Help With Student Loans - HERE!

ljbnotts

Hi all, I'm really concerned about my student loan. I was at uni from 200 until 2004 and took out a loan for the whole time i was there. I graduated in 2004 and unfortunately haven't earned over the threshold so haven't paid anything back.

What happens now! Do I just not worry about it until I do earn over that or do i need to get in touch with them and fill out any forms etc. I've tried logging on to the student finance website but apparently my art id isn't recognized! Helpful! Don't think I'm ever going to pay the damn thing off as the interest is so high and I have no way of paying it of even if i wanted to!

Any thoughts? The whole thing is so confusing!

Impet_Limpet

try your art id with no spaces, thats why mine wasn't recognised.

The_One_Who

mayb wrote: »

My argument is against the whole concept of debt being acceptable state of affairs and in fact one encouraged by the policy of the government that students are encouraged to start their financial independence encumbered by a debt of any sort. There is also the matter of insurance sales, promotional offers on opening bank accounts with free overdrafts and all sorts of other 'benefits' offered to new students too. Was anyone advised against taking out a student loan and what were the alternatives offered if so?

It is a culture that encourages one and all to live to the level of debt they can accumulate rather than the level of income they have. The American way - as is paying for your university education. It is not patronising it is a fact that very intelligent people will still get into financial difficulties - ask our top bankers (mind you they can give themselves a nice bonus to see them over their mistakes and there is always the golden handshake to look forward too).

The government does not force you to take out a student loan, nor do they encourage you to have an overdraft. The bank is encouraging that, along with credit cards and all the rest. You do not need to take them!

If you do not want to take out a student loan then the other options are to get your parents to pay for you, or to work for a few years.

Higher education funding is generally quite generous, more so than here. Very few people pay the full tuition fee, and if they do then there are federal loans available as well as private loans.

leanne85

i urge anyone to think very carefully about taking out a student loan of your not absolutley sure you need it to survive.

i wasnt desperate for one, but i took one out for my final year (07/08) to help with bit and peices so i didnt have to work so much.

only today (24/11/08) have i received my first 'statement' and realised i have been paying £10 a month interest for over a year (since 08/09). this interest is only for one years worth of a standard maintenance loan (about £2370 that year) so assume that most people get the loan for 3 year, before you even look at working you will have had added on: £120 (12x£10) in the first year, £240 (12x£20) in the second year and £360 (12x£30) in the 3rd year. now if your interest is £30 (just a guess seeing as tho one years is about £10) and you are now in a job earning £1250 a month, you are only paying back £22 a month, meaning your loan will actually be going UP by £8 a month, not down.

i was horrified when i got this letter today, and immediatey took every penny out of my bank accounts overdraft (£1000) and paid that off in hope to reduce the interest abit.

so my advice is, dont get a lon unless you are truley desperate and can afford to pay it off big style. get a good bank account with an interest free overdraft instead and try and make do with that.

Lokolo

Leanne thats not a very good idea and not very sensible to what you have said.

Please see:

http://forums.moneysavingexpert.com/showpost.html?p=14617685&postcount=3

rb10

To follow on from Lokolo's link, even though 6% savings rates won't be around much longer, there's plenty of space to make profit on the loan. And next academic year, the loan rate is likely to be lower than 3.8%, so even with lower savings rates you should still always make a profit.

Oldernotwiser

Why does the fact that interest is added to the loan come as such a shock to so many students? Can none of you read?

Lokolo

Oldernotwiser wrote: »

Why does the fact that interest is added to the loan come as such a shock to so many students? Can none of you read?

No... don't be silly.

mayb_2

I think you are being disingenous OBNW. Everyone understands they will pay interest - what is not made clear is that it is added from day one of the loan so the amount has already increased before you begin to pay it off. This often does result in the loan increasing even when being paid off on a low wage, when work first commences after graduation.

Not everyone has rich parents or can work for many hours during their course - that very much depends on the course of study chosen some are more onerous than others, the timing of lectures etc. Working before going to university is an option for some, but you need to be over 24 before you are considered as a mature student and not be assessed for fees by your parents income.

Not everyone wants to wait to get qualified and get on with their working life and so it is not really an alternative answer to paying your way through university. The student loan is the most common option and often the only one. It is nice to see that not all students have the problem but it doesn't stop it from being a problem for many.

Good for those of you happy with your own situation and those who had it all thought out in advance, but do reserve a little sympathy for those less fortunate than yourself and who need advice on how to deal with it.

Oldernotwiser

mayb wrote: »

I think you are being disingenous OBNW. Everyone understands they will pay interest - what is not made clear is that it is added from day one of the loan so the amount has already increased before you begin to pay it off. This often does result in the loan increasing even when being paid off on a low wage, when work first commences after graduation.

Not everyone has rich parents or can work for many hours during their course - that very much depends on the course of study chosen some are more onerous than others, the timing of lectures etc. Working before going to university is an option for some, but you need to be over 24 before you are considered as a mature student and not be assessed for fees by your parents income.

Not everyone wants to wait to get qualified and get on with their working life and so it is not really an alternative answer to paying your way through university. The student loan is the most common option and often the only one. It is nice to see that not all students have the problem but it doesn't stop it from being a problem for many.

Good for those of you happy with your own situation and those who had it all thought out in advance, but do reserve a little sympathy for those less fortunate than yourself and who need advice on how to deal with it.

I have a lot of sympathy with those who have problems which is why I give my time offering advice based on both my professional knowledge and my private experience.

The Student Loan Company website says very clearly,

"These loans accrue interest at the rate of inflation, which means that the amount repaid has the same value as the amount borrowed."

The government website www.direct.gov.uk says,

"Student Loans accrue interest from the date they are paid out, up until the date when they are repaid in full."

If they were interest free whilst you were studying the information would say so and, in fact, you'd be paying back less (in real terms) than you'd borrowed. I don't have my original loan documantation but I'm sure that the conditions were spelled out equally clearly.

I'm afraid that I have to repeat my opinion that intelligent adults should read all the conditions when taking out loans for large sums of money and I don't have that much sympathy for those that can't be bothered to do this.