Guide discussion: Should I repay my post-2012 student loan?

Anna_Mc_Kinnon

TO ONE AND ALL   AND TO MARTIN TOO

WHAT HAPPENS TO SOMEBODY WHO HOLDS DUAL NATIONALITY BRITISH AND ANOTHER ONE    AND WHO HAD TAKEN A BID STUDENT LOAN AND GOT HIS OR HER DEGREE AND THEN DISSAPPEAR AND GIVE UP HIS OR HER BRITISH NATIONALITY/PASPORT NOT RENEWED AND CARRY ON USING HIS OR HER OTHER NATIONALITY PASSPORT AND NEVER  VISIT THE UK AGAIN

CAN THAT PERSON GET AWAY WITH NEVER HAVING TO REPAY THAT STUDENT LOAN ?

Anna_Mc_Kinnon

THE WORST PART OF THIS AND MOST SICKENING THING THOSE PEOPLE IN THE GOVERNMENT WHO HAVE MADE THOSE STUPID LAWS  HAD 100%  FREE UNIVERSITY EDUCATION THEMSELVES

I DO HOPE THE LABOUR GOVERNMENT CANCEL/ABOLISH THIS    THE MOMENT THEY GET IN

AND SORT OUT THE UNIVERSAL CREDIT THING TOO ONCE AND FOR ALL.

I BLAME THE PEOPLE THEMSELVES FOR THE WAY THEY CAST THEIR VOTE AT THE BALLOT BOX.

SO CARRY ON AND SUFFER.

silvercar

Anna_Mc_Kinnon said:

TO ONE AND ALL   AND TO MARTIN TOO

WHAT HAPPENS TO SOMEBODY WHO HOLDS DUAL NATIONALITY BRITISH AND ANOTHER ONE    AND WHO HAD TAKEN A BID STUDENT LOAN AND GOT HIS OR HER DEGREE AND THEN DISSAPPEAR AND GIVE UP HIS OR HER BRITISH NATIONALITY/PASPORT NOT RENEWED AND CARRY ON USING HIS OR HER OTHER NATIONALITY PASSPORT AND NEVER  VISIT THE UK AGAIN

CAN THAT PERSON GET AWAY WITH NEVER HAVING TO REPAY THAT STUDENT LOAN ?

Nationality is not a condition of repayment, why would you think it was?

Student loans are repayable for overseas, the slc even publishes a table of repayments from overseas countries that adjusts for the costs of living. Go overseas and not repay and it will be a debt and your loan account will be in arrears, so the debt will never be written off. Unless you can tell the future, you won’t know if you ever want to return to the UK.

booneruk

Anna_Mc_Kinnon said:

I DO HOPE THE LABOUR GOVERNMENT CANCEL/ABOLISH THIS    THE MOMENT THEY GET IN

I'm afraid it was a Labour government who introduced tuition fees in the first place.

kaMelo

Save your time, @Anna_Mc_Kinnon is a troll, or in their words 'A senior student doing advanced research on far eastern ladies who marry older western men'

KeepOnKnitting

I can now get a commercial loan at a cheaper interest rate than my student loan is charging me. I'm so tempted to stop paying this rip off and save myself some money. 7.8% is ridiculous.

JohnMaclean

Hello.

Really appreciated peoples thoughts:

My son has just finished his Uni course and has started his first main job. He has been lucky to inherit some money and has asked me if he should pay off his £30k student debt now, before the interest makes the debt much larger. He is aware that the repayments are based on his earnings so we sat down and prepared some 'what if' excel scenarios.

Based on his estimated earnings, after 30 years his earnings maybe £120k pa and the annual repayment would be £7.5k for that year, based on the £27,295pa threshold increasing by 1% pa. His total repayments are £110k.

The main other assumtion is that, if he does pay the debt off now, the monthly repayment he would have paid, is instead added to his pension or invested in an ISA. The conclusion was (even with the debt being paid off by year 26) that he probably would be better off paying off now as he would £127k in his investment by year 26.

He has no other debt but is saving in a LISA and will need a mortgage at some point.

Appreciate the main driver is his total income and assumes he will work constantly for the next 30 years.

Thank you

silvercar

JohnMaclean said:

Hello.

Really appreciated peoples thoughts:

My son has just finished his Uni course and has started his first main job. He has been lucky to inherit some money and has asked me if he should pay off his £30k student debt now, before the interest makes the debt much larger. He is aware that the repayments are based on his earnings so we sat down and prepared some 'what if' excel scenarios.

Based on his estimated earnings, after 30 years his earnings maybe £120k pa and the annual repayment would be £7.5k for that year, based on the £27,295pa threshold increasing by 1% pa. His total repayments are £110k.

The main other assumtion is that, if he does pay the debt off now, the monthly repayment he would have paid, is instead added to his pension or invested in an ISA. The conclusion was (even with the debt being paid off by year 26) that he probably would be better off paying off now as he would £127k in his investment by year 26.

He has no other debt but is saving in a LISA and will need a mortgage at some point.

Appreciate the main driver is his total income and assumes he will work constantly for the next 30 years.

Thank you

Firstly, I’d look at the inheritance and think whether it could be better spent as a house deposit, enabling son to buy that much earlier or something that bit nicer and hopefully at a better mortgage interest rate, given he would have a larger deposit than otherwise. Also consider investing it or paying into a pension while there are tax advantages for pension contributions.

You estimated the loan repayment after 30 years, but you then said it could be cleared in year 26. So repayments would stop when it’s cleared.

I don’t know what the answer is, but the temptation is to think that the interest rate on a student loan is higher than on a mortgage, so it’s best to clear the loan, but the money could be used as a deposit to reduce the interest on the mortgage, so it’s a complex calculation. Generally, mortgage rates drop when loans fall below 90% loan to value and again at 80%. Add into that, the possibility that the money could mean a better property, so more comfort/ less need to move up the ladder…

The flip side is that outgoings influence the maximum mortgage, so not having the student loan repayments could increase the maximum. mortgage available.

JohnMaclean

Thank you silvercar. I agree, it is tricky. He has considered paying it into a pension, with the eventual hope that its value will exceed what he would have paid in repaying the student loan.
There is also the psychological aspect-getting rid of that debt, although reducing his eventual mortgage would also be beneficial!