'Don't pay your kids tuition fees upfront' Discussion Area

Don_Draper

I think that it would be useful to know what parents who have been wondering what to do about paying upfront actually chose to do in the end for students who started their courses in October 2012, and what the reasoning was for the choice.
In our case, in the end we paid upfront. We were lucky enough to be able to afford to do this.
We guessed that maybe 80-90% of students will never pay off their loans. For the 10 to 20% that we guessed may/will pay it off, into which category we think our child falls, it felt right not to take the loan in the first place so not burdening the child with this loan as they embark on their careers.
Why do we think our child will be a high earner and so falls into this category? Good university (Oxbridge), marketable subject, hard-working, getting excellent grades, clearly defined career path, already being courted by employers that pay excellent salaries.
The main risks are that our child will choose not to continue on this path on graduating, or will take a career break to have a family, in which case it would probably have been better to take the loan. Maybe it's an easier decision to make for males than females in this situation?
Down the line our second child is hoping to head the same way, but to study a much less sought-after subject. So we will have to decide anew what to do. Although for the sake of fairness we would probably have to fork out upfront rather than risk any resentment later on.
I would be interested to hear how others who chose to pay upfront arrived at that decision.

DAISYDOG

My conclusion is that unless the student is hopeless and never makes any decent money. the 6.6+ % interest rate is very expensive and risky.

This student loan has no clear terms and conditions and no way of getting detailed calcs to compare with other products.

Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use cash isas. against the student loan.

If the ISA interest rate increases the RPI will increase so the margin will remain.

the student loan company does not pick up the phones and do not have an e-mail even though
They have an obligation per section 6(c)of the The Electronic
Commerce (EC Directive) Regulations 2002 to list an email address.
This requirement is not optional.

I think these loans are the biggest misselling of a financial product ever. it is impossible to get accurate figures to compare .

My calc is 5275 pounds interest before starting to pay the loan off

As the student loan company have no emails,
Can anyone answer my questions for them below?


1. I want to compare with taking out a mortgage at a rate of 2.2-3%. or 3.9% fixed for 10 years.
What interest my daughter will I owe at the first student loan payment .
i.e after 4 years, Based on 6.6% .for £38,200 + what interest?

2. What does the info below mean if the loan is paid off early


Repayment Plan 2

The Government has consulted on whether early repayment charges may apply, and depending
on the outcome of that consultation and subject to Parliament, you may incur an early repay]ment
charge.

3. I want to compare if its cheaper for me to get a mortgage for 10 years at 2.2-3% or 3.9% fixed
or use my cash isas, or to take the student loan. How do i do this? If its going to be cheaper to get the money by loans from elsewhere I want to know and be able to calculate the difference.
Just like you can when you get a morgage.

4. where are the exact terms and conditions for this financial product.?
Is it misselling if I cant understand how much I will have to pay back in different scenarios. eg RPI was up to 24% in a year in the 1970s, ? What protection is built into the loan for rpi ? is there a maximum capped rpi rate? How is the interest calculated?

5. I have assume my daughter will earn the higher amount currently at 6.6%. I think she will pay back 60k over 9 years 20k interest? please confirm the exact amount .
a 10 year fixed mortgage at 3.99% totals 46,450 8-9K interest.

6. The student finance seems a big risk in terms of the lack of fixed interest rate, no variable calculator to show the true costs, and lack of clear terms and conditions for a financial product. am I misunderstanding the product?


7. Is the student loan payment of 9% taken out of the income before tax or after tax. my understanding is that it is after tax which means in real terms it is more like 13% of the gross income is this correct?


8. I do not need all the condescending waffle about if you earn less you may never pay it off.
It does not take much to figure out that the priviledged will pay the 6+% loan off inside 10 years, a tiny minority will not pay it off, but for the middle 20-40k earners will be paying the' brilliant' 6+% loan at 9% of their net after tax income for 20-30 years. its basicaly a 13% tax on middle earners for most of their working life..Is this correct?

9. What is the legal position regarding inheritance tax if I take out a mortgage or use cash ISAS to pay my childrens University costs.?

10. One of my children is in University on the 3k fees with 1.5% interest on a total loan of 27k .the other will pay 9k fees
I want to be fair to each so I need to be able to calculate the exact costs under the new and old loan system.
my thinking is Iwill pay all my daughters costs over 27k at base+1.5% interest , but i find it impossIble to calculate the difference from the info you provide. assuming they will both earn over 41k can you provide the calculations for this?

