Yet another question on student loan payment

snowshine

Hello,
My son is to commence Uni (to do medicine) in Sept 2017. We are from Wales. Student fees is set at £9250.00/year

Student finance Gov.Uk site suggests that for student entering this Autumn from England and Wales the student loan company (SLC)
pay the institution directly and the amount borrowed will incur Retail Price Index (RPI) + 3% interest from the day it was borrowed.

So by the time he qualifies albeit no mishaps in his 5 year studies he will have accumulated tuition fees + (RPI +3%) interest which he will have to start paying in instalments through payee...

Reading in here: https://www.google.com/url?q=http://www.moneysavingexpert.com/students/should-i-get-student-loan&sa=U&ved=0ahUKEwicg7Tj4MTTAhXMLcAKHVDqBmcQFggMMAM&client=internal-uds-cse&usg=AFQjCNHmBYN10k8vATfr_hVQXPlG2APsuQ

Money Martain argues that it is not a wise move to pay the tuition fees, but surely if one undertakes a course which almost certain to (I know a lot of other scenarios-getting ill and not working ect) land one at the end of their studies in a job with salary above £21000.00 (this will include basic + on call pay), will start paying monthly through PAYEE system.

At present the interest rates for savings are at the rock bottom, less than 0.25%, is it not wise to pay the tuition fees in advance if some savings available. On the long run he would have saved more than leaving the saving in a bank account?

I do not know if as he is from Wales he would be paying the full tuition fees to a University or he is liable part and some other will be paid by Welsh Government?

Would anybody's child gone through this may be able help us understand.

I thank you in advance for your input.
Regards

Arleen

If you can afford to pay some of his tuition from savings rather than getting an interest-bearing loan, that, of course, will be saving over the extended period if your son keeps making good money. But make sure that you have enough saved up in the case of any emergency that may happen. As for possible grants and discounts, you are best to contact the university your son plans to attend; they know best.

Although I must warn you that post-medicine life (for those who do not drop out along the way) is not as high-paying and glamorous as people picture. Make sure to do proper market research, see what minimum grades are realistically required, how many candidates are there per position and how much those jobs pay. Make sure that there are no fees outside of tuition that your son will need to pay before being able to practice too, i.e., license examinations, etc.

snowshine

Yes Arleen, You are spot on.. in that what future holds no one knows as well as they don't earn much when qualify.
This is why I marked his earrings as ( Basic + Oncall).
The basic pay is only taken into account for example for pension payment/deduction prior to being taxed. ( The On Call payment is not eligible for pension savings/deduction and so taxed all )
I do not want digress from the question in that I wonder when it comes to student Loan repayment the earning is seen as basic pay or all monthly wages? I am sure it is all because for the self-employment, Revenue will take into other incomes such as interest,stock and shares ect, it says...

Arleen

It is on all personal income, and if he has more complicated tax situation he will pay what's not covered by PAYE through self-assessment.

Ed-1

Arleen wrote: »

If you can afford to pay some of his tuition from savings rather than getting an interest-bearing loan, that, of course, will be saving over the extended period if your son keeps making good money.

The loan balance in many cases makes no difference to what a student repays.

The repayment is a tax set at 9% of earnings over £21,000 regardless of the amount borrowed.

After 30 years any amount left outstanding is forgiven by the Government (written off).