Student Loan - should I take it?

Catseyez

Hi,

I'm currently in the first year of a three year degree course. For the first year, I have done the following:
Taken out a tuition fee loan of £3k but put £3k of my bursary/savings into a mini ISA.
I have also taken out my 0% student O/D and put that into a fixed bond. I won't need to repay this until a year after graduation.
I did not take out any of the student loan.

For the second year, I'll be putting another £3k into a mini ISA and taking out a tuition fee loan to pay for the £3k fees.
The bond will stay as it is.

What I am wondering, is whether it is worth taking out the full student loan (about £5k I think) and putting it in a high interest account? As the interest will be lower than if it were in an ISA, is it really worth the bother, espeically as the student loan will have interest added to it as soon as it's in my account (although at a very low rate)?

My intention has always been to pay back my loan/s in one lump sum as soon as I start earning (the salary at which student loans need to be repaid).

Any advice would be appreciated.

joolz3

I went to uni a while ago now, I took out the full loan amount each year and put it in a high interest, but instant access account (just in case) I didn't need use it while at uni but used most of it as a deposit on my house. I still don't earn enough to have to pay it back, but have a nice house! I would say take out all the loan you can and put it in a high interest account, you will get more interest than you will pay on it, I wouldn't pay it back untill you need to-I think Martin has an article with advice on this.

Gemmadm

Hi its a good idea but just make sure that you don't spend it. Try and put it into an account where you cannot get easy access. I think the interest on student loans is around 2% (correct me if i'm wrong) and you can get around 6% on accounts now (i think abbey might have one for 8%) so you can make some money out of it.
Gemxx

nifferwilko

Gemmadm wrote: »

I think the interest on student loans is around 2% (correct me if i'm wrong)

Last notice I got from the Student Loans Company was that the rate was going up to 3.2% September 2005 (although I'm sure the rate of inflation was lower than this at this time) so still a lot lower than most savings rates

tabitha200_2

Hi
Does anyone know anything about old style student loans? I have two loans taken out in 1996 and 1997 which I have not started to repay as I went back to Uni and have not yeat earnt over the threshold. Is it true that the loans are cancelled after ten years of deferment? Any advice would be gratefully received! Thanks, Nina

Fizog

At a aim higher talk for my year 12 student last month I was informed the loans are cancelled after 25 years!

tabitha200_2

Thanks for your reply - I thought the old style loans were different, but I may well be wrong! Does anyone else know if this is the case?

IFA

When I took out a student loan in 93-96 it was 15 yrs then you don't have to pay it back