11. The student loan company does not answer the phones?

12. Why do The student loan company use 0845 numbers which cost for uk students. and an 0141 number for foreIgn students? how much has all the waiting on the phones cost?



Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use isas. against the student loan

1 Tuition fee loan amount borrowed this year? £9000
2 Maintenance loan amount borrowed this year? £3750
3 Course Length? 3 Years
4 Expected starting salary on graduation? £27500
Estimated Results
First monthly repayment:
Monthly repayments will vary depending on your salary £41.33Repayment start date:April 2017Time to repay: 21yrs 0mthsTotal amount borrowed: £38,250Total amount repaid: £92,857
Estimated Future Repayments
£92,857 paid back over a 21 years period


Year Loan Amount Annual Repayment Annual Interest Rate
0 £43,525 £496 4.39%
1 £44,930 £946 5.04%
2 £46,226 £1,420 5.66%
3 £47,386 £1,846 6.16%
4 £48,408 £2,234 6.56%
5 £49,283 £2,694 6.6%
6 £49,761 £3,109 6.6%
7 £49,843 £3,493 6.6%
8 £49,535 £3,974 6.6%
9 £48,711 £4,303 6.6%
10 £47,495 £4,678 6.6%
11 £45,812 £4,976 6.6%
12 £43,710 £5,319 6.6%
13 £41,117 £5,654 6.6%
14 £38,008 £5,890 6.6%
15 £34,450 £6,229 6.6%
16 £30,309 £6,685 6.6%
17 £25,424 £7,034 6.6%
18 £19,858 £7,114 6.6%
19 £13,842 £7,486 6.6%
20 £7,046 £7,277 6.6%
Interest is included in the calculation above:

Retail Price
Index (RPI)3.6%+ interest rate based
on your salary0.79%=4.39%


Are there any clever people out there who can produce a calculator where the impact of variable RPI and extending the term for further education such as MA's or PHD's can be shown.

Is the main risk of not taking the loan that in a few years there will be such an outcry over the debt interest that the Government will be forced to do the right thing and back calc and reset the interest rate at the Bank of England base rate (.5%)

What a mess to pass on to the next generation.

devildog

DAISYDOG wrote: »

My conclusion is that unless the student is hopeless and never makes any decent money. the 6.6+ % interest rate is very expensive and risky.

This student loan has no clear terms and conditions and no way of getting detailed calcs to compare with other products.

Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use cash isas. against the student loan.

If the ISA interest rate increases the RPI will increase so the margin will remain.

the student loan company does not pick up the phones and do not have an e-mail even though
They have an obligation per section 6(c)of the The Electronic
Commerce (EC Directive) Regulations 2002 to list an email address.
This requirement is not optional.

I think these loans are the biggest misselling of a financial product ever. it is impossible to get accurate figures to compare .

My calc is 5275 pounds interest before starting to pay the loan off

As the student loan company have no emails,
Can anyone answer my questions for them below?


1. I want to compare with taking out a mortgage at a rate of 2.2-3%. or 3.9% fixed for 10 years.
What interest my daughter will I owe at the first student loan payment .
i.e after 4 years, Based on 6.6% .for £38,200 + what interest?

2. What does the info below mean if the loan is paid off early


Repayment Plan 2

The Government has consulted on whether early repayment charges may apply, and depending
on the outcome of that consultation and subject to Parliament, you may incur an early repay]ment
charge.

3. I want to compare if its cheaper for me to get a mortgage for 10 years at 2.2-3% or 3.9% fixed
or use my cash isas, or to take the student loan. How do i do this? If its going to be cheaper to get the money by loans from elsewhere I want to know and be able to calculate the difference.
Just like you can when you get a morgage.

4. where are the exact terms and conditions for this financial product.?
Is it misselling if I cant understand how much I will have to pay back in different scenarios. eg RPI was up to 24% in a year in the 1970s, ? What protection is built into the loan for rpi ? is there a maximum capped rpi rate? How is the interest calculated?

5. I have assume my daughter will earn the higher amount currently at 6.6%. I think she will pay back 60k over 9 years 20k interest? please confirm the exact amount .
a 10 year fixed mortgage at 3.99% totals 46,450 8-9K interest.

6. The student finance seems a big risk in terms of the lack of fixed interest rate, no variable calculator to show the true costs, and lack of clear terms and conditions for a financial product. am I misunderstanding the product?


