Student Loan interest rate?

phlash

b33r wrote: »

True but you HAVE to earn 15k before you pay anything back and even then it would be hardly anything. I know it may be changing soon but considering student loans are in-line with inflation I don't really consider it a debt.

Some countries higher education is free (sweden i think?? not sure) but then taxes are higher to compensate, it's swings and round-a-bouts really.

Plus why not start life with a debt, most ppl will have to manage it for the rest of their lives. One of the reasons HSBC are giving for their overdraft charge they are bringing in is that "the sooner people realise money isn't free the better" - Not that I agree with them mind and I think they are making a massive mistake, but I see their point.

I take it you mean "but I see their excuse"!!

House_seller_2008

b33r wrote: »

True but you HAVE to earn 15k before you pay anything back......

Is it really worth going to University to aim to earn £15K per annum? Why not get a job at Tesco's and do a few extra hours? If you are clever, you might get a break there. The £15K limit before the loan is paid back should be much higher, say £30K. This will mean that it is only those people who profit from their time at University who have to pay.

The_One_Who

House_seller_2008 wrote: »

Is it really worth going to University to aim to earn £15K per annum? Why not get a job at Tesco's and do a few extra hours? If you are clever, you might get a break there. The £15K limit before the loan is paid back should be much higher, say £30K. This will mean that it is only those people who profit from their time at University who have to pay.

I disagree. You only pay back 9% of what you earn over £15,000. So if you earn £20,000 you'll pay back 9% of £5,000. It's perfectly fair. You have chosen to go to university, it was not forced on you. Nor were you forced to take out the loan.

CLAPTON

House_seller_2008 wrote: »

Is it really worth going to University to aim to earn £15K per annum? Why not get a job at Tesco's and do a few extra hours? If you are clever, you might get a break there. The £15K limit before the loan is paid back should be much higher, say £30K. This will mean that it is only those people who profit from their time at University who have to pay.

It would seem to me that the logic of your argument is for reducing the 15,000 minimum and not increasing it. ...
What the point of tax payers spending lots of money for pointless degrees.

RocketMan

I dont view the loan as a debt seeing as it is billed at RPI, maybe average the RPI across the year might be a little better.

My courses at Uni have helped me get into the carreer I wanted, going to be making the first re-payment soon and 9% above 15,000 is not going to be that much compared to tax + national insurance. My wife however is finding it hard to get the job she wants, and now thinks the time would have been better spent working to get experience.

House_seller_2008

People are currently being sucked into University expecting a good job at the end, but there are not enough well paid jobs to go round. Just about everybody now is encouraged, if not pushed, to go to University. New graduates will often go into new jobs to find that non graduates have already got a head start. They do not have to pay back a loan, will have been gaining valuable experience and will have been earning while the student was borrowing.

There are too many students, but it keeps people off the dole queues. It is clear that not everybody is going to benefit from their own hard work and sacrifice.

£15K earnings equates to working a 50 hour week at minimum wage, less if overtime rate is applied. You don't have to go to University to earn that sort of money. Paying back even a small amount at a low rate of interest puts you at a disadvantage to the non graduate shelf stacker working in the same aisle.

jem609

The_One_Who wrote: »

I disagree. You only pay back 9% of what you earn over £15,000. So if you earn £20,000 you'll pay back 9% of £5,000. It's perfectly fair. You have chosen to go to university, it was not forced on you. Nor were you forced to take out the loan.

Yes, the 9% payback is fair.
However THE INTERST RATE IS NOT!!!
A 15,000 loan is £50 a month interest alone!
Thats £600 a year interest and if it took 10 years to pay off, that £6,000 in interest.
Something should be done, if the government want more doctors, teachers, etc then they should at least end the interest rate!!!

Lokolo

jem609 wrote: »

Yes, the 9% payback is fair.
However THE INTERST RATE IS NOT!!!
A 15,000 loan is £50 a month interest alone!
Thats £600 a year interest and if it took 10 years to pay off, that £6,000 in interest.
Something should be done, if the government want more doctors, teachers, etc then they should at least end the interest rate!!!

How is the interest rate not fair? Interest rate is set to inflation, which means in real terms means there is a 0% interest rate.

Before saying such stupid things try and learn something about how the economy works.

The_One_Who

jem609 wrote: »

Yes, the 9% payback is fair.
However THE INTERST RATE IS NOT!!!
A 15,000 loan is £50 a month interest alone!
Thats £600 a year interest and if it took 10 years to pay off, that £6,000 in interest.
Something should be done, if the government want more doctors, teachers, etc then they should at least end the interest rate!!!

Would you rather it be a commercial loan? With higher interest rates and no delaying the pay-back even if you aren't working? Why end the interest rate?! They'd not make any money out of it to give back to future students? In every loan you will always pay back more than you took out, it's a fact of life.

kelloggs36

Trouble is, whilst I am a graduate teacher who earns 20k this year, from April I will be paying about £45 per month towards my student loan, which is accruing interest at £56 per month - so it won't get paid off and I am getting further and further into debt which worries me greatly! Whilst I have no intention of paying off more than the minimum because there is no point, it still means that there is a chance that I end up paying back so much more than I borrowed and actually never pay it back!