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'Students – lower earners deferring to 2012 could pay LESS' blog discussion

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This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.




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  • bluenose1
    bluenose1 Posts: 2,767 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    I think it is scandalous that those who lend £43,500 and earn approx £40,000 a year will end up paying back £133,000 when you factor in interest.
    Typical of Britain that we say oh well they are only paying it back at a very low rate. In my mind it is more important to look at the amount repaid over the full period.

    Gosh, I feel so sorry for kids nowadays
    Money SPENDING Expert

  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    edited 15 August 2011 at 4:25PM
    bluenose1 wrote: »
    I think it is scandalous that those who lend £43,500 and earn approx £40,000 a year will end up paying back £133,000 when you factor in interest.
    Typical of Britain that we say oh well they are only paying it back at a very low rate. In my mind it is more important to look at the amount repaid over the full period.

    Gosh, I feel so sorry for kids nowadays

    There's no will about it, they MAY end up paying back £133k, depending on earnings and interest. Of which would be over 30 years.

    I also wonder where you got £133k from.
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    And I imagine they'll be borrowing it, not lending it, otherwise one would question why they are paying it back.
  • bluenose1
    bluenose1 Posts: 2,767 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ViolaLass wrote: »
    And I imagine they'll be borrowing it, not lending it, otherwise one would question why they are paying it back.

    Apologies to the grammer police.
    Money SPENDING Expert

  • bluenose1
    bluenose1 Posts: 2,767 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Lokolo wrote: »
    There's no will about it, they MAY end up paying back £133k, depending on earnings and interest. Of which would be over 30 years.

    I also wonder where you got £133k from.

    My understanding is that they WILL pay back £133k based on the repayment graph published by Martin. Could be a little more / less depending on interest rate. No matter how many years it is over it is a hell of a lot to pay back.



    http://www.moneysavingexpert.com/family/student-loans-tuition-fees-changes#17
    Money SPENDING Expert

  • tyllwyd
    tyllwyd Posts: 5,496 Forumite
    edited 15 August 2011 at 7:16PM
    The other piece of information I'd like to see in that table would be the length of time over which the students would be paying in comparison between the two systems.
  • MSE_Martin
    MSE_Martin Posts: 8,272 Money Saving Expert
    Part of the Furniture 1,000 Posts Combo Breaker
    tyllwyd wrote: »
    The other piece of information I'd like to see in that table would be the length of time over which the students would be paying in comparison between the two systems.

    That was the original plan - unfortunately it is a massive job to change the model we've got and due to my position as head of the taskforce - i really didnt want to come out with something that wasn't accurate enough.

    When we launch the calc (in a couple of weeks) you'll be able to do a rough version of this yourself (ie lower the fees but under the new loan conditions) which will give a very rough indication (or to be more accurate just add 6k to the salary)
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • Lokolo
    Lokolo Posts: 20,861 Forumite
    Part of the Furniture 10,000 Posts
    edited 15 August 2011 at 11:03PM
    bluenose1 wrote: »
    My understanding is that they WILL pay back £133k based on the repayment graph published by Martin. Could be a little more / less depending on interest rate. No matter how many years it is over it is a hell of a lot to pay back.

    Exactly, its not for definite.

    And the number of people coming out of university earning £40k is very few, I would say less than 1%.

    You are also looking at the real terms which include inflation changes. So infact that £133k being paid back is only £77k in todays prices. If you want to look at the fact you will be paying back £133k which may seem a lot, by that time you will be earning £165k a year..... hardly a massive impact is it ;)
  • I see there are still some wild numbers being banded about in, or left out of, this argument.

    If a University Education was a Flat Screen TV, about to double or treble in price next year due to scarcity of the right kind of chips, then what would MSE advise all those who had set their heart on getting one this year or next and could in fact stretch to ordering it now instead of waiting?
  • ViolaLass
    ViolaLass Posts: 5,764 Forumite
    bluenose1 wrote: »
    Apologies to the grammer police.

    1. You don't think the difference between 'borrowing' and 'lending' is important? They're opposites.

    2. It's not grammar.
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