Student Loan Debt

Kim_Possible

I clicked on your thread as I am alway curious re Student Loan repayments.
I have no other debt apart from the new style student loan.
Since grauating, unable to secure a degree related job and doing admin, I earn just over the threshold and 8.00 per month fis taken from paycheck.
Despite reading up I have never reached a conclusion should i or should i not start to make repyments.
And if not at this time.... when should I.
PS Having read this thread I already put £ into a high interest savings account.
So im just saying your not the only one wondering what to do!
Ive read Martins guide here but non wiser

MilneBay

Hi Kim

I assume as you have a new style loan then you are under 30. Surely you would be better to keep any spare money and save for a deposit for your mortgage?
I too hated my student loan but have now grown used to it. It has taken me 10 years to start making decent payments towards it but probably made no real impact. I have no other debt other than a mortgage but really can't see any reason to overpay the student loan. It is the lowest interest rate on a loan you are ever likely to get (think new style loans currently about 1.5%) and in the event that something happens to you and you can't work you pay nothing.
You don't know what life will throw at you - maybe you will do a low paid but worthy job and never reach the threshold, maybe you will want to be a stay at home mum for a couple of years, heaven forbid you might have an accident and be unable to work.
What will be of more benefit to you? A decent sum in the bank in savings or the total reduced on something you wouldn't have been asked to pay in any of the above circumstances?

If you have no debt (mortgage included) and six months worth of wages in the bank, pay off your student loan. If not then it is low (no)risk and therefore low priority.

MB

snowqueen555

Post 2006 loans get wiped after 25 years, before that (my era) it is retirement age of 65.

I didn't take out any student loans but wish I had done it and enjoyed myself a little

ellesbellesxxx

Don't be ashamed about student loan! Everyone has it! x

DD265

I've been thinking about my student loan lately too. I have other debts to pay back first (and no mortgage/rental to speak of yet) but I've been wondering whether I'm actually going to even bother trying to pay the loan back.

The student loans might have low interest rates - but low interest rates of £20,000 is still a lot! I did a four year sandwich course (graduating 2010) and was not eligible for any grants. I got one in the final year, then shortly after graduation the council said they'd screwed up and I had to pay it back. That I am paying back at £10 per month (it's interest free). I earn just over minimum wage and unless I do lots of overtime, I'll stay under the threshold a while longer.

I figure that to make any dent in it at all, I'd need to be paying back more than the interest and given that even my interest is earning interest, it'll be a long time before I can afford to do that!

katsu

marie,

Perhaps a good place to start is to review a joint SOA with your husband and look at the general income and expenditure and agree a fair division of joint income against joint expenditure and then see how much you both have left over for your repayments and personal spends. If he is against debt then he must be against wasting money so you can review utilities etc.

If he is so keen to clear this debt then maybe he can pay more of the joint expenses so you can throw more money at this debt? If not then he isn't that keen to get it cleared.

My DH and I cleared debt together as we are married so debt belongs to us both. It might help that we've been together since we were students, but we came out of uni with different debt levels.

Stick around here - there are lots of fantastic boards here and you will get lots of help and moral support.

All the best.

mariemcg

katsu wrote: »

marie,

Perhaps a good place to start is to review a joint SOA with your husband and look at the general income and expenditure and agree a fair division of joint income against joint expenditure and then see how much you both have left over for your repayments and personal spends. If he is against debt then he must be against wasting money so you can review utilities etc.

If he is so keen to clear this debt then maybe he can pay more of the joint expenses so you can throw more money at this debt? If not then he isn't that keen to get it cleared.

My DH and I cleared debt together as we are married so debt belongs to us both. It might help that we've been together since we were students, but we came out of uni with different debt levels.

Stick around here - there are lots of fantastic boards here and you will get lots of help and moral support.

All the best.

Thanks so much for your support. I HATE talking about money and avoid these kinds of conversations at all costs but you are right - we need to bite the bullet and have "the money" talk to sort it out - especially as we may be hearing the pitter patter of tiny feet in the not too distant future .....!!! Not sure whether to say :j or :eek:!!!

littleminxof44

My daughter graduated in 2001 and shortly afterwards gave birth to her son, existing since as a single mother. Does anyone know whether the earnings rule for repaying the student loan can be raised in these circumstances? She is currently earning £23,000 - £24,000 p.a. and repaying the loan but really struggling with only one income coming in. The father can be discounted as he was a US citizen and cannot be traced!

cattyboo

Hi mariecmg,

Firstly, big well done to you for paying off the credit cards! :T And secondly, don't waste any time worrying about student loans, as someone has already said they don't count for credit applications and if you haven't paid it off by the allotted time then it just gets wiped, no biggy. Also the repayments are income linked so even if you're earning enough to be making repayments they're designed to always be manageable (not fun of course, but manageable!).

The loan system is very complicated, made more so by the fact that it's changed a few times in the last few years so there's about 3 systems to get your head around! I used to work for a local council processing these applications so I know a bit about it (and having graduated from my degree a couple of years ago I have quite a loan under my belt too, I just get the yearly statement they send, look at it, go AAAAH! :eek: and shred it!). Basically, (and correct me if I'm wrong!) it sounds like you entered uni when the fees were around £1200ish a year (those were the days eh?!), if this is correct your loan will be wiped if it's not paid back by the time you're 65. For those who started uni a bit later (2006ish) when the fees jumped to around £3000 a year then the system is different and it gets wiped 25 years from the date when you were eligible to start repayments (the April after you finished your course). Hope that makes some sense to the people who were a bit confused (it is confusing!). Lord only knows what'll happen to the poor blighters wanting to go when the gigantafees start. All looking a bit dire, too many people with degrees, not enough jobs for them, unis are all broke...sigh

Anyway, panic not, and well done again for getting debt free, woop! :T

C xx

katsu

mariemcg wrote: »

Thanks so much for your support. I HATE talking about money and avoid these kinds of conversations at all costs but you are right - we need to bite the bullet and have "the money" talk to sort it out - especially as we may be hearing the pitter patter of tiny feet in the not too distant future .....!!! Not sure whether to say :j or :eek:!!!

Marie,

I used to hate talking money too - hang around here and you will get to feel way better about it

The reason I'm encouraging you to talk to him is that you are married so have a joint stake in your financial future - especially if your income will drop whilst you are off on maternity leave etc. Try doing it by looking at an SOA as the SOA is less emotional - the council tax and mortgage/rent are fixed costs, look at agreeing if one of you will check out utility comparisons etc and treat the SOA as a joint responsibility.

All the best.