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

mark55man

There is a problem with taking them - and entirely not a moral judgement - I understand the interest rate is quite high 6% or so, and so higher than you can cautiously expect to return through investment.  So in the event that you are fortunate in your career (and with a Maths degree from Oxford and plans to go into finance you should be) then if you took the money and put it in a savings account, unless you repaid the moment interest started accruingm I'm pretty sure you would end up net worse off than not taking it.

However, in Brideshead Revisited there is a quote about university being the one place were £100 a week extra can make a real and lifelong difference to your experiences.  So if you are going to scrimp through your time because you haven't taken the loan I think that would be cutting you nose off to spite your face.  So think about if there is a specific thing you could do with the money that you otherwise couldn't afford but was worth it then do it - eg something like sports or cycling where there are additional costs.  If you were cynical you could regard it as a shot to nothing in that if you life took a different direction you would end up not paying for it.   

Voyager2002

mark55man said:

However, in Brideshead Revisited there is a quote about university being the one place were £100 a week extra can make a real and lifelong difference to your experiences.  So if you are going to scrimp through your time because you haven't taken the loan I think that would be cutting you nose off to spite your face.  So think about if there is a specific thing you could do with the money that you otherwise couldn't afford but was worth it then do it - eg something like sports or cycling where there are additional costs.  If you were cynical you could regard it as a shot to nothing in that if you life took a different direction you would end up not paying for it.   

An interesting thought: but modern Oxford is very different from the "Brideshead" world. Terms are intense and coursework demanding, and arguably having the money to buy sports equipment could lead to distraction and getting a worse degree result (and hence career) than otherwise.

Voyager2002

DKacha said:

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.

Congratulations on the place at Oxford and earning the support you are receiving.

The time you will really need the money will be soon after graduation and starting work. If you do end up in Finance you are likely to be working in the centre of London and so will need to live in a region where housing is particularly expensive. High rents make it difficult to save up a deposit and hence buy even a modest property. If you are able to save the entire maintenance loan (preferably in a 'help to buy' ISA) and use it as a deposit to buy a home near to your workplace after graduation, the saving on rent  is likely to far outweigh the interest that you will need to pay on the loan.

grumiofoundation

mark55man said:

There is a problem with taking them - and entirely not a moral judgement - I understand the interest rate is quite high 6% or so, and so higher than you can cautiously expect to return through investment.  So in the event that you are fortunate in your career (and with a Maths degree from Oxford and plans to go into finance you should be) then if you took the money and put it in a savings account, unless you repaid the moment interest started accruingm I'm pretty sure you would end up net worse off than not taking it.

However, in Brideshead Revisited there is a quote about university being the one place were £100 a week extra can make a real and lifelong difference to your experiences.  So if you are going to scrimp through your time because you haven't taken the loan I think that would be cutting you nose off to spite your face.  So think about if there is a specific thing you could do with the money that you otherwise couldn't afford but was worth it then do it - eg something like sports or cycling where there are additional costs.  If you were cynical you could regard it as a shot to nothing in that if you life took a different direction you would end up not paying for it.   

£100 a week in 1920s is worth ~£6000 today - if thats not making a difference to your life then you don't need a loan!

grumiofoundation

Voyager2002 said:

DKacha said:

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.

Congratulations on the place at Oxford and earning the support you are receiving.

The time you will really need the money will be soon after graduation and starting work. If you do end up in Finance you are likely to be working in the centre of London and so will need to live in a region where housing is particularly expensive. High rents make it difficult to save up a deposit and hence buy even a modest property. If you are able to save the entire maintenance loan (preferably in a 'help to buy' ISA) and use it as a deposit to buy a home near to your workplace after graduation, the saving on rent  is likely to far outweigh the interest that you will need to pay on the loan.

Agree with the above (with the caveat that help to buy ISA is closed to new applicants so presume talking about lifetime ISA). 

25% bonus on £4000 a year. 

https://www.gov.uk/lifetime-isa

MoonChild91

Honestly, I would take it! There are so many unexpected expenses at uni and you may regret not taking it if something comes up - would you have the spare money to replace a laptop or a bike etc, or for a course trip? There's also the assumption that you'll get a job straight after uni, which might not happen (it took me a couple of months, and put me in my overdraft), and having that cushion may be very helpful indeed!
I took the full loan of £6300 and something, plus the maintenance grant of about £3k on top of that, and did well for money (I never had to work) right up until my 3rd year when I suddenly had to leave my student house and go back into halls and ended up paying 2 rents for a while - I never could have foreseen it, and luckily I managed to get a hardship fund from my university or I would have been in dire straits. You might think you've got everything covered, but in my experience it never hurts to have a rainy day fund! Yes you'll have more to pay back, but having to scrimp and save at university will hurt more than having to pay a little bit extra when you're on a decent wage. 

DKacha

MoonChild91 said:

Honestly, I would take it! There are so many unexpected expenses at uni and you may regret not taking it if something comes up - would you have the spare money to replace a laptop or a bike etc, or for a course trip? There's also the assumption that you'll get a job straight after uni, which might not happen (it took me a couple of months, and put me in my overdraft), and having that cushion may be very helpful indeed!
I took the full loan of £6300 and something, plus the maintenance grant of about £3k on top of that, and did well for money (I never had to work) right up until my 3rd year when I suddenly had to leave my student house and go back into halls and ended up paying 2 rents for a while - I never could have foreseen it, and luckily I managed to get a hardship fund from my university or I would have been in dire straits. You might think you've got everything covered, but in my experience it never hurts to have a rainy day fund! Yes you'll have more to pay back, but having to scrimp and save at university will hurt more than having to pay a little bit extra when you're on a decent wage. 

Thanks for the advice. But supposing the rent is only a third of my bursary income, and the rest has nowhere to be spent except groceries and nights out(though these probably won’t happen now), would you still take on the extra loan burden?

fred246

You need to SAVE the money. Check out the best savings rates on this website. When you leave university and get a job you will need to live somewhere. If you have a deposit you can buy a house. If not you have to rent while you save for a deposit. Some people end up renting into their forties these days. So the money you have SAVED will help you to have a place of your own.

prowla

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.

How is the OP taking the loan relevant to others' loans?

khgreen

Should I take a postgrad loan if I can afford to pay for a masters upfront? I can afford the cost but will have to scrimp maintenance wise. Should I take the loan even though I already have huge undergrad debt and would have to pay masters loan on top of that?