Should I take a student loan if I don't need it?

5yrplan

Socajam wrote: »

I am 62 years old, started working at 16, no children, never claimed unemployment, so what's your question again.
You not being able to afford a house have nothing to do with taking the money when there are others whose need may be greater than yours.
You are planning to take the money for selfish reasons, wanting a house that you cannot afford.
But to hell with it, let's take a free education loan that I will not have to repay and to hell with everyone, so that I can deposit it in the bank to buy a house.

This sounds like sour grapes - I'm 56 years old - like most of my generation my first degree was free, but I have more than paid for it in the additional tax I have paid over the years compared to someone on an average wage. Education should be free at the point of use and paid for by society as everyone benefits.

A young person planning to buy a house seems very responsible to me - the mortgage will be a lot lower than rent. Sounds like the OPs choice is to not take any loans in which case their parents will be paying all of their living expenses (and presumably their course fees), or take out loans (which they may or may not pay off) which they can then either live off (saving their parents money) or save. I suspect if they live off their loans they would eventually borrow that same money from their parents for a deposit?

At the end of the day, yes - if they have the choice not to take the loans then they are lucky because unlike some they obviously have some parental backing.

My view is if they take the loans and benefit from the education in the way one would hope then they will repay not only what they borrowed but also a shed load of interest. If the economy tanks, no jobs or they get ill etc and they end up not paying the loans back then that seems fair - because they won't have benefitted from the education?

The question is - have they already got so much student debt that adding to it won't make much difference to their repayments unless they become very high earners, and in general do teachers become high earners?

there must be a point at which you are "in for a penny, in for a pound"

mksofa

spadoosh wrote: »

People being douchebags to the OP here.

At the end of the day you're talking about £3k loan? Its not much in the way of a deposit (Appreciate its a start and a good chunk of money) so for me id keep it simple. I prefer to know exactly what will happen, with this, you just cant know.

I get a 9K bursary which would just about pay the fees, but I could take a loan for the those fees so my deposit fund would be boosted by about £12K if I get a maintenance loan and don't have to pay rent. I will get a part-time job to fund going out etc.

I will leave uni with about £45K of loans, if I borrow the max for the PGCE then my total will be about £60K. Part of me thinks that I owe so much that I might as well borrow more. I will be paying 9% extra tax for the majority of my career whatever I borrow.

JayRitchie

badmemory wrote: »

If a multi millionaires child can take a loan then I see no reason why you shouldn't. Whether it is financially viable is a whole other question. The interest rate seems eyewatering.

Why do you think the interest rate is high? It looks pretty cheap to me.

kimplus8

Socajam wrote: »

Yes, I could but it was very relevant to the question asked by the OP

It is not though, the student loan, in the element that the OP refers too, is non-means tested so she is not taking this money away from anyone else, least of all yourself.
You are just being spiteful for the sake of it. Lots of people take loans etc totake advantages of the benefits of those loans/debts.
stoozing for example.

spadoosh

mksofa wrote: »

I get a 9K bursary which would just about pay the fees, but I could take a loan for the those fees so my deposit fund would be boosted by about £12K if I get a maintenance loan and don't have to pay rent. I will get a part-time job to fund going out etc.

I will leave uni with about £45K of loans, if I borrow the max for the PGCE then my total will be about £60K. Part of me thinks that I owe so much that I might as well borrow more. I will be paying 9% extra tax for the majority of my career whatever I borrow.

I thought if you lived at home you wherent entitled to the full £12k maintenance loan? Are you entitled to the full maintenance loan?

The bit in bold is an incredibly dangerous view to hold. At £60k do you think you might as well go to £80k? This is how debt spirals. Probably not as bad in terms of student loan with a chance of not having to pay it all back but please dont take this view with conventional finance.

spadoosh

JayRitchie wrote: »

Why do you think the interest rate is high? It looks pretty cheap to me.

RPI + 3%.

So 5.7%

Ive got a mortgage thats 2.19% and you can get a £12k loan for less than 3%. Obviously depends on personal situation. But even at the lowest rate of interest charge at just RPI theres conventional products cheaper.

