Student Loan Interest Rate 10/11

atypical

Our loans are at base rate + 1%, NS&I ILS are at RPI + 1%. I think we all expect the latter to rise before the former. Does that make them a no-brainer for those who save their student loan?

It's actually RPI + 0.85% for the first year but the same argument applies.

naf123

I have a question re student loans.

As I understand, repayments are a certain % deduct from your salary if you earn above 15K

Is that before tax or after tax?

I.e I earn 17K, pay taxes, then pay student loan?

Or is it 17K, deduct student loan, then charge tax?

Because the more you earn, the more tax deducted.

Im wondering - if one can struck up an arrangement with an employer to pay below 15K and the remainder go straight to the student loan tax free!?

MrsManda

naf123 wrote: »

I have a question re student loans.
As I understand, repayments are a certain % deduct from your salary if you earn above 15K
Is that before tax or after tax?
Or is it 17K, deduct student loan, then charge tax?
Because the more you earn, the more tax deducted.
Im wondering - if one can struck up an arrangement with an employer to pay below 15K and the remainder go straight to the student loan tax free!?

SL repayments are 9% everything over £15K gross you earn (ie. before tax). But this doesn't mean you get the SL repayment taken out of your salary and then get taxed on the rest of it in terms of income tax, national insurance contributions etc..., the tax you pay is based on your gross income as well.
Why would paying you less than £15k mean you didn't get charged tax? Income tax is on everything you earn over £6475 (or something similar can't remember the exact figure). Payments to the student loan company through PAYE is automatic via the HMRC and is based on how much you earn in each salary payment. You can pay more than the 9% over £15K if you want to via their website but not via PAYE but I'm unsure why you'd want to.

The_One_Who

naf123 wrote: »

Im wondering - if one can struck up an arrangement with an employer to pay below 15K and the remainder go straight to the student loan tax free!?

Not only could that not be done, as explained by MrsManda above, it would also be highly unethical. I would seriously question any employer who even contemplated it.

sKiTz-0 wrote: »

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.

Whilst that may say what some people are thinking, it's grossly inaccurate.

My understanding it that you have always needed a fair chunk for the housing deposit. High percentage mortgages are a pretty new thing. Whilst I agree about house price rise being astronomical and arguably unsustainable, that's the price you pay on the free market.

Many who go to work straight after school (excluding those who are lucky enough to get onto apprenticeships or training programmes) are stuck in dead-end jobs, usually retail. So yes, they are earning money, but not usually that much.

Not everyone who is 'poor' is 'scrounging' off the state. A lot of these people are working, sometimes more than two jobs, just to make ends meet. I would argue that these people are getting shafted more than the middle classes.

And then of course, all elderly people are rich. That's why many need to make a choice between heating their home or eating in the winter. Yes. Absolutely rolling in it.

naf123

MrsManda wrote: »

SL repayments are 9% everything over £15K gross you earn (ie. before tax). But this doesn't mean you get the SL repayment taken out of your salary and then get taxed on the rest of it in terms of income tax, national insurance contributions etc..., the tax you pay is based on your gross income as well.
Why would paying you less than £15k mean you didn't get charged tax? Income tax is on everything you earn over £6475 (or something similar can't remember the exact figure). Payments to the student loan company through PAYE is automatic via the HMRC and is based on how much you earn in each salary payment. You can pay more than the 9% over £15K if you want to via their website but not via PAYE but I'm unsure why you'd want to.

Because sometimes the lower your salary is, you may be entitled to more tax credits etc

If your official salary is "lower" and employer pays the remainder to the student loans directly, making the official salary look lower

But then, one would need an employer willing to do all of this.... there seems nothing"illegal" about this. Just an alternative way of paying? is a " Christmas bonus" taxed?

MrsManda

naf123 wrote: »

Because sometimes the lower your salary is, you may be entitled to more tax credits etc
If your official salary is "lower" and employer pays the remainder to the student loans directly, making the official salary look lower
But then, one would need an employer willing to do all of this.... there seems nothing"illegal" about this. Just an alternative way of paying? is a " Christmas bonus" taxed?

If your salary is lower than £15k then you don't pay student loan contributions at all so why go through the trouble of making your salary look smaller then paying off the student loan? In any case I don't think your employer would be able to pay your student loan in this way as it's automatic like your income tax. Unless they agreed to pay off your student loan outside of PAYE ie. directly via the repayment website.
Bonuses are taxed as part of your usual salary.