7. Is the student loan payment of 9% taken out of the income before tax or after tax. my understanding is that it is after tax which means in real terms it is more like 13% of the gross income is this correct?


8. I do not need all the condescending waffle about if you earn less you may never pay it off.
It does not take much to figure out that the priviledged will pay the 6+% loan off inside 10 years, a tiny minority will not pay it off, but for the middle 20-40k earners will be paying the' brilliant' 6+% loan at 9% of their net after tax income for 20-30 years. its basicaly a 13% tax on middle earners for most of their working life..Is this correct?

9. What is the legal position regarding inheritance tax if I take out a mortgage or use cash ISAS to pay my childrens University costs.?

10. One of my children is in University on the 3k fees with 1.5% interest on a total loan of 27k .the other will pay 9k fees
I want to be fair to each so I need to be able to calculate the exact costs under the new and old loan system.
my thinking is Iwill pay all my daughters costs over 27k at base+1.5% interest , but i find it impossIble to calculate the difference from the info you provide. assuming they will both earn over 41k can you provide the calculations for this?

11. The student loan company does not answer the phones?

12. Why do The student loan company use 0845 numbers which cost for uk students. and an 0141 number for foreIgn students? how much has all the waiting on the phones cost?



Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use isas. against the student loan

1 Tuition fee loan amount borrowed this year? £9000
2 Maintenance loan amount borrowed this year? £3750
3 Course Length? 3 Years
4 Expected starting salary on graduation? £27500
Estimated Results
First monthly repayment:
Monthly repayments will vary depending on your salary £41.33Repayment start date:April 2017Time to repay: 21yrs 0mthsTotal amount borrowed: £38,250Total amount repaid: £92,857
Estimated Future Repayments
£92,857 paid back over a 21 years period


Year Loan Amount Annual Repayment Annual Interest Rate
0 £43,525 £496 4.39%
1 £44,930 £946 5.04%
2 £46,226 £1,420 5.66%
3 £47,386 £1,846 6.16%
4 £48,408 £2,234 6.56%
5 £49,283 £2,694 6.6%
6 £49,761 £3,109 6.6%
7 £49,843 £3,493 6.6%
8 £49,535 £3,974 6.6%
9 £48,711 £4,303 6.6%
10 £47,495 £4,678 6.6%
11 £45,812 £4,976 6.6%
12 £43,710 £5,319 6.6%
13 £41,117 £5,654 6.6%
14 £38,008 £5,890 6.6%
15 £34,450 £6,229 6.6%
16 £30,309 £6,685 6.6%
17 £25,424 £7,034 6.6%
18 £19,858 £7,114 6.6%
19 £13,842 £7,486 6.6%
20 £7,046 £7,277 6.6%
Interest is included in the calculation above:

Retail Price
Index (RPI)3.6%+ interest rate based
on your salary0.79%=4.39%


Are there any clever people out there who can produce a calculator where the impact of variable RPI and extending the term for further education such as MA's or PHD's can be shown.

Is the main risk of not taking the loan that in a few years there will be such an outcry over the debt interest that the Government will be forced to do the right thing and back calc and reset the interest rate at the Bank of England base rate (.5%)

What a mess to pass on to the next generation.

If you want to complain to them then send it here

[EMAIL="customer_complaints@slc.co.uk"]customer_complaints@slc.co.uk[/EMAIL]

re contacting them by phone you can use the 0141 phone number in the UK (0141 243 3030) and I will have to add that when I have had reason to phone them the phone has aways been answered fairly swiftly.

As for the rest of it....... pass

Ed-1

DAISYDOG wrote: »

My conclusion is that unless the student is hopeless and never makes any decent money. the 6.6+ % interest rate is very expensive and risky.

This student loan has no clear terms and conditions and no way of getting detailed calcs to compare with other products.

Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use cash isas. against the student loan.

If the ISA interest rate increases the RPI will increase so the margin will remain.

the student loan company does not pick up the phones and do not have an e-mail even though
They have an obligation per section 6(c)of the The Electronic
Commerce (EC Directive) Regulations 2002 to list an email address.
This requirement is not optional.

I think these loans are the biggest misselling of a financial product ever. it is impossible to get accurate figures to compare .

My calc is 5275 pounds interest before starting to pay the loan off

As the student loan company have no emails,
Can anyone answer my questions for them below?