My student loan was lowest of RPI or bofe base rate + 1% so currently 1.75%

Of course it completely depends on whether youre actually pay it back or not, but its probably not a great outlook to assume that you wont.

mksofa

I am only entitled to the minimum maintenance loan (currently I get about £3800 for UG) but I can get a loan for the fees for PGCE which are £9250 same as my degree.

As I will be teaching history I get a £9000 bursary which I could use to pay the fees, could live off and pay parents some rent or could save if they let me live rent free which I know they would.

I am not sure if I can get any maintenance loan while doing the PGCE - I am presuming if I can it would be the same as I get now as it will be means tested.

I would obviously hope to earn enough to pay off the loan, but according to the MSE calculator it looks like if I stayed a teacher I might not unless I get some really big pay increases or change to a higher paying career. I think I am quite money savvy because my parents have taught me a lot about savings, credit cards, isas, property etc that some of my friends aren't aware of - and I have taken responsiblity for my student house bills etc. so I have a good credit rating already.

Its such an unknown - but one thing it does seem is that there is no point in overpaying unless you can clear the whole debt in one go as you still pay the same amount every month based on your earnings no matter whether you owe £10000 or £100000 - so until I have a spare £45K lying about I won't be able to make the debt I have already any smaller.

spadoosh

Socajam wrote: »

I am 62 years old, started working at 16, no children, never claimed unemployment, so what's your question again.
You not being able to afford a house have nothing to do with taking the money when there are others whose need may be greater than yours.
You are planning to take the money for selfish reasons, wanting a house that you cannot afford.
But to hell with it, let's take a free education loan that I will not have to repay and to hell with everyone, so that I can deposit it in the bank to buy a house.

62. So one of the people who massively benefited from making the national debt what it is today. Of which, the likes of the OP is going to have to pay for.

And you have the audacity to whinge about them wanting to take a loan. A loan being something of which you are charged interest for taking out. Yup some wont be repaid. Mine certainly wont be and im on plan 1! The difference being my debt was capped at about £18k, the smallest the OPs student debt can be today eallistically is £27750, just paying for the course. More likely to be around the £45k mark as mentioned by the OP.

So much for gaining wisdom with age.

Lets not forget that teaching requires a degree and PGCE so you have to go to uni for 4 years. To get a job that pays an average uk wage. And the OP is screwing you over?

spadoosh

mksofa wrote: »

I am only entitled to the minimum maintenance loan (currently I get about £3800 for UG) but I can get a loan for the fees for PGCE which are £9250 same as my degree.

As I will be teaching history I get a £9000 bursary which I could use to pay the fees, could live off and pay parents some rent or could save if they let me live rent free which I know they would.

I am not sure if I can get any maintenance loan while doing the PGCE - I am presuming if I can it would be the same as I get now as it will be means tested.

I would obviously hope to earn enough to pay off the loan, but according to the MSE calculator it looks like if I stayed a teacher I might not unless I get some really big pay increases or change to a higher paying career. I think I am quite money savvy because my parents have taught me a lot about savings, credit cards, isas, property etc that some of my friends aren't aware of - and I have taken responsiblity for my student house bills etc. so I have a good credit rating already.

Its such an unknown - but one thing it does seem is that there is no point in overpaying unless you can clear the whole debt in one go as you still pay the same amount every month based on your earnings no matter whether you owe £10000 or £100000 - so until I have a spare £45K lying about I won't be able to make the debt I have already any smaller.

Dont the tuition fee loans and the bursaries get paid directly to the provider? Ie the money will never see your account, the uni will get two lots of payment and presumably refund the tuition fee loan.

mksofa

just to add as we both get minimum maintenance my parents have to support both me and my brother so its not just our loans - in theory we should also be paying them back too?

There are a lot of people who are benefitting from all the people with degrees like teachers, doctors, nurses, pharmacists, engineers, lawyers, architects, etc etc. and haven't paid any additional tax for the priviledge. Without people doing degrees who would ensure our cars, airplanes, railways, our health are safe? who would be finding cures for diseases?