The_One_Who

naf123 wrote: »

Because sometimes the lower your salary is, you may be entitled to more tax credits etc

If your official salary is "lower" and employer pays the remainder to the student loans directly, making the official salary look lower

But then, one would need an employer willing to do all of this.... there seems nothing"illegal" about this. Just an alternative way of paying? is a " Christmas bonus" taxed?

What about those who don't have student loans? Are they just getting money paid to them directly under the table? Or will they be getting taxed on it through the normal payroll process? Really, if you want a job that pays less then go get one, don't expect the employer to fiddle the numbers.

naf123

The_One_Who wrote: »

What about those who don't have student loans? Are they just getting money paid to them directly under the table? Or will they be getting taxed on it through the normal payroll process? Really, if you want a job that pays less then go get one, don't expect the employer to fiddle the numbers.

I always used to think builders who ask to be paid in cash are getting money "under the table"

If your employer can pay a grand or two of your salary "under the table" ie in cash, then I guess your'e very lucky.

But I can't imagine employers finding the spare cash to do that unless they are builders!

The_One_Who

Well is that not what you are suggesting? Make it look like salary is lower than it actually is, then use the other money to pay off the loan. Getting paid in cash is fine, as long as you declare it. Which you wouldn't be.

kazmeister

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?

Hallelulah - someone actually has the borls to say what a lot of people are thinking.

The_One_Who wrote: »

Whilst that may say what some people are thinking, it's grossly inaccurate.

My understanding it that you have always needed a fair chunk for the housing deposit. High percentage mortgages are a pretty new thing. Whilst I agree about house price rise being astronomical and arguably unsustainable, that's the price you pay on the free market. My Ex and I had a 100% mortgage in the mid 80's and are still suffering for it
Many who go to work straight after school (excluding those who are lucky enough to get onto apprenticeships or training programmes) are stuck in dead-end jobs, usually retail. So yes, they are earning money, but not usually that much. Whilst I earn a decent wage (started work straight from school as no parental support to encourage further study) I am not earning as much as those who stayed on to study so true.
Not everyone who is 'poor' is 'scrounging' off the state. A lot of these people are working, sometimes more than two jobs, just to make ends meet. I would argue that these people are getting shafted more than the middle classes. We are poor despite my husband working 80 - 100 hours overtime a month to pay of debts we incurred over the years trying to maintain a roof over heads having lived through ridiculous mortgage rate rises so yes we feel shafted.
And then of course, all elderly people are rich. That's why many need to make a choice between heating their home or eating in the winter. Yes. Absolutely rolling in it. There are many elderly far from rich, my dear old nan having worked into her 70's ended up having to sell her home to pay the £2200 a month fees for a state run residential home where standards were appalling and the stench of urine hit you when you walked through the door

I have a son in year 13 hoping to go to uni in September and really have no idea how we can fund it. yes he can get a student loan to cover his fees and yes he can get a maintenance loan but the maximum would leave him short before he even thinks about food, clothing or books etc. He has tried to get a job but so far failed miserably despite being a well mannered, sensible and smart young man (what other people say about him not just my opinion) with good references.

So far over the 3 years he is expected to pay out £9870 for tuition and £12480 for accomm TOTAL £22350

The maximum student loans he can get are £9870 for fees and £10692 for maintenance. TOTAL £20562

This already leaves him with a shortfall of £1788 without the fees increasing next year which I'm sure they will or buying anything else. Unfortunately as a dual income family he cannot get any additional grants to help him through this mess so what option does he have but to borrow more cash at more expensive rates.

If we were lazy shirkers we would get all the help we needed to fund his place and as for some people stating that if you are on benefits you are on the breadline then its a load of codswallop. My last job took me into peoples homes and trust me when you see the poor pensioner sat watching the black and white portable in the telly and compare it to the person living of the states 50" flat screen with surround sound, blue ray player and all the other mod cons, plus the fag packets and beer cans littered about the houses, then its no wonder the country is in a mess. People arent working because the government (whichever party it may be) has allowed it to happen.

Ok off my soap box now in attempt to find ways of helping my dear son in his quest to better himself.