1. I want to compare with taking out a mortgage at a rate of 2.2-3%. or 3.9% fixed for 10 years.
What interest my daughter will I owe at the first student loan payment .
i.e after 4 years, Based on 6.6% .for £38,200 + what interest?

2. What does the info below mean if the loan is paid off early


Repayment Plan 2

The Government has consulted on whether early repayment charges may apply, and depending
on the outcome of that consultation and subject to Parliament, you may incur an early repay]ment
charge.

3. I want to compare if its cheaper for me to get a mortgage for 10 years at 2.2-3% or 3.9% fixed
or use my cash isas, or to take the student loan. How do i do this? If its going to be cheaper to get the money by loans from elsewhere I want to know and be able to calculate the difference.
Just like you can when you get a morgage.

4. where are the exact terms and conditions for this financial product.?
Is it misselling if I cant understand how much I will have to pay back in different scenarios. eg RPI was up to 24% in a year in the 1970s, ? What protection is built into the loan for rpi ? is there a maximum capped rpi rate? How is the interest calculated?

5. I have assume my daughter will earn the higher amount currently at 6.6%. I think she will pay back 60k over 9 years 20k interest? please confirm the exact amount .
a 10 year fixed mortgage at 3.99% totals 46,450 8-9K interest.

6. The student finance seems a big risk in terms of the lack of fixed interest rate, no variable calculator to show the true costs, and lack of clear terms and conditions for a financial product. am I misunderstanding the product?


7. Is the student loan payment of 9% taken out of the income before tax or after tax. my understanding is that it is after tax which means in real terms it is more like 13% of the gross income is this correct?


8. I do not need all the condescending waffle about if you earn less you may never pay it off.
It does not take much to figure out that the priviledged will pay the 6+% loan off inside 10 years, a tiny minority will not pay it off, but for the middle 20-40k earners will be paying the' brilliant' 6+% loan at 9% of their net after tax income for 20-30 years. its basicaly a 13% tax on middle earners for most of their working life..Is this correct?

9. What is the legal position regarding inheritance tax if I take out a mortgage or use cash ISAS to pay my childrens University costs.?

10. One of my children is in University on the 3k fees with 1.5% interest on a total loan of 27k .the other will pay 9k fees
I want to be fair to each so I need to be able to calculate the exact costs under the new and old loan system.
my thinking is Iwill pay all my daughters costs over 27k at base+1.5% interest , but i find it impossIble to calculate the difference from the info you provide. assuming they will both earn over 41k can you provide the calculations for this?

11. The student loan company does not answer the phones?

12. Why do The student loan company use 0845 numbers which cost for uk students. and an 0141 number for foreIgn students? how much has all the waiting on the phones cost?



Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use isas. against the student loan

1 Tuition fee loan amount borrowed this year? £9000
2 Maintenance loan amount borrowed this year? £3750
3 Course Length? 3 Years
4 Expected starting salary on graduation? £27500
Estimated Results
First monthly repayment:
Monthly repayments will vary depending on your salary £41.33Repayment start date:April 2017Time to repay: 21yrs 0mthsTotal amount borrowed: £38,250Total amount repaid: £92,857
Estimated Future Repayments
£92,857 paid back over a 21 years period


Year Loan Amount Annual Repayment Annual Interest Rate
0 £43,525 £496 4.39%
1 £44,930 £946 5.04%
2 £46,226 £1,420 5.66%
3 £47,386 £1,846 6.16%
4 £48,408 £2,234 6.56%
5 £49,283 £2,694 6.6%
6 £49,761 £3,109 6.6%
7 £49,843 £3,493 6.6%
8 £49,535 £3,974 6.6%
9 £48,711 £4,303 6.6%
10 £47,495 £4,678 6.6%
11 £45,812 £4,976 6.6%
12 £43,710 £5,319 6.6%
13 £41,117 £5,654 6.6%
14 £38,008 £5,890 6.6%
15 £34,450 £6,229 6.6%
16 £30,309 £6,685 6.6%
17 £25,424 £7,034 6.6%
18 £19,858 £7,114 6.6%
19 £13,842 £7,486 6.6%
20 £7,046 £7,277 6.6%
Interest is included in the calculation above:

Retail Price
Index (RPI)3.6%+ interest rate based
on your salary0.79%=4.39%


Are there any clever people out there who can produce a calculator where the impact of variable RPI and extending the term for further education such as MA's or PHD's can be shown.

