Pay Student Loan or Save for Mortgage?

Doozergirl

BD1871 said:

Thanks everyone. I will work on trying to get her to see the light...!

If anyone can, Martin can.  Show her what he says.  There's probably video somewhere as well as the article.  

london21

Personally, will get a property and pay the sudent loan gradually.
The student loan is not like a bank loan that they will chase you just like tax payment.
But will be hard to change your gran's mind.

SusieT

Try calling it a student grant rather than a loan. That may be easier for her to understand if she is thinking of it in the same way as a consumer type loan if she does not understand it. 

saajan_12

steampowered said:

There is no situation in which you are better off paying the student loan instead of using it as a house deposit. Money on a mortgage is money which you have to pay back, and must pay back even if you fall on hard times. Money on a student loan is money which you will probably never have to pay back in full, and will not pay back at all if you fall on hard times. 

Your grandmother probably just heard the word "loan" and doesn't understand how student loans work. 

We need to be careful of making sweeping statements. Fully agree with the calls to rename "student loans" improving understanding of how these actually work. However there absolutely are situations where it is better to pay off the loan. 

Medium - high earners may earn enough to pay the loan (or at least > 70k) over the 30 years, meaning you're paying a bunch of interest. Particularly for the new post 2012 loans, the rate is far in excess of mortgage rates (RPI + 3%). So each person should look at their particular expected earnings, and decide what makes most sense.