Student loans

Nikiig

Forgive me this not a strong point of mine so I may be a bit slow on the uptake! My son has 26K of student debt to pay off (didn't even complete his degree....). He is an estate agent (sorry) so his basic salalry is low but the commission is sometimes quite high so some months he's really hammered with the student loan. Would it not be better for him to get a low-interest loan and pay the student loan off????

[Deleted User]

Only if you think he's definitely going to pay off the whole loan.

But 26k is a large ask for a personal loan, especially if his base salary is low.

DrEskimo

What student loan plan is he on? Plan 1 or plan 2?

Generally, the answer is no. Even with a plan 2 loan with higher APR, the student loan is preferable as you never pay more than 9% of your income over the threshold. If your son was to stop earning, they wouldn't have to pay anything towards it. It is also written off after 30yrs.

In contrast, a personal loan will need to be paid in full every single month without fail. It would count as additional borrowing and affect other lines of credit, and will always be with him until repaid in full.

Finally, if he is on a low wage it is unlikely he will be able to get a £25k+ personal loan, let alone at a good APR.

BrunoA

Student debts is a huge problem for our country. I'm thinking about a cheaper education in other country for my son.

skydiver2

Hello
Can someone please explain how they calculate the monthly interest rates on a student loan? I've looked on the Student Loan and the Gov website but no information! Its my daughters student loan and on the statement some months it is shown as £31.04 next month £32.11 month after £31.13 etc. etc... I'm just trying to get a grip on how they calculate it! Any help would be appreciated. Many thanks

[Deleted User]

It's calculated on the daily balance. Months have different numbers of days in them, hence the variation.

Almy1

Hi my brother is studying for his masters at the moment. However he now wants to drop out of his course after 2 months as the university is not providing enough support as the course is now all online. He has had the wrong timetable and this has caused him to miss many lectures however the issue atm is that if he drops out of university they are saying they will charge him the full fee. However I don't get this as the course is all over the place and he is not the only person complaining. I would be grateful for any advice on this issue.

Shakin_Steve

Almy1 said:

Hi my brother is studying for his masters at the moment. However he now wants to drop out of his course after 2 months as the university is not providing enough support as the course is now all online. He has had the wrong timetable and this has caused him to miss many lectures however the issue atm is that if he drops out of university they are saying they will charge him the full fee. However I don't get this as the course is all over the place and he is not the only person complaining. I would be grateful for any advice on this issue.

My son is also doing a masters at Sheffield uni. I don't understand what you mean by the wrong timetable, all of my sons lectures are online and he can view them whenever he likes. Even when lectures were in an auditorium they were recorded and made available online. He actually prefers to do it that way as he can learn at his own pace and pause a lecture whenever he pleases. Lecturers are always available for a chat.......online, of course.

He is also in touch with a professor who is supporting him in his bid for a PhD next year. Again, online. I don't know which uni you are talking about, but your brother needs to make use of any support available, and complain, not quit, if he feels he is being overlooked. In my opinion, it would be foolish of him to drop out at this stage. Has he contacted the student union?

skydiver2

Deleted_User said:

It's calculated on the daily balance. Months have different numbers of days in them, hence the variation.

Hi ZX81
Thanks for reply;  however, I have tried several math combinations and I can't get the answer that they come up with! I take it you Take the daily balance multiply be interest payment which is 1.75% then ........?

anto164

skydiver2 said:

Deleted_User said:

It's calculated on the daily balance. Months have different numbers of days in them, hence the variation.

Hi ZX81
Thanks for reply;  however, I have tried several math combinations and I can't get the answer that they come up with! I take it you Take the daily balance multiply be interest payment which is 1.75% then ........?

Where do you get 1.75 from? Current plan 1 rates are 1.1pc, and plan 2 start at something like 3.5pc.

As for the maths, as a n estimate, divide the interest rate by 365, then multiply it by the balance. E.g £25k debt @ 1.1% = £0.74 interest per day ish, but dont forget its compound interest too!!