Should I take a student loan I don’t need?

DKacha

I’m receiving a fee decrease of £3k, and substantial bursaries, so I have applied for a tuition loan, but I don’t need the maintenance loan money because I’ll still have a surplus at the end of the year due to the bursaries. I wasn’t going to take a maintenance loan, but given all the posts about “you’ll probably never pay it back”, I’m starting to wonder if this is the best decision. I’m studying Maths at Oxford and I aim go into something in Finance and Banking, irony acknowledged, and I’m not sure about salaries to be able to do the calculations myself.

DKacha

I forgot to mention, it is the maximum maintenance loan that I am eligible for.

Socajam

Why would you take something that you do not need - leave the loan for others whose needs are greater than yours.
To me what you plan to do is tantamount to stealing whether you are eligible for the loan or not.
The country have occurred enormous debt from COVID and we are not done, yet you are allowing your greed to increase to that debt.
To those who say this is harsh and rude, that may be so, but I hate for people who have no need for something to steal it from others who have to really struggle to get there.

fred246

The normal tuition fees are £9250 a year so must students will owe at least £27750 by the end. The amount you pay is only dependent on your salary so the amount you borrow doesn't affect repayments. After 30 years it is written off. So must students will be repaying roughly from 21 to 51 years of age. If you borrow the maximum you will definitely be richer in your 20s but MAY be poorer in your 40s but ONLY if you are really well paid. If you borrow the minimum you will definitely be poorer in your 20s but MAY be richer in your 40s but ONLY if you are really well paid. So if you borrow the maximum the only risk is that you will earn £100K year after year and in your 40s are taking home a few percent less than you would have done if you had not borrowed extra. You would still be on a great salary though to compensate.

pramsay13

If you don't need it then don't take it...

Unless you get it interest free for a period of time and you can put it in a fixed rate account or even in NS&I premium bonds. Once interest would start to be payable you could pay it back at that point.

JayRitchie

pramsay13 said:

If you don't need it then don't take it...

Unless you get it interest free for a period of time and you can put it in a fixed rate account or even in NS&I premium bonds. Once interest would start to be payable you could pay it back at that point.

Thats not how student loans work. You pay back a percentage of income - and for most people that will be the same regardless of how much they borrow.
OP - are you planning to do a three or four year degree?

bellaboo86

I knew someone that didn’t really need their student loans and put them in a savings account. This way quite a while ago now though. 

tacpot12

Socajam said:

Why would you take something that you do not need - leave the loan for others whose needs are greater than yours.
To me what you plan to do is tantamount to stealing whether you are eligible for the loan or not.
The country have occurred enormous debt from COVID and we are not done, yet you are allowing your greed to increase to that debt.
To those who say this is harsh and rude, that may be so, but I hate for people who have no need for something to steal it from others who have to really struggle to get there.

I would say the opposite to Socajam, the loan is available to everyone. By taking it, you are not depriving anyone else. If everyone took the loan, the government might need to borrow a bit more money, but this was the political choice they made when the introduced student loans and removed the previous maintenance grants.

Whether or not you pay back the loan will depend on how your life turns out. If you (and we the taxpayer) are unlucky, you may never pay back the loan. If you life works out ok, you will. So it will depend on what you can do with the money. I would use at least half of it to kickstart your pension savings as this will maximise the time that these savings have to grow. You will be surprised at the effect of compound growth on your investments. I would keep the other half as "emergency savings" and only use them in true emergency.

DKacha

JayRitchie said:

pramsay13 said:

If you don't need it then don't take it...

Unless you get it interest free for a period of time and you can put it in a fixed rate account or even in NS&I premium bonds. Once interest would start to be payable you could pay it back at that point.

Thats not how student loans work. You pay back a percentage of income - and for most people that will be the same regardless of how much they borrow.
OP - are you planning to do a three or four year degree?

It’s a four year course, but I’m about to enter my second year. In the first year, I initially took the loan, but only took the first instalment as I was then notified about the bursary.

rollingmoon

tacpot12 said:

Whether or not you pay back the loan will depend on how your life turns out. If you (and we the taxpayer) are unlucky, you may never pay back the loan. If you life works out ok, you will.

Or your life might work out fine, but you might have a low-paid job in the public sector that you love - like me. I never paid back a penny of my undergraduate student loans, and there is every chance my postgraduate loans will go the same way, but my education has helped me do my job better; it has helped me to train and mentor those I work with and manage more effectively. The validity of an education shouldn't simply be judged on how much money the beneficiary earns.

I realise that makes me a thief in the eyes of Socajam and others of similar outlook; suffice to say I won't be losing any sleep over that.

grumiofoundation

Socajam said:

Why would you take something that you do not need - leave the loan for others whose needs are greater than yours.
To me what you plan to do is tantamount to stealing whether you are eligible for the loan or not.
The country have occurred enormous debt from COVID and we are not done, yet you are allowing your greed to increase to that debt.
To those who say this is harsh and rude, that may be so, but I hate for people who have no need for something to steal it from others who have to really struggle to get there.

Presumably you pay additional taxes/charitable donations to the public sector with any money you have left over that you 'don't need'?