MSE News: Student loan interest rates set to fall, but fewer graduates eligible

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"Graduates will pay less interest on their student loans from September, but fewer people will be able to defer "...
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Student loan interest rates to fall from September, but fewer graduates eligible to defer

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  • anna2007
    anna2007 Posts: 1,182 Forumite
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    The Regulations for the older MS loans say:

    ""deferment level" means 85% of the lender’s estimate of average monthly earnings of all full-time employees in Great Britain for the January when the level will apply based on figures published by the Office for National Statistics, or if that Office ceases to publish relevant figures, any other published figures".

    Have you even asked the Government in what way their announcement is compliant with the law? Why has the deferment level decreased, when the ONS says average earnings are up? How did they arrive at a figure £2k less than last year, if average earnings have increased 1.4%? Why has the threshold risen for some IC loans still under the administration of the Government, but reduced for the MS loans, which were sold off to one of the most prominent debt collectors on the planet?

    These are surely the questions that MSE should be getting answers to, not reporting the Government's announcement like it's the norm, or in any way acceptable... I thought Martin was onto the fact that we've been sold out by the Government, or have you forgotten?

    http://blog.moneysavingexpert.com/2014/05/06/the-government-has-sold-people-out-over-erudio-student-loans/

    Things haven't improved since Martin's blog, in fact they've got markedly worse - the clues are in the main Erudio thread on MSE.
  • patanne
    patanne Posts: 1,286 Forumite
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    I think basically they have scre*** you all over and everyone including Martin is toeing the party line. They are STILL recommending student loans as the best way to go, so that future students also get scre*** over.

    The view must be nice from up there. Nice enough not to want to share anyway.
  • Herbalus
    Herbalus Posts: 2,634 Forumite
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    edited 12 August 2014 at 12:47PM
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    I get the impression I'm fortunate to be in the middle category at 1.5%, at least until the base rate rises. I guess that's because I put my student loans in Santander 123 at 3%. #moneysaving

    :)
  • Herbalus
    Herbalus Posts: 2,634 Forumite
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    patanne wrote: »
    They are STILL recommending student loans as the best way to go, so that future students also get scre*** over.

    I'll bite, because I'm curious. Care to recommend a better way to get to university??
  • glad2behere
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    new here, son must resit and pass some finals modules next summer to be able to graduate, yet has now been "finished" by his uni, no more access to classes etc and is not in paid work. Unsure how he feels about resits and its doing my head in. We have some money set aside to help with uni costs, wondering if worth paying off part of loan now, or better to save it and wait it out. thoughts?
  • missbiggles1
    missbiggles1 Posts: 17,481 Forumite
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    patanne wrote: »
    I think basically they have scre*** you all over and everyone including Martin is toeing the party line. They are STILL recommending student loans as the best way to go, so that future students also get scre*** over.

    The view must be nice from up there. Nice enough not to want to share anyway.

    For the vast majority of students, student loans are the only way to go. Most borrowers wouldn't object to being screwed if they didn't have to repay it if they didn't earn enough.
  • Herzlos
    Herzlos Posts: 14,714 Forumite
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    I'm not sure I get the problem; the deferment level is the income threshold you need to exceed before you start paying? In which case whatever side of the line you're on you're still going to be better off with a student loan.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    new here, son must resit and pass some finals modules next summer to be able to graduate, yet has now been "finished" by his uni, no more access to classes etc and is not in paid work. Unsure how he feels about resits and its doing my head in. We have some money set aside to help with uni costs, wondering if worth paying off part of loan now, or better to save it and wait it out. thoughts?






    presumably your son's student loans are being charged at 1.5% per annum?


    whether it's worth paying them off now depends upon whether you can afford it and what alternative uses you have for money that's costing you 1.5% per annum
  • patanne
    patanne Posts: 1,286 Forumite
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    Yes, I agree you are better off with a student loan, until you need to defer (not default) and they sell the loan off to a debt collection agency (Erudio) who then put it on your credit report & you are stuck with it ruining your credit worthiness etc
  • luckyfool
    luckyfool Posts: 1,683 Forumite
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    My understanding was that the deferment threshold was 85% of National Average male earnings. Does this significant reduction mean that the government is admitting that not only are wages not going up that they are falling? That would seem like an interesting admission to be making in the run up to an election. You would also think that a journalist (such as Martin) might be interested in querying this further!
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