What happens if you have a student loan under the new and old system?

tom717

I have done a degree and have debt of about £24000.
This year I want to do a teacher training course, which will cost £9000.
If I take out another student loan, what will happen to my repayments?

For example, if I earn 25k

Repay 9% of earnings over £15,000 on first debt = £900 pa
Repay 9% of earnings over £21,000 on 2nd debt = £360 pa

Are these added together, and I will be repaying both debts off separately, or will I just pay the first (£900).

If the latter, how does that affect the interest on my debt, as the rates are different? Will my repayments be spread proportionately between them or will I have to pay off the £24000 before I start on the £9000?

Poolie

What year did you take our last student loan for your previous degree?

If you take out a new loan and are a post 1998 student then the total amount would be lumped together and you would be expected to pay 9% of the total due. There is not two different threshold as you think.

At present until April 2012, the threshold is £15,000. This will rise from April 2012 until April 2013 to £15,795 pa. The threshold is going to rise each year with inflation until April 2016 when it will be set at £21k.

Your repayments will be split across all your student loans equally internally by SLC but you would receive one statement if they match your records together (which they should based on name, date of birth and you providing the previous student loan support number or art id).

At present, I do not have any additional information into how the different interest rates will affect people like you. All I know is they will be applied to your account as usual.

msbos73

Hi I'm in the same position - except my first loans were pre-1998 and I've been deferring since then - how will they work out my repayment if I borrow 9k to finance PGCE course?

Oldernotwiser

msbos73 wrote: »

Hi I'm in the same position - except my first loans were pre-1998 and I've been deferring since then - how will they work out my repayment if I borrow 9k to finance PGCE course?

I've only had time to skim read these but I think they answer your question.

http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678629&_dad=portal&_schema=PORTAL

http://www.studentloanrepayment.co.uk/pls/portal/docs/PAGE/RPIPG001/RPIPS001/RPIPS006/PPC%20004%20REPAYING%20YOUR%20STUDENT%20LOAN.PDF

Pursey

Hi not sure if this helps, but I have been paying off both pre1998 and post 1998 loans for the last 5 years as I earn over the threshold for the pre1998 loans. I was able to defer in the first few years as I was earning less, but once I earned over the threshold they started taking it back.

I believe that if I was to do a PGCE now the post 1998 and PGCE loan would be lumped together.

tom717

Poolie wrote: »

What year did you take our last student loan for your previous degree?

I started 2007 and finished in 2011.

Poolie wrote: »

At present until April 2012, the threshold is £15,000. This will rise from April 2012 until April 2013 to £15,795 pa. The threshold is going to rise each year with inflation until April 2016 when it will be set at £21k.

So when the threshold increases it is for everyone? That makes more sense, I thought it depended on when you took the loan out.

(Sorry for late reply, had some trouble with my internet connection)

Poolie

Correct the threshold will increase for everyone across the board. A lot of people will not realise but it will have the effect of extending the loan term as the principle repayment amount will drop which is one reason why I will be overpaying the difference between what is taken from my salary now and what will be taken in April.

tyllwyd

Is it correct that the threshold will be set at £21 for everyone in 2016? From Martin's blog (from August so things may have moved on since then), I had the impression there would still be a difference between the two, although not as much as a £6K difference.

http://blog.moneysavingexpert.com/2011/08/15/students-%E2%80%93-lower-earners-deferring-to-2012-could-pay-less/

Poolie

tyllwyd wrote: »

Is it correct that the threshold will be set at £21 for everyone in 2016? From Martin's blog (from August so things may have moved on since then), I had the impression there would still be a difference between the two, although not as much as a £6K difference.

http://blog.moneysavingexpert.com/2011/08/15/students-%E2%80%93-lower-earners-deferring-to-2012-could-pay-less/

The regulations current state the threshold will rise by inflation each year until April 2015. From then it states the threshold will be the same as the previous year so it will either stay the same or rise by inflation again. I think the £21K threshold is a guess on what inflation will do.