

jessicasteeleeee

Wow thank you so much for that! I really appreciate your reply. 

I just have a few follow up questions. 

1) I know to apply with student finance N.I but I was not aware that this means my PGCE loan will be Plan 1 also, I assumed it would be Plan 2. Does this mean the PGCE loan will also be written off 25 years from the April after I graduate or will it be 30 years? Also will I repay the PGCE loan at 9% above the English threshold of 26k or the plan 1 19k? The difference between plan 1 and plan 2 monthly payments on same salary is so big  

2) I feel like I am in a tricky situation as 33k total loan is maybe not big enough as the English ones that are usually never repaid. I do not need to take out the extra loan, I could just take the 9k fees off my 26k bursary and stick with the 21k loan but obviously I would have loved to make those extra savings. I know you can not tell me what to do but could you even tell me what you would do in my situation for best financial outcome?  

[Deleted User]

jessicasteeleeee said:

Wow thank you so much for that! I really appreciate your reply. 

I just have a few follow up questions. 

1) I know to apply with student finance N.I but I was not aware that this means my PGCE loan will be Plan 1 also, I assumed it would be Plan 2. Does this mean the PGCE loan will also be written off 25 years from the April after I graduate or will it be 30 years? Also will I repay the PGCE loan at 9% above the English threshold of 26k or the plan 1 19k? The difference between plan 1 and plan 2 monthly payments on same salary is so big  

2) I feel like I am in a tricky situation as 33k total loan is maybe not big enough as the English ones that are usually never repaid. I do not need to take out the extra loan, I could just take the 9k fees off my 26k bursary and stick with the 21k loan but obviously I would have loved to make those extra savings. I know you can not tell me what to do but could you even tell me what you would do in my situation for best financial outcome?  

You're welcome.

1, all of your loans will be cancelled (subject to satisfying T&Cs) after 25 years of being in repayment**

** "in repayment" is in reference to the repayment status of your loan, NOT contingent on you making repayments (of course you only repay what is due when it is due).

Your repayments will be calculated at 9% of your salary above the appropriate salary and then allocated to your whole loan balance (if each loan is in repayment).

2, Personally, if I was faced with this situation I would take every penny I am eligible to receive. Bursary, Loans and Grants. Even if you do not 'need' the money, there are options such as depositing the loans in a high interest ISA or (more risky) investing in stocks if you're that way inclined. The return on most options will likely outweigh the interest you'll be charged on your Plan 1 loans which, especially right now, is very low in comparison to commercial lenders.

Disclaimer: not an expert

jessicasteeleeee

You’re the first person who has actually helped me today! Been on the phone literally all day with no answers. Thank you for all your help!

Ciamalza271

Does anyone know if student finance take into account child maintenance? On paper our household income is good but my husband pays over £600 a month (£7500 a year) in CSA and there is no information to say if this is taken into account? Also we have two other children who will be living at home with us.... does this make any difference to the amount of loan? Obviously I want to support my son as much as possible but not sure we can find all of it!!