Student Loan Interest Rate 10/11

Lokolo

The announcement of RPI March being 4.4% will be a shock the most on here. However, this also means student loans can also get to a maximum of 4.4% from September this year.

However, currently you will only have a maximum of 1.5% rate. (at time of writing!!!)

The base rate is till 0.5%. A clause in the newer Student Loan rates (1998+) means it can never been more than 1% above the Base Rate.

However, as the base rate rises over the next 18 months (assuming it does), it also means that the student loan rate will rise. This will of course rise until it reaches its 4.4% maximum.

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Bad news for those that are pre 1998. Your loan will automatically go to 4.4% come September. However, you have had the advantage of your student loan being reduced this year. Shame it's not enough to cover this huge rate increase coming.

atypical

They could always decide to apply no interest again this year, but somehow I don't think they will.

glider3560

I think the MSE news article summarises my thoughts entirely

MSE wrote:

That means, with base rate currently at 0.5%, the rate charged should be 1.5%. Bis says a decision will be made in August. However, when the rate should have fallen to -0.4% last September, as RPI was negative, the Government introduced a 0% rate so it may bend the rules once again.

lordash

atypical wrote: »

They could always decide to apply no interest again this year, but somehow I don't think they will.

Sadly, I have a feeling the government may decide to remove the 1% above BofE clause instead. If they can get away with changing the rules last year, there's nothing to stop them doing it again this year.

Lokolo

lordash wrote: »

Sadly, I have a feeling the government may decide to remove the 1% above BofE clause instead. If they can get away with changing the rules last year, there's nothing to stop them doing it again this year.

Guess we'll find out soon

atypical

lordash wrote: »

Sadly, I have a feeling the government may decide to remove the 1% above BofE clause instead. If they can get away with changing the rules last year, there's nothing to stop them doing it again this year.

Isn't that clause required for the loans to be considered "low interest loans" under the Consumer Credit Act? Thus student loans are excluded from certain conditions that apply to normal loans e.g. not appearing on credit files.

Removing the clause would have a larger effect than just increasing the interest rate.

Renya

I hope it doesn't go up too much, I can see my student debt mounting already, and I'm not even at uni yet.

Taiko

You then have whatever any incoming government decide, don't forget.

atypical

Taiko wrote: »

You then have whatever any incoming government decide, don't forget.

Another reason we should all vote for the Lib Dems

sKiTz-0

Oh cool, so not only have I been shafted by my loan remaining the same while deflation was taking place, now I shall be getting even more into debt next year, while inflation is rising and rising, oh and my wage is staying exactly the same because my company can't afford to pay me any more.

What did I go to university for again?

I get poorer and poorer every single year in this country. I thought I would have a better life for myself, which is why I went to uni in the first place!! To get out of this trap.

So lets see, anybody my age who left school and got a job straight away will have bought a house in the early 2000s and seen its value double, while I'm getting into debt to get an education. Then when I come out of uni with 15k of debt (7.5k student loan) house prices are ridiculous, so I start saving for a deposit to get myself on the ladder (I'm 26 now after all, about time I moved out of my old man's place) then as soon as I've finished working 60-70 hours a week and paid off my debts, I suddenly need at the very least 10-15% deposit, Ideally 20-25% and can't get a mortgage anyway. Let alone for anything close to the value of a house despite the 'crash' which some think is over. Houses are still unobtainable, and will have to come crashing down one hell of a lot before people like me can afford to stop being live at home kidults and flee the nest.

So I'd have been better off going straight into work after school.

Most in the older generation have ridden out one or 2 HPI booms and have seen their assets increase 3 fold, so they are ok. And my generation will be paying to fund their pensions, yes very good. Meanwhile when I get to pension age (probably80/90 for my generation) there won't be a state pension left. Wohooo, more poverty.

Oh and then there's the really poor, who can't aford anything. The government pays for them to live in a house, ok. Pays them to do nothing if they don't have a job. And pays them, uncapped, for any amount of kids they have. Oh, so more babies = more £££, why didn't I think of that? 'cos I'm not a scrounging layabout.

So if you're really rich you're ok, if you're really poor you're ok, but if you are in the middle then you're screwed, and getting screwed harder and harder year upon year.

The older generation are mostly ok, my generation are pretty much all shafted, I'd hate to be somebody at uni now, unless this country and its people do something drastic to sort it out.

How long can this mounting pressure go on before something blows????

Who do I vote for again to get this sorted out?

farso

sKiTz-0 wrote: »

Oh cool, so not only have I been shafted by my loan remaining the same while deflation was taking place, now I shall be getting even more into debt next year, while inflation is rising and rising, oh and my wage is staying exactly the same because my company can't afford to pay me any more.

What did I go to university for again?

I get poorer and poorer every single year in this country. I thought I would have a better life for myself, which is why I went to uni in the first place!! To get out of this trap.

So lets see, anybody my age who left school and got a job straight away will have bought a house in the early 2000s and seen its value double, while I'm getting into debt to get an education. Then when I come out of uni with 15k of debt (7.5k student loan) house prices are ridiculous, so I start saving for a deposit to get myself on the ladder (I'm 26 now after all, about time I moved out of my old man's place) then as soon as I've finished working 60-70 hours a week and paid off my debts, I suddenly need at the very least 10-15% deposit, Ideally 20-25% and can't get a mortgage anyway. Let alone for anything close to the value of a house despite the 'crash' which some think is over. Houses are still unobtainable, and will have to come crashing down one hell of a lot before people like me can afford to stop being live at home kidults and flee the nest.

So I'd have been better off going straight into work after school.

Most in the older generation have ridden out one or 2 HPI booms and have seen their assets increase 3 fold, so they are ok. And my generation will be paying to fund their pensions, yes very good. Meanwhile when I get to pension age (probably80/90 for my generation) there won't be a state pension left. Wohooo, more poverty.

Oh and then there's the really poor, who can't aford anything. The government pays for them to live in a house, ok. Pays them to do nothing if they don't have a job. And pays them, uncapped, for any amount of kids they have. Oh, so more babies = more £££, why didn't I think of that? 'cos I'm not a scrounging layabout.

So if you're really rich you're ok, if you're really poor you're ok, but if you are in the middle then you're screwed, and getting screwed harder and harder year upon year.

The older generation are mostly ok, my generation are pretty much all shafted, I'd hate to be somebody at uni now, unless this country and its people do something drastic to sort it out.

How long can this mounting pressure go on before something blows????

Who do I vote for again to get this sorted out?

Fantastic post, You have summed up how I think most people will feel about this situation and pointed out the strange world we live in where the government wants us to do well, but once we start to do so keeps pushing us down.

I think that the government, whoever that may be, will have to do a lot in order to stop well educated graduates leaving the country to avoid the crazy ways our government likes to redistribute our hard earnt cash. I know that I have already looked towards leaving the country once I have graduated.

Who do you vote so sort this mess out? It depends if you believe anything that they say in the heat of the elections...