Should my daughter pay off student loan with lump sum?

pete-20-11

MalMonroe said:

There's some great info here : 
https://www.ucas.com/student-finance-england/repaying-your-student-loan

Did you see Martin's programme on Thursday 11 March? Lots more great information all about student loans. You can catch up on YouTube (no ads) or even the ITV hub.

Your daughter is doing the right thing. 

As Martin is fond of saying, there is no panic with student loans. No repayments will be due until the April after your daughter graduates. But only IF her salary is at or above the repayment threshold.

She's right when she says the loan will be written off after thirty years, unless of course she's been earning over the repayment threshold. 

The interest rate on a student loan is 9%, which isn't extortionate at all.

No, that’s the percentage of salary you repay, over the threshold, not the interest

the interest rate is 1.1% on plan 1 and on the newer plan 2 loans it’s currently 5.6% whilst studying and between 2.6% and 5.6% after (depending on salary)

https://www.gov.uk/repaying-your-student-loan/what-you-pay

MallyGirl

It is definitely worth having a play with the ready reckoner :
https://www.moneysavingexpert.com/students/student-finance-calculator/

luckbox

Give her the 20k after she has graduated to be used as a house deposit. That will be of far more benefit to her future than avoiding the graduate tax

David_Rowley

Thanks everyone for your comments