Is the main risk of not taking the loan that in a few years there will be such an outcry over the debt interest that the Government will be forced to do the right thing and back calc and reset the interest rate at the Bank of England base rate (.5%)

What a mess to pass on to the next generation.

I'll just point out a couple of things. One is that on the new student loans scheme, interest rates are capped at the prevailing market rates. So even if RPI ever takes off, if the prevailing market rates are lower, there is a cap (although not as low as base rate + 1% as on the old scheme).

As you say, it is impossible to predict exactly how much your children may repay as the system is so volatile, however for anyone but higher earners it may well be a cheaper scheme than the old one if current terms and conditions last throughout the whole 30 years (which is the risk). On the old scheme, you are making repayments above a lower threshold (currently 9% above £16365), meaning unless you pay it all back before 25 years (which is the write-off term on the old 3k loans) it could cost you more in the long run, regardless of the interest rate. The interest rates do not influence repayments at all, until you've ever repaid what you initially borrowed, which will prove extremely unlikely for the majority of people.

DAISYDOG

If we are positive about the future of the next generation we could assume that 90% of graduates could pay back the loan before the end of 30 years. The question is, is the SLC in effect charging middle england double the interest rate that they can get by borrowing money against their houses, or more than doulbe the interest rate they get on their ISA cash savings. The question then is , if this is a non=profit organization where does all the money go? The bank money lending charges include a profit of 20-30% The SLC calculations should not include any profit. Is it the case that the government through the SLC is admitting that in the future the value of a degree will not be reflected in pay and only a minority of graduates will pay back the money. If this is not the case wouldn't the SLC real costs be 20-30% below the current remortgage and interest rates of between 2.2 and 3%. It suggests that honest middle England is subsidizing an expanded university system against a contracting economy. If all the parents of students who can borrow the money elsewhere or use other sub inflation savings then the SLC will fail. If we go back to Martin's example using a cake, if I assume my children will get good jobs why should they borrow money at 6.6%, currently at least 3.6% above the rate I can borrow money at? If I borrow the money and my children do reasonably well in their working lives they will pay the 6.6% variable loan off over 10 years. This will cost them 20k more than if I borrow the money. If my children don't do particularly well and pay the loan off over 29 years and 10 months they will have to pay £124k having borrowed £38k -- a cost of about £40k against cash ISA predictions. Can Martin explain why I should take a large slice of cake from the SLC when I can take less than half of that slice of cake from my offset mortgage from First Direct.

The more I look into this the more I conclude that this is a government led disgace and very divisive for the future of society. The wealthy will avoid taking out money from the SLC. As with any other government scheme many will evade and avoid paying the money back. Honest middle England will be paying for all of this and the guaranteed inefficiencies of a massive student loan organisation/ government quango.

DAISYDOG

Based on my research this is my solution.
Im going to do a deal with my daughter.
I will pay the student loans by borrowing at 2.9%, or by using my below inflation cash ISAs.

This will save the family about 30k 2.9% against the interest on the borrowing 6.6% *over 21 years repayments
or 52k if i use ISA money.

When she starts work she will put 9% of her income in a cash ISA
if we assume a 3% interest for 30 years she will save somthing like 140k, based on £400 a month for 21 years.

Thats a tax free gain of 170-190k after 21 years over being on 0 after 21 years of the SLC system

the SLC payments scale from 1800 yr to 7000 so its too hard for me to work out exactly.

My son is in Uni now on the 3k year system bank base +1.5%, so the ISAs should just beat the loan , I will work out a similar system for him so he uses his ISA tax allowance.

like many I was way too poor 25 years ago when I left Polytechnic, with 2.5K debt after 5 years education part of which was in he USA. . The Government may think its OK to run the country based on debt.
Im 100% sure their sums are wrong.
They are moving the deckchairs on the Titanic while the ship is sinking.



:j

Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use isas. against the student loan

1 Tuition fee loan amount borrowed this year? £9000
2 Maintenance loan amount borrowed this year? £3750
3 Course Length? 3 Years
4 Expected starting salary on graduation? £27500
Estimated Results
First monthly repayment:
Monthly repayments will vary depending on your salary £41.33Repayment start datepril 2017Time to repay: 21yrs 0mthsTotal amount borrowed: £38,250Total amount repaid: £92,857
Estimated Future Repayments
£92,857 paid back over a 21 years period

Lokolo

DAISYDOG wrote: »

Based on my research this is my solution.
Im going to do a deal with my daughter.
I will pay the student loans by borrowing at 2.9%, or by using my below inflation cash ISAs.

