Old-style student loans (late-90s)

in Loans
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Hello,

Pleased to join after some tech glitches! I have a question re: 'old style' student loans taken out in the late-90s. Googling this, you get contradictory info:

'Student debt is not like other debt, as anything remaining after 30 years is wiped. ... The interest charged on the loan could make the difference between paying it all off before 30 years, and having debt left at the end.17 Feb 2022', but you also get info which says 25 years. That appears to be for SLC loans taken out when Grants still existed, earlier in the 90s. I'm talking when late-90s, when loans replaced Grants across the board.

I have also seen very alarming claims that these loans - with the Student Loans Company - are only written off once people turn *65*, which would mean they are with you for *40 years*. As far as I'm aware, it is 30 years from the year after you graduate,

Any and all replies welcome.




Replies

  • kaMelokaMelo Forumite
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    What year you started the course, whether you maintained taking the course continually or took a break all determine what happens with student loan repayments and write off dates.
    Each case is specific to that person, without a full picture no one can give specific advice.
  • There was a cross over of mid-90s when it was 30 years, the one I went on (starting in 1999) is not wiped until 65, that is the terms of the loan, nothing you can do. Flip side is that the interest is much lower, I think mine has been 1.1% for 2-3 years, it's 1.25% I think now. I don't lose much out of my payslip every month and I think it will maybe be paid off before I am 65, depends on future pay rises and future interest rises
  • Thanks Farfetch, I was only trying to get a general picture, and am talking from 1998 on KaMelo. To your queries: I did it in three years and did not take any breaks, graduating in the early-2000s. I know all about earnings thresh holds and have earned at them, slightly above, under and not at all - no income and unemployed off and on. 

    So obviously I mean re: these late-90s loans being written off, that means should I and others who may not have paid it all off 'after 30 years', since life is unpredictable and standard 9-5 employment and 'a job for life' is not the reality for everyone. Steady upward career progression (promotions) and higher earnings likewise.

    "Each case is specific to that person", yes but not in the broad sense I mean, which is applicable to anyone who graduated after/before a certain date and which sort of loan they had/have.

    It is quite contradictory to see "written off after 30 years" in relation to post-1998 loans then to see 65, which makes it 40 years, not that that would have put me off or I would have cared in the slightest tbh. 23-24 years later that remains the case, I'm just curious.

    Farfetch, we were 'born at the right time' considering undergraduates have graduated with 50-70k since 2011 or 2012 and at punishing commercial intertest rates, so factor in bank loans and 100k debt for life is not hyberbolic.

  • kaMelokaMelo Forumite
    1.8K Posts
    1,000 Posts Fourth Anniversary Name Dropper
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    I understand what you mean and agree there is a general picture but it can change dependant upon circumstances and which nation of the UK you're from.

    In England anyone who started a course pre. September 98 and continued the course without break, their loans are all treated as pre 98 loans even they were taken post Sept. 98. These have a variety of write off dates.
    Aged under 35 when starting your course, the loans are written off after 25 years or when you turn 50 whichever comes first.
    Aged 35 and above when starting your course, the loans are written off when you turn 60.

    Should someone have taken a break for some reason and then returned to complete their course it could result in loans that are pre and post Sept 98 as any loan taken after a break from the course would fall under the rules at that time, if post Sept 98 but pre Sept 2005, AKA Plan 1 loans, then they are not wiped until age 65. Plan 1 loans taken post Sept 2005 until Sept 2012 are wiped after 25 years from the April you would be required to start paying it back.

    Sept 2012 onwards, AKA plan 2 loans, are wiped after 30 years from the April you would be required to start paying it back.

    As you can see there is a whole variety of write off dates, ranging from 15 to 44 years with the majority somewhere in between.
    All have their own earnings thresholds and interest rate calculations, as to which is the least onerous I'll let you work that one out. :)
  • Thanks Farfetch, I was only trying to get a general picture, and am talking from 1998 on KaMelo. To your queries: I did it in three years and did not take any breaks, graduating in the early-2000s. I know all about earnings thresh holds and have earned at them, slightly above, under and not at all - no income and unemployed off and on. 

    So obviously I mean re: these late-90s loans being written off, that means should I and others who may not have paid it all off 'after 30 years', since life is unpredictable and standard 9-5 employment and 'a job for life' is not the reality for everyone. Steady upward career progression (promotions) and higher earnings likewise.

    "Each case is specific to that person", yes but not in the broad sense I mean, which is applicable to anyone who graduated after/before a certain date and which sort of loan they had/have.

    It is quite contradictory to see "written off after 30 years" in relation to post-1998 loans then to see 65, which makes it 40 years, not that that would have put me off or I would have cared in the slightest tbh. 23-24 years later that remains the case, I'm just curious.

    Farfetch, we were 'born at the right time' considering undergraduates have graduated with 50-70k since 2011 or 2012 and at punishing commercial intertest rates, so factor in bank loans and 100k debt for life is not hyberbolic.

    Yes and no, there are plus and minus for each scheme. The graduates today may have 30-50k but the money is not expected to be repaid until they earn 27k or so (going to be 25k soon) and is written off sooner (30 years after higher education start date) so while the interest rate is higher, many people who do not earn significant sums will never pay anything. Mine was deducted as soon as I hit £15k i.e. my first job and it was increasing for 15-16 years, I only hit a threshold where I was paying back more than interest was going up 3-4 years ago and even then only because they changed the process that it comes off monthly rather than being added on at the end of the year and because interest was so low. I think it will be close to 65 based on student loan repayment calculators but if interest goes up to say 2-3% and I don't get a decent pay rise annually, it could start increasing again.
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