Should I still make payments to SLC as a graduate student?

Chick

Ok, this might be a pretty silly question...I am due to start another degree next month as a graduate student & I still have around 7K SLC loan to pay off, on the 'new system' i.e. only start paying back once you earn over 15k or something.

As I will be leaving full-time employment my payments will be stopping...the question is, is there any wisdom at all in making a regular payment e.g. 25 quid a month, if only to keep the interest at bay?

I know that I could just forget about this loan until I finish my new course, however, the realisation dawned a few years ago that a student loan is best tackled as soon as possible rather than just leaving it- the interest does stack up at a scary rate, it's not a freebie loan as many would like us students to believe.
(Having said that, if you can invest it something then that's a different story).

Any thoughts, am I just bonkers to try & keep some repayments going? I will be working part-time in the term and also through the holidays,

Cheers, Chick

DrFluffy

What course are you doing.

If it is a funded doctorate, what kind of funding do you have? If it is a straight stipend, then no. If it is one of the more modern 'fellowships' which attract more money, then these are counted as earnings, and if you get more than £15k, then you may have to start paying off your loan.

If you can afford to start making payments, then as you;ve already noted, it would be wise to do so, as the interest will mount.

Sillychuckie

if, instead of paying off the loan with say, £25 ppm (as you suggested you might), you have the self control to pay the same amount into a high interest savings account (maybe a regular saver, 10% or so...), then after a year, if you pay the full amount to the loan, you'll be better off (not by much of course as we are dealing with such small numbers).
The point is, providing you can SAVE the money you would otherwise sideline to pay the loan off with (at a higher rate than the loan repayment rate), you'll be better off.
It probably wont seem that way looking at the loan statement (and the gathering interest), but im pretty sure it is the case.

Chick

Hiya,
Fluffy- going to be studying medicine as a graduate on the 5 yr at Kings in London- financial apocalypse, I know.
So, pretty much no funding for it but am getting a student loan which I have to use to pay towards my 3k tuition fees- as I'm sure you know, graduates are not entitled to a student loan for fees like new students are (so much for the government banging on about nobody having to pay it upfront...but hey, that's a whole new discussion thread entirely!)

Good idea re putting it in a high interest account- I know it sounds madness wanting to keep paying old loan off but I think that having graduated & been working for a few years now I really want to keep a lid of the debt.
Though going off to be a medical student is not going to be cheap but I'm convinced I can get through without pilling up crazy amounts of debt.

Luckily I've done the student thing before & hopefully got the majority of the partying out of my system- definitely think my social life will have to be curbed...am planning to work in term time in the first couple of years & of course in the holidays.
The prospect of racking up more 'never, never' debt through excess 'social acitivities' is really not appealling!

Cheers, Chick

DrFluffy

I'm a graduate on a 5 year course too... Although the implications aren't as bad for me being under the old fees system, we've never qualified for fees help (unless you self funded degree number one, or the finds came from private sources)...

If you manage to pull medicine off without debt, let me know your secret! Actually, there are about 50 people in my year who would love to know!!! I think I'll be about £35-40k in debt by the end, and that is without having a crazy social life, having a job, and charitable bursaries!

Chick

Ha ha, I don't doubt that I will be getting in to tons of debt, it's just a question of trying to do it without reaching epic proportions...whatever that is now as students seem to be getting into more & more debt.

For me, student loan debt is going to be a given, it's just I want to stay away from those professional studies loans for as long as possible...had meeting at HSBC the other week & although it's 'nice' they will loan me 12/15k/whatever I want, I will most definitely pay through the nose for it- no surprises there.
Out of interest fluffy- what kind of charitable bursaries have you received whilst studying medicine?

muddyfox470

I swear the 'you don't have to pay anything until you earn over £15000' is relevant to all loans from the SLC, but whilst you are not paying it off, it is still earning interest...

I was told that I wouldn't have to pay it off until I earned over £15k - unless I chose to.

Ian

Diminutive

The debts get written off after 25 years =D So perhaps you should work out if its worth paying off the interest if your debt will last more than 25 years.
You will only ever end up paying 5% of your annual wage, times 25. So if your total repayable amount is more than that, theres no point in paying interest. Of course, with inflation, that becomes pretty irrelevant.

Skiduck

Chick - I paid my Sl off for about 6 years at £10 per month, I moved a few time all over the world (not that that matters) but I never sent the declaration back saying that I was earning over 15K
I stopped paying them a while back, I have one of the best credit ratings of anyone.
This is just my experience. I repaid probably 75% of the loan but, as i moved so much, I didn't know exactly how much was left and where I could contact them - I just left the direct debit going for a bit.

gruey

can anyone please help me..i am 9000 in debt from a student loan and earn 16000 as a manual worker............the interest comes out of my national insurance..........Is there any way that I can avoid paying/ erase my student loan completley.


Any tips whatsoever would be greatly appreciated.


many thanks

CrispyUK

gruey wrote:

Is there any way that I can avoid paying/ erase my student loan completley.


Any tips whatsoever would be greatly appreciated.


many thanks

That would be fraud which you're not going to get any advice on here.