Student debt getting wiped?

So I'm in fourth year of medical school (and will be graduating after six years)

I'm planning on attacking my student debt early, to reduce the interest and therefore the amount I will pay back from my loans, and have even taken a reduced loan this year. However, if my student debt is wiped before I pay it off (Labour have suggested they would, but who's to say whether they will keep to that), what will happen to the extra instalments I've paid (on top of the 9% above £25k as per normal?). Would I have effectively thrown away that money, or would I get reimbursed it? Or rather, what is the more likely scenario and in what timeframe?

Comments

  • silvercar
    silvercar Posts: 46,764
    Academoney Grad Name Dropper Photogenic First Anniversary
    Ambassador
    Most likely scenario is your loan won't get wiped.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • sheramber
    sheramber Posts: 18,637
    First Anniversary I've been Money Tipped! First Post Name Dropper
    Forumite
    Who knows what conditions would apply to any wiping of loans. That would be determined as and when it happened
  • agrinnall
    agrinnall Posts: 23,344
    First Post Combo Breaker
    Forumite
    I suspect in the unlikely event of what you suggest actually happening then you would have thrown away any extra money spent on repaying the loan. Althogh as a taxpayer funding loans that are never repaid I'd be happy if you did spend more.



    [For the sake of transparency I did my first degree long before there were any fees and I got a maintenance grant, and my postgraduate fees many years later were paid for by the Scottish government, so I have benefitted big time from the taxpayer]
  • So realistically its worth paying it back early, if would have paid off more (due to interest over longer time) due to the 9% over 25k, as either it pays off for the student (due to the unlikeliness of debt being wiped early) or benefits the tax payer (which I personally think it should be the student's responsibility to do so anyway, but those benefits for the individual would be fairly negligent compared to those of the student)
  • agrinnall
    agrinnall Posts: 23,344
    First Post Combo Breaker
    Forumite
    DotCapel wrote: »
    So realistically its worth paying it back early, if would have paid off more (due to interest over longer time) due to the 9% over 25k, as either it pays off for the student (due to the unlikeliness of debt being wiped early) or benefits the tax payer (which I personally think it should be the student's responsibility to do so anyway, but those benefits for the individual would be fairly negligent compared to those of the student)


    I'm not sure what has led you to this conclusion, it certainly wasn't what I wrote. If it was me I wouldn't repay any extra, at least until it becomes clear whether Labour get in in 2022 (or earlier if an election can be forced before then) and they can actually balance the books enough to go ahead with wiping the loans.
  • Well its based off your reply of "unlikely event of what you suggest actually happening"
    and from Silvercar "Most likely scenario is your loan won't get wiped."

    Both suggesting that it is very unlikely that it will be wiped prematurely, and therefore would accumulate alot of interest (hence costing me more than if I had wiped it earlier myself).

    I have already taken a reduced loan this year (of around £7k), to reduce the amount I pay back in interest
  • silvercar
    silvercar Posts: 46,764
    Academoney Grad Name Dropper Photogenic First Anniversary
    Ambassador
    That's just my opinion, it's your call.

    What you would need is:

    a labour government

    enough spare cash in its budget

    a policy decision that the most sensible-est use of that spare cash is to cancel student loans already taken out.

    Only you can decide if that is likely to happen
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 341.8K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.2K Spending & Discounts
  • 233.9K Work, Benefits & Business
  • 606.1K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards