Plane 2 student loan when to pay.

vvvgo Posts: 14
First Post
edited 17 March 2023 at 9:27AM in Student MoneySaving
I know Martins guide suggests that for most people it's not worth paying off the student debt as they'll never pay it off.

I want to understand what the threshold is for considering worth of paying it off. Like what combination of monthly student  loans repayments, years left and student debt size makes paying off all or some of the loan worth it.

My stats:
Course start 2012 (plan2)
First year repayment 2018
Debt size 2023 £54k
Years left 25
Monthly payments ~£280-£300


  • vvvgo
    vvvgo Posts: 14
    First Post
    Plan* in title but I don't know how to edit the post , silly phone autocorrect 
  • DrEskimo
    DrEskimo Posts: 2,333
    First Anniversary Name Dropper First Post
    It's hard to determine precisely, as it requires a lot of assumptions about future interest rates and earnings.

    There is a calculator you can use to try and determine how much you would repay and over what period:
  • vvvgo
    vvvgo Posts: 14
    First Post
    Thanks for the suggestion, Ive tried using it before but I suppose, I don't really understand some of the toggles. Moreover I was wondering if there was a way I can use my current situation to refine the calculations to understand better if whether or not I should pay.

    For example rather than thinking my salary will rise x% every year from 2017 I kind of already know what it is now with fewer years than 30 with a higher loan value, can I use this refinement.

    Ofcourse there's still going to be assumptions, but I was a bit sceptical about what the tool assumed of what my final salary would be (claiming in the 150k+)

    I suppose the tool makes with lots of assumptions around gradual salary increase from a starting salary, which I guess I'm looking to fine tune.

    I wanted to try understand earlier before I start to increase the value of the loan.
  • vvvgo
    vvvgo Posts: 14
    First Post
    Also I'm by no means any economics expert but I can push numbers on a calculator. That being said im happy to understand stuff about why it's a better not pay it off in layman's terms.

    It "feels" wrong to let the debt pile but at the same time I can't understand if it's smart or not to pay it off sooner or pay some portion of it.
  • silvercar
    silvercar Posts: 46,732
    Academoney Grad Name Dropper Photogenic First Anniversary
    You are trying to predict the future, which is impossible with the accuracy you want.

    Basically it boils down to a balance between whether you expect your career to be continuously (very) high paying and long - which would favour repaying earlier against what else you could do with the money that may be more beneficial eg home deposit, investment etc

    Even if the numbers made sense looking at your student loan alone, if the savings you have could be used on a home deposit where your costs would be far cheaper than renting in the long term, then clearing your loan wouldn’t make sense.

    This post would be better on the student board, where you can also read similar discussions. I’ll ask the forum team to move it over.
    I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to [email protected] (it's not part of my role to deal with this). Any views are mine and not the official line of
  • vvvgo
    vvvgo Posts: 14
    First Post
    What is a 'very' high salary in current day terms? Like even broad numbers.

    Ultimately I don't know if I fall into that or what to do if I get pay rises and start to fall into it in the future, does the size of debt just mean it becomes not worth paying in the future?

    In the guide Martin mentions it's worth looking into if it's worth repayments for you but doesn't exactly say when to consider it (probably because it's hard to generalize). I imagine in current day money it's a relationship between the size of debt and salary. That the kind of thing I was looking for, like is there a threshold I fall below or above 
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