Student Loan 2015 Discussion

gadgetmind

How do the student loan company work out the interest rate? Do they use RPI figures at year end, so is there no way to work out interest rate in advance?

Taiko

amiehall wrote: »

Well for a start there is no final deadline. I could apply for a student loan now for year 11/12 if I so wished. They just want people to apply nice and early to give them time to process applications. There's also nothing to stop you applying now and cancelling later if you don't like the terms later. What kind of legal challenge did you have in mind?

Final deadline is 9 months after the first day of the academic year, Paragraph 9 of the regulations.

Lokolo

gadgetmind wrote: »

How do the student loan company work out the interest rate? Do they use RPI figures at year end, so is there no way to work out interest rate in advance?

Currently they use the March rate and then apply it from the following September for 12 months. I'd be surprised if they change this.

gadgetmind

Interestingly, I have the March 2012 RPI figure of 3.6% already in my spreadsheet. I guess I must have read it, stuck it in, and decided to fix later when I'd found which figure they used! I blame age ...

ridetherhythm

Don_Draper wrote: »

Just filling in the forms with my offspring for Sept 2012 start. We're applying for the fees loan & basic maintenance loan.

A) Can we apply now & then change our mind in, say, August 2012 if we decide instead to pay in full from our savings? How would we go about withdrawing from the loan before taking any of the cash? Can't find anything covering this in the T&C.

What would be the consequences e.g. if when she gets her results she decides to pull out completely from going to uni this September and then wants to apply again for a loan a year or two later? I read somewhere that you are only allowed to apply for a loan once - even if you don't ultimately take the cash -is this true?

Thanks for the advice.

Anyone able to answer this question as i too would like to know please?

melancholly

ridetherhythm wrote: »

Anyone able to answer this question as i too would like to know please?

i honestly don't know the specifics of how you do this, but it is certainly possible. plenty of students apply for the loans, miss their grades and end up having a year or two out instead. my student finance experience predates online systems so is no use for this in terms of what you actually do, but in principle, applying for the loan and not taking any student finance/not going to uni will have no impact on future applications. (there is a slightly greyer area about paying for a degree yourself and then wanting funding for a second degree, but that effects very few people and isn't quite the same as what you're asking)

setmefree2

gadgetmind wrote: »

How do the student loan company work out the interest rate? Do they use RPI figures at year end, so is there no way to work out interest rate in advance?

http://www.moneysavingexpert.com/news/loans/2012/04/student-loan-interest-to-hit-66

The interest rate will continue to be based on the retail prices index (RPI) measure of inflation, but while studying, a further 3% points will be added.
For the current loan system, the RPI figure announced for the prior March determines the rate for the academic year. It is extremely likely the same will happen for 2012 starters, but this has not been confirmed.

Lokolo

ridetherhythm wrote: »

Anyone able to answer this question as i too would like to know please?

Are we talking about Maintenance Loan or Tution Loan?

Maintenance will be difficult to change for the first installment because the time between results and starting (if starting September) is short and Student Finance are likely to be swamped. But you can always pay it off straight away through http://www.studentloanrepayment.co.uk

ridetherhythm

Are we talking about Maintenance Loan or Tution Loan?

Think the original poster was talking about the tuition loan and maintenance loan...ie taking neither loan and self-fund out of savings. But suppose it could equally apply to taking just the tuition loan and self-funding the maintentance part, or vise versa?

My situation is that our daughter has been awarded both the tuition and maintenance loan, so her 1st year loans would total 16.6K (9k+7.6K...London halls). Therefore, I am thinking twice about whether to take the maintenance loan. At a possible loan interest rate rate of 6.6% (RPI+3%) while she studies in London, it is making more sense to either fund the maintenance part out of either family savings, or increase our mortgage (which would be at a lower interest rate than the SLC). Also, most high street saving rates are struggling to keep up with inflation anyway.

Are you sure she would be able to immediately pay back in full the maintenance part of the loan, if we decided not to use it (ie. self-fund accommodation & living expenses)?

setmefree2

ridetherhythm wrote: »

Therefore, I am thinking twice about whether to take the maintenance loan. At a possible loan interest rate rate of 6.6% (RPI+3%) while she studies in London, it is making more sense to either fund the maintenance part out of either family savings, or increase our mortgage (which would be at a lower interest rate than the SLC). Also, most high street saving rates are struggling to keep up with inflation anyway.

I would think carefully before doing this. Make sure you read this

http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

In particular this:-

Monthly repayments are the same whether fees are £6,000 or £9,000

Whether you choose a course that costs £6,000 or £9,000 you'll repay the same amount each month, as that purely depends on what you earn (9% above £21,000).

Of course, the more you borrow the longer you'll be repaying. Yet it's worth noting that, as many people won't finish repaying before the 30 years is up (see key fact 17) unless you're a higher earner, picking a course with higher fees won't actually cost you more. See the min, max and average fees planned to be charged by each university (pages 9 and 10).

The same is true whether you take just the tuition fee loans or the tuition fee and maintenance loans. Whether you borrow £9k or £16.6k the repayments will be the same. Just a thought.

Re the 6.6% - this is just the first year of a 30 plus year loan. After year 3 (after graduation) the loan rate will fall to RPI...who knows where mortgage rates will be then? Just a thought.