But the interest keeps adding...

Blackavar

Hi
So our son, left Uni a couple of years ago and will probs go into low paid charity work so no immediate danger of having to start paying off the loan (which was tuition & accom).
BUT...every month £30 interest is added to the amount owed and over a long period of time I can see this accumulating to a massive sum which will be hanging over his head, maybe forever.
As parents, we are just about in a position to pay this off if we forgo some future plans we have.
I've trawled through these message boards for direction/info but nothing has really sprung out as an obvious path to take.
I've seen his student loan statements and every month £30+ is added and will continue to increase.
Any ideas please?

agrinnall

If he's going to be in low paid charity work for the next 28 years why worry about it, he'll never get anywhere near paying it off (he may never pay anything) before the entire outstanding amount is written off.

Blackavar

Thanks but who knows what can happen over 28 years? In this space of time the 'debt' could climb to £50K and I can appreciate the feeling of this being called in if a serious wage paying job turns up at some point. Every month getting mails 'you now owe us this much' .....We could eliminate this ongoing worry by paying it off but at a cost to our future plans.

agrinnall

Ok then, a different tack, it's his debt, not yours, he is the one who will benefit from his studies so it's his responsibility to pay back the loan should his income reach a level where payments become due. If you had enough spare money that you could pay it off without having any impact on you then it might be worth considering, but as you don't I think you'd be daft to do it.

And should you be in a position to need to seek benefits at some point in the future your repayment of his loan could be regarded as deliberate deprivation of assets.

gettingtheresometime

As far as I can make out a horrendous percentage of student loans will never be paid off in full.

The government knows this but this message seems to have not hit the general public yet,

Also, from what I can make out the loan doesn't impact on things such as mortgages.

Therefore just look at the repayment as being like a graduate tax which may or may not be paid by your son.

Blackavar

Thanks for all advice which I appreciate, understand and take on board while trying to arrive at a decision.
I guess it's the thought of £30+ (which will increase over time) which is added to the debt every month which I could stop right now.
I think the decision will be to led it ride.
An Oxbridge education has delivered a philanthropist who will probably never be in a position to pay it back. Thanks for your input.

jerryOR

What's the interest rate, if you don't mind me asking?

flamin_galah

I graduated 10+ years ago, and have less of a loan than students these days so my interest is currently about £200 a year. It doesn't even cross my mind to worry about it. My loan won't expire until I'm 65 I think, so still a long way to go but I know that the increments for repayment are small enough so I'll manage if I get a job paying above the threshold.

If your son gets a good paying job in the future, he'll pay a small percentage of his wage back. I think the first repayment amount is something like £20 a month. If he's staying in low paid work for a while, he'll probably never make the full amount so it doesn't matter how much interest goes on. The chances of him paying back the full amount borrowed minus interest are not high anyway. Once the 28 years are up, it'll be written off anyway.

And as someone already said, it's his loan. He signed the agreement. He had the benefits of his education. It's his responsibility to worry about paying it back, not yours.