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

setmefree2

Mogley wrote: »

You wouldn't be able to put all your money into their LISA or HTB ISA at once because of the funding limitations. A 100% equity S&S ISA would be a good flexible place for larger funds if you are investing for the long term to beat inflation.

Yes I'm sorry I was a bit unclear. I meant "drip it"into a LISA using the annual limits. Also the balance in a HTB ISA at April 6th 2017 can be moved into an LISA this year - meaning you can put £8200 (more than double the usual allowance of £4k) into a LISA this year and get a £2,250k bonus. So £8,200 becomes £10,250 by next April.

http://www.moneysavingexpert.com/savings/lifetime-ISAs

Definitely better than paying off student debt if you are saving to buy a home.

setmefree2

Does anyone else find it seriously disturbing that Corbyn said this (below) on the Andrew Marr show.

“There is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden.

http://www.independent.co.uk/news/uk/politics/jeremy-corbyn-labour-student-loans-debt-manifesto-pledge-amnesty-cancel-tuition-fees-a7856161.html

Lengthen the period of paying it off? That would make things worse for students not better. He clearly has no understanding of the SL system. And he wants to be PM. Hummmm.

Sampson1994

Hello,

I currently have £7000 student loan debt, I earn £23000 but will rise up to £40000 within 7 years. Should i pay off my student loan in bulk? I'm currently on Plan 2.

Hope this is the right place,

Thanks

koru

Sampson1994 wrote: »

I currently have £7000 student loan debt, I earn £23000 but will rise up to £40000 within 7 years. Should i pay off my student loan in bulk? I'm currently on Plan 2.

I assume you are in your 20s. As your loan is pretty small, you are going to end up paying it all off fairly quickly anyway, at 9% per year on your salary above 21k. If you know what your salary is likely to be, you can work out how long it will take to pay it off (and what rate interest you will be charged each year until then).

Then, you need to work out how much earlier you could voluntarily pay it off and then decide the best use you could make of the money if you hang on to it as long as possible. If it would earn you less than the extra interest you incur by waiting, then best to pay it off early. If you have a car loan, on which you are paying 5%, probably best to pay that off instead. If you would otherwise not use your £4k LISA allowance, you may be better putting the money in a LISA and getting the 25% uplift, plus the return on the LISA savings/investments.

Also bear in mind how sure you are about your future salary. Can you rule out losing your job or not working?

tysonpj

Do you think these loans were mis-sold to 17/18 year olds at a vulnerable(ish) time in their lives with little advice offered? If it was sold as a graduate tax then fair enough but a loan?.. that never gets paid off...rates that may or may not change...repayment amounts that may or may not change..terms that may or may not change.
I do not know the answer but over time this will become another toxic policy that will be blamed on past governments for years to come.

Fitzmichael

Surely the Head of Maths, without needing a prompt from Head-teacher or anyone, should explain, like Martin, to all students in the first term of year 11 how student loans are not to be terrified of. With the opportunity to ask questions of a teacher you know and, presumably, trust, this would surely settle any jitters a student (or 'pupil, in my ancient terms) might have.

a1bc2ef3

"My apologies for putting government and guarantee in the same sentence."

Bad memory's quote.

How much can we trust the 30 year period followed by writing off of the outstanding amount as being guaranteed? Will future governments consider this to be binding on them? Is this a term that could be changed in future or not? Is there any official guarantee available to the students affected?

Fitzmichael

BoxerRules: I graduated just before you started and the big difference from our day was that no-one, at least that I ever knew, went to uni with financial advantage in mind; you went to follow your intellectual interests (and for the 'fun' you expected to have). Uni choice was by their intellectual reputation; there were no comparison 'Guides' to how much graduates of each earned. 'Career' requirements only affected a minority, such as medical students. (Want to be a top civil servant? - Do Classics, so useless, except as a demo of intellectual ability.) I went to become fluent in all aspects of my 3 foreign languages (+ the fun). I knew they would give me a choice of interesting (chance to travel) and steady jobs, not necessarily with very high pay. There were no grants when I was 18 in 1959, and uni was still for the class that could afford to pay their children's tuition and all the living (inc 'fun') expenses of escaping to different surroundings. However because uni in France was a free entitlement for those passing the Bac (equivalence to which a French Cultural Attache awarded me), I spent a year at Grenoble Uni before grants were introduced here, and none of my French, Spanish and Luxemburg fellow-students mentioned career enhancement - education was an intellectual pursuit. How impractical those Continentals are, and how anti-intellectual we Brits!

Tom26

When I contacted the SLC to make a similar point to the "Mis-Sold?" post above, they said "well your son should have read the small print when he signed up". I find this totally disingenuous, given that nearly all 17-year olds are financially very inexperienced - and don't have much clue what constitutes good value (or not) in a loan.


Also he applied in early 2012 - just before the old very low fixed interest scheme ended - and he/we assumed that low interest pertained.


A strong whiff indeed of mis-selling.

Tom26

My son has had a variety of low-paying jobs since graduating in 2016. He has now (thankfully) found a "proper job", and will have a salary of £22k from 1st October. However his total earnings in the 2017/18 tax year will be less than £14k.


Does this mean for 2017/18 his student loan interest rate will be 3.1% - or 6.1% ?? (Is the £21k 'earnings' threshold based on salary at tax year end - or actual income in the tax year?)