Why haven't student loans become a huge mis-selling scandal like ppi?

Bolt1234

would like to chip in here. Univeristy isnt for everyone.  Having a target of 50% going to uni was silly and it dumbed down the degree. Now employers know what are the good degrees from top universities are and will pick their employees  accordingly.  This means that the 'others' will probably never get a job that pays over £26k or make much of a dent in the payments.  If only apprenticeships were seen as just as important.  Its not free money if you never pay it back.  Someone will be paying it back.  It just wont be you!

I have a question though please.  My son about to start a grad scheme and will be earning just over £26k.  He will also be coming into an inheirtance in the next couple of years. He will be on a fast track within this company and his salary will increase over the next few years anyway.  He will be London based.  So - should he consider paying the loan back?  Or should he carry on paying the loan and use the £45k to put down as a deposit on a house.  

Could anyone advise.  My head is telling me that he should do the house?    

ict_guy

Bolt1234 said:

would like to chip in here. Univeristy isnt for everyone.  Having a target of 50% going to uni was silly and it dumbed down the degree. Now employers know what are the good degrees from top universities are and will pick their employees  accordingly.  This means that the 'others' will probably never get a job that pays over £26k or make much of a dent in the payments.  If only apprenticeships were seen as just as important.  Its not free money if you never pay it back.  Someone will be paying it back.  It just wont be you!

I have a question though please.  My son about to start a grad scheme and will be earning just over £26k.  He will also be coming into an inheirtance in the next couple of years. He will be on a fast track within this company and his salary will increase over the next few years anyway.  He will be London based.  So - should he consider paying the loan back?  Or should he carry on paying the loan and use the £45k to put down as a deposit on a house.  

Could anyone advise.  My head is telling me that he should do the house?    

Personally, I wouldn’t be thinking of paying it back early. You never know what may be around the corner re employment or salary. Best to invest the inheritance wisely, property or otherwise. The student loan payments will always be a small percentage of his take home pay and, should anything ever happen to his employment, he will be fully covered by the student loan agreement- in that he will not have to make payments if his salary drops below a certain threshold.

Bolt1234

Thank you, my thoughts exactly.  If he lost his job say he could do with that £10k he paid back to the SLC...  oops.   Too late.  You cannot borrow it back

Claire2989

Bolt1234 said:

would like to chip in here. Univeristy isnt for everyone.  Having a target of 50% going to uni was silly and it dumbed down the degree. Now employers know what are the good degrees from top universities are and will pick their employees  accordingly.  This means that the 'others' will probably never get a job that pays over £26k or make much of a dent in the payments.  If only apprenticeships were seen as just as important.  Its not free money if you never pay it back.  Someone will be paying it back.  It just wont be you!

I have a question though please.  My son about to start a grad scheme and will be earning just over £26k.  He will also be coming into an inheirtance in the next couple of years. He will be on a fast track within this company and his salary will increase over the next few years anyway.  He will be London based.  So - should he consider paying the loan back?  Or should he carry on paying the loan and use the £45k to put down as a deposit on a house.  

Could anyone advise.  My head is telling me that he should do the house?    

In most cases it’s not the best financial move to pay back early. But with the newer loans it depends a bit on how much he will earn. Martin wrote a great guide and calculator: https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/

ryanm8655

Bolt1234 said:

would like to chip in here. Univeristy isnt for everyone.  Having a target of 50% going to uni was silly and it dumbed down the degree. Now employers know what are the good degrees from top universities are and will pick their employees  accordingly.  This means that the 'others' will probably never get a job that pays over £26k or make much of a dent in the payments.  If only apprenticeships were seen as just as important.  Its not free money if you never pay it back.  Someone will be paying it back.  It just wont be you!

I have a question though please.  My son about to start a grad scheme and will be earning just over £26k.  He will also be coming into an inheirtance in the next couple of years. He will be on a fast track within this company and his salary will increase over the next few years anyway.  He will be London based.  So - should he consider paying the loan back?  Or should he carry on paying the loan and use the £45k to put down as a deposit on a house.  

Could anyone advise.  My head is telling me that he should do the house?    

Definitely house. Though will struggle to buy in London until his salary is higher, even with a healthy deposit. Will save a fortune on rent that’ll more than offset the interest on the student loan.

gingerdad

Oliver1191 said:

steampowered said:

Your loan doesn't need to be paid if you aren't earning, and will never be paid in full if you don't earn enough. 

Your teachers were correct to say that they are low interest. Given your age, you will presumably be on a "Plan 1" student loan, paying almost no interest - 1.1% currently. The rate is higher for those who started university after 2012.

What "other options" are you referring to? Are you suggesting that you wouldn't have gone to university at all, or that you would have paid your fees up front rather than taking a student loan?

Well, they neglected to mention that interest started to accrue as soon as the loan was received.

They also neglected to mention the timescale you would need to re-pay the debt and the level of stress this would involve.

As a child, no mention was given to emotional wellbeing and anxiety that people with debt can face.

In my case, the debt was paid off ages ago. The original debt was 15k, with interest i would have paid back around 30k i would have thought.

I would have been a lot better off getting work experience, getting paid and doing the degree part time.

What about your Parents did they not help you?

If you'd have been better off getting work experience then maybe you did the wrong degree.

My kids are very clear of the new system and how it works and what they will pay when they both start university in September. it's not rocket science, and hopefully they'll both get good degrees and use them. But they know they'll be paying 9% of everything they earn over £26500 for the next 30 years unless they're careers fly.
Before you throw stones maybe you need to look closer to home 

JayRitchie

As a child, no mention was given to emotional wellbeing and anxiety that people with debt can face.
Why are student loans causing you anxiety? This is not the sort of debt to be concerned about.
I am sympathetic - I think 18 year olds seem to get rushed to university without other options, including waiting a while, being discussed.