Quarter of a million pound debt in 30 years?

richardlister

is this right?
£9,000 loan per year plus £5,000 living = £14k x 3 = £42k. Say if never earned above £21k the interest would be RPI plus 3%, compounded over 30 years on £42k = £241,000!!! .......
and I have twins!
It can't be right can it?
regards,
Richard

Taiko

In 30 years, the debt would be £0. Not £241,000.

setmefree2

richardlister wrote: »

is this right?

No:)

richardlister wrote: »

£9,000 loan per year plus £5,000 living = £14k x 3 = £42k.

True.

richardlister wrote: »

Say if never earned above £21k the interest would be RPI plus 3%,

If a graduate never earned above £21k the interest would just be RPI. At the end of 30 years the compounded amount borrowed would be written off (under current rules)

richardlister wrote: »

compounded over 30 years on £42k = £241,000!!! .......

The compounded amount depends on RPI over 30 years and how much a graduate earns... but £241,000 is certainly well within the possible range.

richardlister wrote: »

and I have twins!

Congrats!

richardlister wrote: »

It can't be right can it?
regards,
Richard

See above:)

regards,

sermefree2