Outlook on Student Loans?

Puddylove

I consider mine a debt.
Oddly, I've earned over the threshold for years but they ignored me!
Then...in Dec 13 they sent me a letter, and in Jan started taking more than £200 from my pay.
I only owe £4k but will be glad to see the back of it.

NinjaSavingKat

Idiophreak wrote: »

I'm not sure I count the student loan as debt by a normal definition. It has no fixed repayment schedule, it's got no known total amount payable, it's taken from your pay and the amount you pay in the first place is not related to how many of the facilities you use. And the more you earn, the more you pay.

All of that said, it's far more akin to an additional tax than it is a loan.

I understand the interest rate might not put a student lone alongside "other" debts per se - but my idea of being debt free is having no debts. This means not owing money to any institution whether a bank or a student loan company. Whether they are very low percentage interest rate or not someone else is taking your money each month... That is a debt whichever way you look at it. The attitude that some things count and others don't is possibly why some people are in such massive amounts of debt in the first place.

However due to the low percentage, if mine had not run out when it did there is posisbly no way I would have started to re-pay it over and above what they were already taking ( sometimes £290 a month ) - but this year when I go travelling for a few years I know I have no nasty surprises to come back to when I do and can leave with no financial ties to the UK whatsoever. Depends on your outlook probably...

That being said a mortgage is an unavoidable debt.

thecassman86

NinjaSavingKat wrote: »

I understand the interest rate might not put a student lone alongside "other" debts per se - but my idea of being debt free is having no debts. This means not owing money to any institution whether a bank or a student loan company. Whether they are very low percentage interest rate or not someone else is taking your money each month... That is a debt whichever way you look at it. The attitude that some things count and others don't is possibly why some people are in such massive amounts of debt in the first place.

I don't think anybody is suggesting that it's "not a debt", i think the general consensus seems to be that it's "a different debt" in that there's little to no point in paying extra or clearing it using another form of credit. I know i owe the SLC money, i'm not ignoring it in that regard, but i just see no benefit in thinking about it and finding new ways to pay it off... That's where it differs from my other debts for which I often think of new ways to pay extra.

vics199

I just let mine sit there and couldn't even tell you how much I still owe to be honest! I expect there will be another yearly statement out soon though. I know its there obviously as I pay about £90 a month to it but I only know that from reading my payslips. Whereas my other debts I know exactly what I owe and focus on those. Like others have said, if you don't earn over the threshold one month then you don't have to pay it, so it only sort-of exists when you are earning over £15,000. I'm moving abroad later in the year to live and then I won't be paying a single penny to it unless I return to the UK in the next 5-6 years else I believe they write it off if you no longer live in the UK as they don't chase you abroad.


Definitely don't pay it off unless you really can afford to eg if you already have a deposit for a mortgage as the money would be better saved for that. But even then, it would be better to pay the extra off your mortgage and let your student loan sit there.

somethingcorporate

I always saw it as a tax but now I am in my final year of paying it off I have switched to DD which actually annoys me as it comes out at the end of the month and need to remember I have to have £250 in the account then or it will go OD (like it did last month...grrrr!).

Still, I've paid it off around £3k pa for the last 4-5 years or so and it will finally be gone by xmas. Then I can get working on the other mountain of debt I have!

Idiophreak

NinjaSavingKat wrote: »

I understand the interest rate might not put a student lone alongside "other" debts per se - but my idea of being debt free is having no debts. This means not owing money to any institution whether a bank or a student loan company. Whether they are very low percentage interest rate or not someone else is taking your money each month... That is a debt whichever way you look at it. The attitude that some things count and others don't is possibly why some people are in such massive amounts of debt in the first place.

...I don't really consider that I owed SDLC the money, though.

If I borrow money, I shop around for a good price on the thing I want to buy, I shop around for a good rate on the money I want to borrow and I repay "my debt" on agreed terms.

As far as the SL was concerned, I was forced to borrow about 5x the amount my course should have cost me, due to the wealth of my parents and the relatively practical nature of my course, I was forced to use a single provider and I had no say in the terms of the repayment.

Student fees are a kind of non-voluntary wealth redistribution mechanism...or "tax" if you will.

thecassman86

somethingcorporate wrote: »

I always saw it as a tax but now I am in my final year of paying it off I have switched to DD which actually annoys me as it comes out at the end of the month and need to remember I have to have £250 in the account then or it will go OD (like it did last month...grrrr!).

Still, I've paid it off around £3k pa for the last 4-5 years or so and it will finally be gone by xmas. Then I can get working on the other mountain of debt I have!

If you have a "mountain of debt" then you really shouldn't be paying extra on your Student Loan - certainly not if it's putting you in your OD!! Student Loans are frustrating to pay but the interest you pay is minimal compared to the other things. If i were you i'd crack on with those debts first.

Idiophreak

thecassman86 wrote: »

If you have a "mountain of debt" then you really shouldn't be paying extra on your Student Loan - certainly not if it's putting you in your OD!! Student Loans are frustrating to pay but the interest you pay is minimal compared to the other things. If i were you i'd crack on with those debts first.

I read it that sc doesn't have a choice...they've had to pay £250/month (£3k per year_ off the thing. The fact they viewed it as a tax suggests they've not been making overpayments...just the minimum monthly.

thecassman86

Idiophreak wrote: »

I read it that sc doesn't have a choice...they've had to pay £250/month (£3k per year_ off the thing. The fact they viewed it as a tax suggests they've not been making overpayments...just the minimum monthly.

Ahh yes, i've re-read what they said and i think you're right. May have jumped the gun a bit there. Sorry sc

shiney85

Debt is debt, BUT, as someone who has just started a degree with the OU, I won't be rushing to pay my SL off in three years time. I saw an episode of the Cube the other day where one of the winning contestants said she was going to use her winnings to pay her SL off, I had to assume she already has a nice car/mortgage/holidays to have thrown away a rare lump sum! As a child-free, working class type, I don't get any benefits so I see my SL as a benefit of sorts, and I won't be giving our wonderful government any more money than I need to; if it doesn't get paid off before I'm 60, I won't be worrying about it!