Starting PGCE on new finance system, what happens to existing debt?

sjmon

I have three years of student loans already racked up (to the tune of about £20000) on the old system, paid back at ?% over earnings of £15000.

If I start a PGCE for £9000 paid back on the new system:

1. Is my existing debt transfered to the new system?
2. Or is the new debt placed on my old system?
3. MOST IMPORTANTLY, do I pay back for student loans TWICE?! i.e. 9% over 21000 and whatever % i'm paying back over £15000 for my undergraduate degree. That would be terrible.

All these finance things are putting me off doing something I think would be a very positive move in my life and hopefully, the lives of many children.

Many thanks.

poet123

I don't think PGCE fees are £9,000 more like £3,200 and then, subject dependent, there is a bursary payable.

sjmon

Thanks for the reply. Unfortunately, the PGCEs I am looking at do cost £9000 though I am eligible for a bursary.

Depending on the answers to my above questions however, I will not be in a hurry to pay off the loan with my bursary as I could essentially be better off. I hope that makes sense.

Poolie

sjmon wrote: »

I have three years of student loans already racked up (to the tune of about £20000) on the old system, paid back at ?% over earnings of £15000.

If I start a PGCE for £9000 paid back on the new system:

1. Is my existing debt transfered to the new system?
2. Or is the new debt placed on my old system?
3. MOST IMPORTANTLY, do I pay back for student loans TWICE?! i.e. 9% over 21000 and whatever % i'm paying back over £15000 for my undergraduate degree. That would be terrible.

All these finance things are putting me off doing something I think would be a very positive move in my life and hopefully, the lives of many children.

Many thanks.

At the moment you are paying 9% above £15,795 (£1316.25 per month).

If you start a PGCE then you should declare you previous student loan number so you account can be joined up.

As you will be in full time education then you would not be earning enough to make repayments therefore you would not be expected to make any.

Once you have completed your course, the total loan will be repayable under the original schemes. The threshold for your old loans is rising up to £21000 by April 2016 anyway. a PGCE is a one year course so the repayment threshold will be around £16k the time you re-enter repayment. Therefore your deductions would be 9% of £16k (inflation depending) and split across all the loans you have.

Doing the PGCE you will be extending the length of your current loans and the interest that will be charged on these.

poet123

sjmon wrote: »

Thanks for the reply. Unfortunately, the PGCEs I am looking at do cost £9000 though I am eligible for a bursary.

Depending on the answers to my above questions however, I will not be in a hurry to pay off the loan with my bursary as I could essentially be better off. I hope that makes sense.

Is it costing so much because of location? The PGCE providers local to me are not levying fees of that amount, so would you consider moving?

As far as I am aware your loans exist under the system which was operative at the time you first applied, so your existing loans are at the rate you contracted to then and the same will apply to your PGCE funding,

mynameistallulah

poet123 wrote: »

Is it costing so much because of location? The PGCE providers local to me are not levying fees of that amount, so would you consider moving?

As far as I am aware your loans exist under the system which was operative at the time you first applied, so your existing loans are at the rate you contracted to then and the same will apply to your PGCE funding,

£9,000 is pretty standard for the PGCE - can you advise where is cheaper please?

sjmon

I am under the impression that the cost for a PGCE is a fixed cost across the UK and I didn't think there were any universities that offer the course for less than £9000. I would definitely be willing to move if you can show me which universities offer it for less.

poet123

My apologies, when I googled my local provider it showed fees of £3200 for 2012, but when I looked further those courses running into 2013 were £9000. It is such a huge increase, I sympathise with you.

ultimatedingbat

The amounts are added to your old fees adn repayable at 16k.

zweiblumen

Hi all,

I found this thread very helpful, it is incredibly difficult to get information on what happens to people with existing income-contingent loans who start a new course on or after September 2012. PGCE websites just refer to Student Finance England, which is worse than useless.

Am I to understand that all conditions of the old-style loans apply to the additional loan? i.e. lower payment threshold, lower interest rate and 30-year expiry? I was sorely tempted to use my PGCE bursary to pay the fees upfront, but if I dodge the RPI+3% interest rate anyway, I'll take the loan. (I plan to be a high-flyer and pay it off in full at some point in the next 2 decades)

Thanks.

Poolie

Your PGCE loan would be under the new terms and conditions which you sign so you would liable for the RPI+3% interest rate.

Your old-style loan will be deferred as you have continued to study.

Previously, as not sure the rules are still the same, when your PGCE loan enters repayment, you would be given the choice to defer the old-style loan or the PGCE loan. The loan deferred would continue to have interest applied and the repayments would transfer to the second loan once the first is repaid.