Student Loans are crippling me!!

Fweckles

Hi All
Looking for some advice on student loans, as mine are crippling me. I graduated 5 years ago and have been paying them directly from my wages monthly ever since... They are obviously linked to my wages, so the more I earn the more I pay... everytime I get a much needed reward bonus from my bosses - it gets hit big time with the student loans repayments. Is there anyway I can reduce down the amount I pay each month... any advice is welcome... thanks in advance Fweckles

tom188

If it is a new style loan (not mortgage style then no) it is 10% on your earnings above 15000 and collected by PAYE. It is not negotiable - if your pay goes up you will still be earning more,even though you pay more to the SLC. If you are struggling it suggests that you are living beyond your means and need to cut expenditure.

keeperbear

Fweckles wrote:

They are obviously linked to my wages, so the more I earn the more I pay... everytime I get a much needed reward bonus from my bosses - it gets hit big time with the student loans repayments.

You got the job because of your education, so your student loans are certainly linked to your wage. No education = No job = No student loans. You can't have it all ways. I am happy to pay for my education as it enhanced my earnings.

As the other poster said, if you cannot afford you student loan repayments you are spending too much.

wacko911

I too am paying back student loan, not that I graduated or that im on a big wage.

I am working tons of overtime to try and save for a house and getting married, only to have 22% Income Tax, 11% NI and then 9% Student loans taken from the overtime.

THATS 42% out of my overtime!!

People paying 40% tax dont even pay that much every month as the NI is capped when the 40% kicks in. Its a real kick in the teeth.

Dont get me worng, I agree someone has to pay for education, and I agree it should be those who benifit by getting higher paid jobs and then paying back thier loan, however I dont agree with factory workers, working long hours and getting buttons, all cus they tried to get a decent education but never succeeded.

The £15K threshold is far to low IMHO, 25K would be more realistic.

And I've now gone back to uni to hopefully finish my degree (with the OU) and i'm still forking out for loans on top off all the OU fees.

Feanor

I disagree with some of the previous posters, saying if you cant afford your student loan then you are living beyong your means!!??

My boyfriend graduated two years before me, so hes on the 'old system' whereas i graduated last year one the 'new system' and the difference is quite alot. I pay £11 a month, which is great, i hardly notice it. I thought this is how the system should be, pay it back slowly so you dont really notice it. Now, my boyfriend does earn double what i do, and he pays £137 a month in student loans!!! Its rediculous really. Neither of us begrudge paying it back as it has indeed helped us get good jobs, but the whole £137 a month is crazy and he still wont have it paid off for another 8/9 years i shouldn't think. (so he'll be nearly about 38).

I can sympathise with the poster as sometimes the system is a little confusing and if your on the old system its even worse, AND i think where you live should be taken into account. We moved to London just to get jobs, so the different is even more. Its alot to pay out of your salary for sure if your on the old system.

Sarah.

Feanor

I disagree with some of the previous posters, saying if you cant afford your student loan then you are living beyong your means!!??

My boyfriend graduated two years before me, so hes on the 'old system' whereas i graduated last year one the 'new system' and the difference is quite alot. I pay £11 a month, which is great, i hardly notice it. I thought this is how the system should be, pay it back slowly so you dont really notice it. Now, my boyfriend does earn double what i do, and he pays £137 a month in student loans!!! Its rediculous really. Neither of us begrudge paying it back as it has indeed helped us get good jobs, but the whole £137 a month is crazy and he still wont have it paid off for another 8/9 years i shouldn't think. (so he'll be nearly about 38).

I can sympathise with the poster as sometimes the system is a little confusing and if your on the old system its even worse, AND i think where you live should be taken into account. We moved to London just to get jobs, so the different is even more. Its alot to pay out of your salary for sure if your on the old system.

Sarah.

robindunne1

Take this into consideration. Student loan repayments are not an allowable deduction for tax credits either. For every hundred pounds I get in wage increases I loose the following:

£22 Tax
£11 National Insurance
£37 Tax Credits
£6.50 Pension Contributions
£10 Student Loan repayments

So I will receive only 13.5% of any wage increase due to loss in tax credits and increase in tax, NI and Student loan repayments.

This Labour government is a joke. Award people for hard work?

They penalise people for going to university by taxing higher to pay for "Mickey Mouse" degress so they can blow there trumpet that so many people are going to university. All this does is undervalue higher education, put people in debt and make earning a high salary a non achievement as lower earners will have their earning subsidised through tax credits.

Higher education should be scaled down to bring back its prestige and more important of all be free.

Rafter

Guess that is tough - but at least you are paying your loan off sooner if you are getting lots of bonus yeah?

Just wait till you are paying tax at 40% (the current 18% penalty on top of basic rate for working hard) then your bonus really does get a huge bite out of it.

Perhaps there is a case for a flat rate income tax after all.

R.

Dead_Eye_Jones

In the new system, are you able to overpay? I missed out on fees (bah making me too close to 30!) and was able to pay off as much as I liked over and above the fixed amount - I remember it was about £100 a month for me - for 5yrs. I paid it off in 2 by saving and working hard, and continued to do so to enable me to get my house.

I have also only ever considered my net wage. I dont really think of myself as earning my gross wage, or look at gross pay rises. Only ever net, maybe thats why I dont really notice tax lol!

As a tax payer, Id be happy to pay student's fees, but only for those who are suited and take it seriously. Us graduates well know how some treat the whole uni experience as a big party.

Feanor

I think you can make overpayments, in lump sums. I dont think you can call them and say you want to up what you pay from your salary every month, i think it can be one off payments though.

ab7167

I do agree that if you can't pay back you are living beyond your means. I graduated in 2001 with 4 years of loans (old system). I was earning about £100 over the then threashold (about £20k - I think it is £24k at the moment)and was hit with the full repayments of £126 per month - non-negotiable. Out of a salary of around £1280 take home, this was 10% of my full salary (not just the bit over £15k) - and my boyfriend and I managed. We were both working in London, paying London rents - you just have to cut back. This meant living in some grotty hell holes, and one night out each a month until we finally started to earn a bit more. In fact, I paid mine off last month and it has always been THE major outgoing every month. We have had to drive banger cars (after we moved out of London - no car at all while living there), holiday on the cheap and limit our socialising.

I don't want to sounds critical, but if you went to university, surely you knew you were going to have to pay it back at some point? And I do think that the current system is reasonable fair (but I don't know all the details).

Ali