Student Loan Debt

mariemcg

Sharon87 wrote: »

Yeah I would save up, then you have access to the money if you need it. You could get a savings account that pays more interest to you than you pay to student loan company. So you could earn more money on it.

It sounds so obvious when you put it that way that I am actually embarrassed :doh:

mirko

I'm sure if you went to a Financial Advisor he would tell you the same, don't pay off your student debt, put money aside instead!

I actually paid off my student debt earlier this year (all via payroll). In fact, I paid a little too much and the Student Loans Company actually owe me money (around 123 quid)!

Soubrette

mrsb83 wrote: »

Student loan debt is not the same as other personal debt.

You don't have to continue to pay it beyond retirement, it doesn't form part of your estate liabilities when you die, and it is irrelevant for the vast majority of credit applications.

Other than 'peace of mind' (questionable IMO)there is absolutely no reason to pay it off early. I only ever intend to pay the minimum through my employer, and don't consider it a real debt. I think of the repayments as a small 'graduate tax' I pay out of my salary.

This is precisely the attitude I'm trying to foster in my own children - I too do not do debt, if you want something you save for it (or at least a hefty deposit ), but this is a different kind of debt even compared to something like a mortgage.

mejustme_3

I have a old school student loan honoursstudentloans I earn £8 a month over the £2204 and have to pay it back, which was £100 plus a month which knocked my onto a DMP as I could not afford it.

mariemcg

mejustme wrote: »

I have a old school student loan honoursstudentloans I earn £8 a month over the £2204 and have to pay it back, which was £100 plus a month which knocked my onto a DMP as I could not afford it.

Sorry but what's a DMP?

kdenty

I had a student loan at about 1.5% and paid it off when it went up to about 3%.

I wish I hadn't as all loans cost about 8% plus now! I wish I'd kept the extra towards the deposit on our house (5% interest rate) and just paid it back the slow way.

My mum retires next year so doesn't have to pay back all of her student loan!

DMP - Debt management plan?

mejustme_3

DMP = Debt management Plan

chanie

Like one of the previous posters, I graduated in 2001. I took out the full loan, so my original debt was about £10,000. I've been paying it off slowly over the past 10 years and I think the debt is down to about £4000. According the the MSE calculator on here, I should be free of it in 2012/13.

It doesn't count in the same way as normal debts, so I don't think its anything to worry about.

I could be wrong, but I'm sure I read somewhere that it gets wiped out after 25 years (I think this is the case for you because you are on one of the older style loans).

mirko

chanie wrote: »

Like one of the previous posters, I graduated in 2001. I took out the full loan, so my original debt was about £10,000. I've been paying it off slowly over the past 10 years and I think the debt is down to about £4000. According the the MSE calculator on here, I should be free of it in 2012/13.

It doesn't count in the same way as normal debts, so I don't think its anything to worry about.

I could be wrong, but I'm sure I read somewhere that it gets wiped out after 25 years (I think this is the case for you because you are on one of the older style loans).

I think it's a little longer, but it does get wiped off if you don't pay it back after a certain period.

I'd be fascinated to find out the percentage of these loans that students have taken out in the past (and will in the future) are projected to actually be paid back.

redpete

mariemcg wrote: »

My inlaws don't "do" debt and would be horrified if they ever found out.

If they think that then they don't understand student loans either. These are set up as an alternative to grants that those of us old enough were fortunate to receive, we never had to pay these back at all. The Government has decided how much and under what circumstances the student loan should be paid back, it's not you avoiding the issue or being less than responsible. You say they don't 'do' debt - have they never had a mortgage? If not they are unusual and fortunate.

If and when you want to apply for a mortgage or car loans etc. the lenders do not treat student loan debts in the same way as they would other debts when looking at your creditworthiness. Why should you not treat it the same way that they do?