interest/RPI payments on Student Loan

very_mature_student

I am 52, femail, about to start 3yr full time degree. Husband self employed, pays me £625 per month. If I have to pay RPI on loan of £30000, over 50 years at an average of 5% p.a., then between 55 and 85 I will have paid £45000. At this stage in life, with no pension, I am thinking doing a degree is too risky financially as it is unlikely I will go on to increase my income. Any comments please? Thank you

Masomnia

You only start repaying once you're earning £21,000 so by the sounds of it you won't actually pay anything.

very_mature_student

I got the impression that everyone has to pay the rpi no matter what,
and that once earning 21k rpi plus 3%interest plus loan repayments kick in. I will double check though.

very_mature_student

Hmmm, maybe I should change my name to Very Stupid Student

Ed-1

very_mature_student wrote: »

Hmmm, maybe I should change my name to Very Stupid Student

Quite. RPI+3% interest gets allocated to your loan balance until the 6th April after you leave your course. At this point interest of between RPI and RPI+3% gets allocated to your loan balance each year depending on income (£21000 and below is RPI while £41000 and above is RPI+3%). Your repayments are a 'tax' of 9% of income above the repayment threshold which is £21000. Any remaining loan balance still unpaid 30 years after the 6th April you first become due to repay (April after you leave course) is written off including any and all accrued interest.

N.B. The RPI figure used is the one for the prior March each year and changes on 1st September each year.

very_mature_student

Thank you, don't know how I messed that up!
It is a huge relief!

Thank you again.

Masomnia

very_mature_student wrote: »

Thank you, don't know how I messed that up!
It is a huge relief!

Thank you again.

Not stupid at all. Glad you checked

Hope you enjoy your studies.