This will save the family about 30k 2.9% against the interest on the borrowing 6.6% *over 21 years repayments
or 52k if i use ISA money.

When she starts work she will put 9% of her income in a cash ISA
if we assume a 3% interest for 30 years she will save somthing like 140k, based on £400 a month for 21 years.

Thats a tax free gain of 170-190k after 21 years over being on 0 after 21 years of the SLC system

the SLC payments scale from 1800 yr to 7000 so its too hard for me to work out exactly.

My son is in Uni now on the 3k year system bank base +1.5%, so the ISAs should just beat the loan , I will work out a similar system for him so he uses his ISA tax allowance.

like many I was way too poor 25 years ago when I left Polytechnic, with 2.5K debt after 5 years education part of which was in he USA. . The Government may think its OK to run the country based on debt.
Im 100% sure their sums are wrong.
They are moving the deckchairs on the Titanic while the ship is sinking.



:j

Using the uk gov Student Loans Repayment Calculator
The interest is 52500 on a 38250 loan

38000 of cash isas on 2.5% will be £64,244.01
so it saves 30k to use isas. against the student loan

1 Tuition fee loan amount borrowed this year? £9000
2 Maintenance loan amount borrowed this year? £3750
3 Course Length? 3 Years
4 Expected starting salary on graduation? £27500
Estimated Results
First monthly repayment:
Monthly repayments will vary depending on your salary £41.33Repayment start datepril 2017Time to repay: 21yrs 0mthsTotal amount borrowed: £38,250Total amount repaid: £92,857
Estimated Future Repayments
£92,857 paid back over a 21 years period

You really should learn how to layout your posts better. They are extremely difficult to read.

As for the plan, it's a pretty terrible one!

So 9% of her income, I assume this is 9% above £21k (raising with RPI each year) as it is with Student Loan. What happens if she doesn't get a job above this amount?

You expect your daughter to save £400 a month!?! In student loan repayments she would have to be earning £74,333 before she would be paying that much.

And how will you force this on your daughter anyway??

DAISYDOG

Its a complex issue trying to quantify risk.
Average starting pay from her course at the University she hopefully will get the grades for is £27500 pounds, This is what I have used as the base

400 per month is the SLC payment at about year 10
you could do the calc investing £496 in the isa in the first year and £7277 in the last year, but as i stated its hard , my guess is that on 3% it would be about 140k after 21 years.

Its no different from the SLC contract and the money would be hers not theirs.
worst case senario is she does nothing for 21 years and I waste £38,200
Best case senario is that after 21 years she has a 170k gain over anyone who takes out the loan and has an average job.

Its a Gamble

-£38200 against +£170,000

I trust my kids, It looks like good odds to me.

If the SLC loan was at 3% and was capped at say 4.5% I would not have a problem.

I would never borrow money at 6.6% variable with no upper limit

The RPI over the last 50 years averaged 9.93%
The RPI over the last 30 years averaged 7.45%

If the RPI increases the interest on savings will increase and the gap between the SLC and self funding and then saving widens.

The case for the SLC does not get any better

DAISYDOG

The direct.gov.uk/ student loan repayment calculator gives a totaly different result to the MSE one, when you input the same data. as below

1 Tuition fee loan amount borrowed this year £9000
2 Maintenance loan amount borrowed this year £3750
3 Course Length 3 Years
4 Expected starting salary on graduation £22000

GOVERNMENT ONE(undisclosed adjustments)

Repayment start date:April 2017 Time to repay: 29yrs 10mths
Total amount borrowed: £38,250
Total amount repaid: £124,21

MSE ONE (default settings)
Total amount borrowed: £38,250
Total amount repaid £25,750

It looks like the government is going to retain the ability to manipulate the variables such as the 21k base , without stating how it is to be done over the term of the loan.


There is £100,000 difference between the two calculators which is correct?

How will anyone check that the payments taken are correct if the variables are not defined?

tyllwyd

DAISYDOG wrote: »

.... It looks like the government is going to retain the ability to manipulate the variables such as the 21k base , without stating how it is to be done over the term of the loan. ...

How will anyone check that the payments taken are correct if the variables are not defined?

From that point of view, you have to think of it in the same way as tax repayments - over 30 years, you wouldn't expect the tax thresholds or the rate of tax to stay the same, so you have to calculate the tax owed each year as you go along.