MSE News: Student loan interest rate could fall for hundreds of thousands

Lokolo

setmefree2 wrote: »

I don't really understand why the government feel the need to charge such a high rate of interest whilst students are studying??? They must want to deter students from going to uni or they are trying to tempt parents to pay up front???

I think it's to try deter people from using their loans to save, earn the interest, and pay back the loan after they finish.

But frankly it's still disgusting that it's RPI+3% during study.

p.mckinlay

Does anyone know whether this is just for England, is the loan system different in Scotland? My daughter will be starting university in autumn 2013.

Poolie

setmefree2 wrote: »

Well how about a few facts please:D

Are the thresholds rising with inflation or not?

If the thresholds are not rising how (seriously) does ths impact the MSE student loan calculator?

The threshold for repayment between April 2012 and April 2015 will rise by March before the beginning of the previous tax year each year. So the threshold will rise by 3.6% (RPI Today!) on April 2013.

What happens from 2015 there are notes in the regulations at this stage.

Poolie

MSE_Dan wrote: »

Hiya,

We have re-checked this info with Department for Business (whose policy this is) and the info in our article is right. From 2012, every new student will start repaying from earnings of £21,000, and that threshold will rise with inflation from 2017.

Many Thanks

Dan

Dan,

The threshold is already rising year on year for those in repayment to get it up to the £21,000 limit for 2016. The threshold from April 2012 is £15795 and from April 2013 approx £16365 as defined in the The Education (Student Loans) (Repayment) (Amendment) Regulations 2011 (http://www.legislation.gov.uk/uksi/2011/784/regulation/6/made)

Poolie

p.mckinlay wrote: »

Does anyone know whether this is just for England, is the loan system different in Scotland? My daughter will be starting university in autumn 2013.

The system is for England only as loans for Scottish students are handled by SAAS who use different regulations for creating the loans.

animalhouse

I think they just don't want the hoi polloi to go to uni....

stedwell

Given the low interest rates at the moment anyone whose parents can are in a position to lend them the money, give them the money or even re-mortgage on a fixed rate to fund it would help their children avoid a huge debt.[/QUOTE]

That is a big ask when you consider 9k a year tuition fees and 6k rent for halls. 15k a year is well out of reach for many parents. I think any parent would want to say yes but what if you have 2 or even 3 children going?

piggeh

It's a big shame they closed the loophole where student loans were written off if someone went bankrupt.

setmefree2

stedwell wrote: »

That is a big ask when you consider 9k a year tuition fees and 6k rent for halls. 15k a year is well out of reach for many parents. I think any parent would want to say yes but what if you have 2 or even 3 children going?

Even if parents can afford to pay upfront it doesn't necessarily mean they should. Link http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

Former_MSE_Dan

Poolie wrote: »

Dan,

The threshold is already rising year on year for those in repayment to get it up to the £21,000 limit for 2016. The threshold from April 2012 is £15795 and from April 2013 approx £16365 as defined in the The Education (Student Loans) (Repayment) (Amendment) Regulations 2011 (http://www.legislation.gov.uk/uksi/2011/784/regulation/6/made)

Yep exactly. It gets confusing now though as there are effectively 3 systems (pre-98, 98-2011 and 2012 onwards) with 3 salary thresholds, which could all change in different ways.

Plus it would actually take consistent inflation of over 7% to get the current threshold to meet the 2012 one by the year 2016. Will be interesting!