Worth paying back student loan?

angeldeelite

Linguistic_Chimp wrote:

Hi angeldeelite,
Just wanted to show my solidarity with your feelings. People say that the loan is just the same amount of money as you pay it back since the interest rate is in line with inflation, and whilst that is financially factually the case, it certainly doesn't feel like it at the time. I fact makes me look a bit like this when I get my Annual statement through: :eek:

Thanks! when i look at all the changes now i can see that i definitly went to uni at the wrong time. anyone who gets funding now it gets wiped after 25 years - i have to wait 40. also, they now have a young person bursary in scotland so you only need half the loan now too. oh well i had fun

tr3mor

angeldeelite wrote:

if you read it again i only graduated last year. if they expect me to be earning 25k a year already (which is what i'd need to be earning to cover the £600 interest) then they are sadly mistaken because i didnt do anything medical or particularly skillful like engineering. plus i came from a single parent family with not a lot of money and therefore needed that amount to see me through the years.

Well if you only graduated last year why would you make statements like:

angeldeelite wrote:

but i'm happy if they're happy, this debt will NEVER be paid off

It will be.

angeldeelite wrote:

I am earning over the threshold now but nowhere near enough to cover what they charge me in interest each year. i'll happily pay my minimum monthly payments they take off me but hope they realise this debt will never be repayed in full

30 years from now you'll be earning a hell of a lot more than £15k, in 1976 I would imagine the average wage was around 2-3k, who knows what it will be in 2036?

tr3mor

Linguistic_Chimp wrote:

Yeah that is what worries me mainly. Perhaps I'll go down the high interest route then and try to avoid looking at my Annual Statements from the SLC.

Just pin them next to the annual statements for your savings

lellie

Trem speaks a lot of sense in this thread. The student loan is cheap debt - keep it as long as you possibly can.

angeldeelite

tr3mor wrote:

Well if you only graduated last year why would you make statements like:



It will be.



30 years from now you'll be earning a hell of a lot more than £15k, in 1976 I would imagine the average wage was around 2-3k, who knows what it will be in 2036?

beacause i dont believe i will be able to pay off a debt that is going up 600 quid a year when i only pay £90. and yes i will begin to earn more eventually but by the time the debt will have swelled. the wages rise in line with inflation therefore my debt will still be relative to my wage.
as i said i'm happy to pay minimal payments but i just dont believe i'll b e able to repay a 22k debt by making minimum payments in 40 years - we'll see.

faithless

If anyone is thinking of paying off their student loan, but has any intention of ever taking out a loan for anything in the future (e.g. a mortgage) don't repay it! You can put the money you would've used to pay off the loan in a high interest savings account, and make money on it. You can then use the money towards your house deposit (or whatever), and you're only paying around 2% interest instead of about 6% for a mortgage.

Even if you're sure never going to need a loan, you're still better off just putting the money you'd use to repay it in a high interest savings account, cos you're still making money on it.

AddieH

Exactly, there isn't any other "real world" loan out there that is offered with as "good" a rate as the student loans we have at the moment. It may look like the interest is going up, but in reality the value of money is going down (as things become more "expensive").

The example I've always used is a can of cola, back when I was at school it was 35p, now you're looking at around 60p heading towards "double" the price. My bus fare is another example £1.50 when I started work 2 yrs ago, now it's £1.90!

Shame our wages aren't keeping up...

suki21

I paid mine off just to be rid of the student loans company, who I truly believe are evil.

...then I applied for the maintenance grant for my pgce...why oh why did I even bother, they've just messed it up from beginning to end. I could have spent the hours I've had to spend sorting it out working in paid employment and earnt more than they're going to give me anyway...grrr :mad:

ab7167

I would also be a little bit thankful that you don't have a pre 98 loan. For those of us that do, the repayment threshold is higher (£24k ish this year) but as soon as you earn over it, you are hit with full repayments. The monthly repayment is calculated to pay off your loan in 5 years. Therefore I graduated in 2001, starting salary of £20800 and because this was about £200 over the YEARLY limit, I was hit with immediate repayments of £126 per month. Instead of £44 per month which would have been the case on the new system. Granted the amounts are lower (I think mine was about £8k on graduation) but if you only earnt just over (as I did), the repayments were truly crippling, especially as I moved to London to work. I am extremely luck that I did an engineering degree, so my wage now covers it, but on my current salary of £29k my repayment on 9% would still only be £105 per month. Advantage is my payments will be complete in January (I overpaid slightly when I could) :-)
Not meaning to start a row, but it could be worst if they had kept the old system. And interest on loans has always been applied from the day you took it out. Hasn't it? I know mine was...
Ali