Help With Student Loans - HERE!

mayb_2

That comes over loud and clear in your posts - perhaps you could pass that to the bankers and the governent who would appear not follow your advice.

I am sure if I was taking out a loan I would be relying on the paperwork I was given and the advice that came with it rather than checking up on websites for the small print. Are you also saying this is spelled out loud and clear in that because it certainly wasn't in the past?

BruceyBonus

Having read this thread yesterday, I thought I would have a chat with some people on my course about interest on their loan. One didn't realise there was any interest, most thought it was only charged during repayment and very few knew the actual rate. This really surprised me as they aren't stupid people - they will all have an A/A* in Maths GCSE and at least 3 A/B grade A Levels.

This really surprised me as it is in black and white on the payment schedule letter:

SLC wrote:

Interest on your loan will start to accrue once the first instalment has been paid. Interest is currently equivalent to an Annual Percentage Rate of 4.8% and is subject to change in September wach year. Details of any changes to the interest rate can be found on our website.

Oldernotwiser

mayb wrote: »

That comes over loud and clear in your posts - perhaps you could pass that to the bankers and the governent who would appear not follow your advice.

I am sure if I was taking out a loan I would be relying on the paperwork I was given and the advice that came with it rather than checking up on websites for the small print. Are you also saying this is spelled out loud and clear in that because it certainly wasn't in the past?

Well, I think that BB's post says it as well as anything I could.

mayb_2

I am 54 now and older and wiser than I was as a student I am sure, no matter how intelligent I was at that time. I actually feel sorry that students have to deal with this sort of thing before they even start their working lives.

I believe this situation acts as a deterrent to some who may otherwise have been able to attend university.

Being a student is something that brings many experiences and helps people to grow up and learn about life and what they want to do with it. This includes budgeting and handling their finances. It should not be a time to be handling debts and worrying about real financial difficulties.

I think we must beg to differ on our attitude to those who did not understand just what they were taking on and probably would still have had no choice but to do that anyway. The loan is not a gift of the government and will exist outside of mortgages etc for many years into the working life of most students if not for ever, regardles of how the interest is set.

In the current economic climate nobody can be sure of getting employment in their chosen field once qualified and many will be earning lower wages than they may have anticipated a degree would earn them. In real terms their debt is accumulating interest and I cannot see that it will mean they don't actually pay more than they borrowed in real terms if it is doing this during a period when no money is paid off of it.

So in conclusion it would appear I must beg to differ from you on this. I gather that you feel the system is both fair and transparent and I cannot agree.

Lokolo

mayb... I actually enjoy it haha.

I am 20, I am studying nothing finance related but I post here a lot, and in Savings and Investments, I actually find it good as a hobby, yeh pretty sad, but I like it nonetheless.

Indeed a lot of students feel it is completely unfair, and yes, in the perfect world it would be free to go to university and there would never be a recession, but its not a perfect world.

I have to disagree about students handling debt, yes it is quite an unfair things to put a student under but once again, as you said, its a life experience.

My brother (who is a year and a half younger than me) just took out a £75 a month mobile phone contract, for 18 months. Now, how redicilous is that? Yes he can afford it with his job but all the same, its absolutely appaling, I tried to explain to him that there are better things to do with his money, but he wouldn't listen. He didn't research anything or ask anyone, which is where I think the problem lies with a lot of students. They don't find out this information because they cannot be bothered, they want it told them directly in big bold letters, which doesn't even happen in real life does it?

I do agree about getting employment, I am lucky (as well as proactive) in what I am planning for a career and my graduate job I would like is £27k a year, which is pretty awesome for a graduate. I am currently looking for my placement which is at the same company, on £17k, I have got to final interview/the actual job, but a lot of people at the university haven't even started looking yet, and I think this also backs up my point earlier, a lot of students want them to be spoonfed everything, not go out and do something until they really do have to.

Where I looked up about student loans before I went to university, a lot of students I know (as in this thread) are only finding out about interest and stuff in the their first year of university....

Oldernotwiser

mayb wrote: »

I am 54 now and older and wiser than I was as a student I am sure, no matter how intelligent I was at that time. I actually feel sorry that students have to deal with this sort of thing before they even start their working lives.

I believe this situation acts as a deterrent to some who may otherwise have been able to attend university.

Being a student is something that brings many experiences and helps people to grow up and learn about life and what they want to do with it. This includes budgeting and handling their finances. It should not be a time to be handling debts and worrying about real financial difficulties.

I think we must beg to differ on our attitude to those who did not understand just what they were taking on and probably would still have had no choice but to do that anyway. The loan is not a gift of the government and will exist outside of mortgages etc for many years into the working life of most students if not for ever, regardles of how the interest is set.

In the current economic climate nobody can be sure of getting employment in their chosen field once qualified and many will be earning lower wages than they may have anticipated a degree would earn them. In real terms their debt is accumulating interest and I cannot see that it will mean they don't actually pay more than they borrowed in real terms if it is doing this during a period when no money is paid off of it.

So in conclusion it would appear I must beg to differ from you on this. I gather that you feel the system is both fair and transparent and I cannot agree.

I'm of a similar age to you and would also prefer a system of funding that didn't rely on loans. However, I would also prefer that far fewer people went to university than is currently the case, which I doubt would be popular with many posters here. Perhaps people of 18 shouldn't have to "worry" about student loans, but people of this age do now take out credit cards, phone contracts etc so need to understand what they're doing.

I'm sorry that you don't understand the concept of a loan at the rate of inflation costing the same amount to repay as when first taken out, but it does apply so you'll have to take it on trust. And yes, people will be paying this back over many years, but never at a rate they can't afford and never if their employment circumstances change for the worse.

I've quoted information from relevant websites which is how this age group get much of their information and BB has quoted from the payment schedule s/he received. I really can't see how much clearer this information could be. If we were talking about disadvantaged young people with learning difficulties I could see it might need pointing out in large neon letters, but for the future doctors, teachers and managers I really think that the information is clear and available.

mayb_2

Hmmmmmmmm as I have said I don't agree. You are entitled to your view as I am mine.

The loan as I have said is subject to some time of accumulation of interest when it is not possible to repay it. I know for a fact that this can result in the loan accumulating interst at a faster rate than it is being paid off so the debt itself increases and atracts more interest, particularly if you are not able to pay at outset of work. This is not difficult to understand either if you put your mind to it. The longer a loan lasts the more interest you pay is a concept of all loans on credit cards for instance. So in reality it is costing you more than you originally borrowed in real terms.

Oldernotwiser

mayb wrote: »

Hmmmmmmmm as I have said I don't agree. You are entitled to your view as I am mine.

The loan as I have said is subject to some time of accumulation of interest when it is not possible to repay it. I know for a fact that this can result in the loan accumulating interst at a faster rate than it is being paid off so the debt itself increases and atracts more interest, particularly if you are not able to pay at outset of work. This is not difficult to understand either if you put your mind to it. The longer a loan lasts the more interest you pay is a concept of all loans on credit cards for instance. So in reality it is costing you more than you originally borrowed in real terms.

If you mean compound interest, why don't you say so?

mayb_2

Why do I need to? - I am trying to make this as clear as I can - which is something a lot of loan paperwork fails to do.

Oldernotwiser

mayb wrote: »

Why do I need to? - I am trying to make this as clear as I can - which is something a lot of loan paperwork fails to do.

I think that using the term "compound interest" is rather clearer than your lengthy description!