Student Loans 2012

setmefree2

The government has chosen to maintain its current system of means-tested loans, which are biggest for students from middle-income households, who get less help from grants but are offered bigger loans than those from wealthier backgrounds. While loan amounts have been increased, the threshold for those receiving the most generous ones has been lowered from £50,000 to about £42,000.

What happens if your partents earn more than £50k? Do you still get a means tested loan?

setmefree2

AndyGuil wrote: »

It is a little like a graduate tax except it ends when it is paid and you can't escape it by moving abroad.

The Institute for Fiscal Studies says that, for about half of graduates, the plan is essentially a 9% graduate tax for 30 years, because they will not finish paying off the debt by the 30-year cut-off point.

What a bunch of carp:money:

setmefree2

Can students pay back their loans early? The rules have not yet been set on this. Mr Willetts has said it is "important" that higher earners are "not able unfairly to buy themselves out" of the system by paying their loans back early.
He said the government would consult on penalties for early repayments, saying that there might be a 5% levy on repayments over a certain amount each year - or on early repayments made by graduates with incomes above a certain threshold, such as £60,000.
Wealthy students will, however, be able to pay their own university fees up front, avoiding accruing any debt at all.

http://www.bbc.co.uk/news/education-11483638

Well I think that I might just not bother taking your crappy loans - thank you very much:money:

Or take the loans and pay them back before your salary hits £60k?

AndyGuil

setmefree2 wrote: »

Ok - so from the BBC I've found this

http://www.bbc.co.uk/news/education-11483638


Can anyone explain to me what this means?

Does this mean that before you reach £21k interest will be charged at 0%, increasing to 3% plus RPI at £41k.

It means no interest will be charged until you earn £21k, they are offsetting this with higher interest for people earning over £41k.

setmefree2 wrote: »

What happens if your partents earn more than £50k? Do you still get a means tested loan?

It will not be means tested anymore. That was used previously to determine how much parents should pay upfront. There are no upfront payments in the new system.

setmefree2

Thanks soooo much for your replies Andy. Can I ask you - if I earn more than £50k what loans will be made to my son? Just Tuition or tution and maintenance loans. And if he gets given a maintenance loan how much will it be. Do you have to take a maintenance loan?

Lokolo

setmefree2 wrote: »

Thanks soooo much for your replies Andy. Can I ask you - if I earn more than £50k what loans will be made to my son? Just Tuition or tution and maintenance loans. And if he gets given a maintenance loan how much will it be. Do you have to take a maintenance loan?

Maintenance Loan without income assessment is approximately £3500, it rises every year, so you won't know until nearer the time.

He will get the normal non income assessed loan without grant or extra loan. And of course, tuition fees loan.

Oldernotwiser

setmefree2 wrote: »

Well what a terrible blow. After years and years of attempting to get Mortgage Free we now find that our kids will be burdened with a humongous mountain of debt if they go to university. Our eldest is already in Lower 6th, so there really isn't much time to deal with this

So this is my blog of our attempts to help them.

I believe that the first thing I need to do is find out what interest rate our children will be paying on these enormous loans and make sure that they are even worth taking from the government, as we presently have a mortgage rate of less than 1% (BOE base rate + 0.49%), it may well be cheaper for us to borrow the money.

Any thoughts?

Don't you think that it would be both useful and educational for your children (certainly the eldest) to be doing the research on this?

setmefree2

Lokolo wrote: »

Maintenance Loan without income assessment is approximately £3500, it rises every year, so you won't know until nearer the time.

He will get the normal non income assessed loan without grant or extra loan. And of course, tuition fees loan.

Thank you for your post. He doesn't have to take this loan does he?

setmefree2

AndyGuil wrote: »

It means no interest will be charged until you earn £21k

What nothing, zilch, nil, zero - not even RPI?

setmefree2

Oldernotwiser wrote: »

Don't you think that it would be both useful and educational for your children (certainly the eldest) to be doing the research on this?

Hi - I'm an accountant - I also have 2 degrees - and trying to get my head around the fact that these loans may be potentially poisonous and damaging to my son's financial health has taken me hours!

How do you expect my 16 year old son, who has AS level exams in just 4 weeks, to do that?

You may be happy to put your faith in politicians - I am not.