I pay more to student finance loans than my mortgage - and I'm still not covering the interest!

prowla

I think it's disgusting that the boomers had a free education and then decided that the next generation had to pay for the same.

EssexHebridean

How does it get funded though? Go back 40 years, and in most mainstream comprehensive schools, people going on to uni was a real rarity.
go back 30 years and it was still ”relatively” unusual.
Now we have mandatory education until 18, and then the majority are encouraged to think that they should be aiming for university after that too. In some cases it’s seen as a “coming of age” thing and the courses being done aren’t going to have any specific input into future job roles - indeed, you ask a lot of 18 year olds about to go to uni now what they pan to do as a job and they can’t tell you. Education is wonderful, but pretending it doesn’t come at a cost is short sighted, and pretending that further education is something that “everyone” should aspire to is a nonsense. 

Spendless

gingerdad said:

Brone11 said:

I'm a millennial and in the unlucky position of having to repay student loans (a plan 2 (3yrs undergrad) & post graduate loan supporting living costs (originally £6600)). So far I've worked extremely hard and am fairly successful in my career (miles away from a 6 figure salary but "good" for someone under 30 living in the north of England). I currently pay £630 per month to student finance - which is more than my contribution to our mortgage! (a 3 bed semi fixer-upper).

I'm finding that even paying this I'm still not covering the interest payments on my Plan 2 loan and don't understand why the country / government thinks this is fair - especially since all of this student finance money could be going towards stimulating the economy rather than into a loan black hole.

Is there anyway that awareness can be raised to highlight the unfairness of hard working people being shafted by student loan repayments with eye-watering interest rates.  

     
         

Unless you're a very high earner, ignore the balance and ignore the interest rates. it's irrelevant - all you pay is 9% over £27k for 30 years - just bin the statements 

And don't overpay it unless you're a very high earner otherwise you're just giving the government free money -

^^^ This. I said the same to my son, graduated last year, in his first  f-time job connected to his degree.  Not currently earning enough to pay any back. He showed me a calculator where based on his current salary and associated pay increases at the end of the term he will have written off more than he currently owes. He will pay back based on what he earns,  what they write off at the end is irrelevant.    The problem with not going to Uni is some employers now ask for a graduate whereas years ago for the same job they didn't. That's true of local and national chains as well as some professions (eg police and nursing). 

I said at the time they raised fees they'd end up with a huge amount of people having a large amount of student debt  written off - that's something they are starting to deal with from September when the repayment span will be 40 years rather than the current 30.  

TheAble

gingerdad said:

Brone11 said:

I'm a millennial and in the unlucky position of having to repay student loans (a plan 2 (3yrs undergrad) & post graduate loan supporting living costs (originally £6600)). So far I've worked extremely hard and am fairly successful in my career (miles away from a 6 figure salary but "good" for someone under 30 living in the north of England). I currently pay £630 per month to student finance - which is more than my contribution to our mortgage! (a 3 bed semi fixer-upper).

I'm finding that even paying this I'm still not covering the interest payments on my Plan 2 loan and don't understand why the country / government thinks this is fair - especially since all of this student finance money could be going towards stimulating the economy rather than into a loan black hole.

Is there anyway that awareness can be raised to highlight the unfairness of hard working people being shafted by student loan repayments with eye-watering interest rates.  

     
         

Unless you're a very high earner, ignore the balance and ignore the interest rates. it's irrelevant - all you pay is 9% over £27k for 30 years - just bin the statements 

And don't overpay it unless you're a very high earner otherwise you're just giving the government free money -

You're oversimplifying. Suppose you owed 20k and the interest rate was 50%. Would you pay it off then? Pay 9% over £27k on that and you probably will be paying it off for 30 years, at a big multiple of the principal.


Yes I'm pushing the thing to an extreme but there comes a point where the interest rate ought to swing the decision.

Stateofart

HampshireH said:

Your salary must be pretty decent to be paying back £630 a month. And if your mortgage payments are less than this you are very lucky. Repayment rates above threshold are 9% and 6.5%.

It'll be the post grad loan that's kicking up the repayments, they're no way near the rate of the normal loan for under grad courses.

Exodi

Brone11 said:

Am I lucky or have I just worked hard? I'm from a working class background where neither of my parents went to university - so I think the latter. 

Oof, I think this will go down about as well as a fart in an elevator.

If you ask anyone that is relatively succesful whether they think they worked hard for it, I expect you'll be hard-pressed to find anyone that says they didn't.

I have a relatively good job, I feel I have worked hard in my life to get to where I am, but in my bones I know that I have been very lucky. I accept that I don't work harder than all the people working for minimum wage in care homes or supermarkets. The reality is that pay =/= how hard you work, it is one of a whole myriad of various factors, including luck and priviledge. I accept that it's no coincidence that of the 12 directors in the group of companies I am in, all are white males (including me).

It'll also rub people up the wrong way that you appear to be in your 20's earning what appears to be a very high salary, when some people may include time as an element of their definition of 'worked hard'.

Stateofart

prowla said:

I think it's disgusting that the boomers had a free education and then decided that the next generation had to pay for the same.

You have to start charging people when almost 50% of school and college leavers want to go to university, compared to 10% in the 70s/80s

in_need_of_direction

My son was facing similar circumstances and was contemplating a personal loan, shorter repayment period and lower fixed interest.  We had a mortgage neutral fund that we raided to pay off his loan. He now repays us each month.  This works for me as I’m self employed so having a guaranteed amount each month helps especially when struggling to get invoices paid.  

Maybe you could think about some alternative options as I completely agree that the interest being charged by government is unconscionable