Wanted: reassurance that a student loan will stay collected as a tax on income

My niece is going to university this coming year. My brother in law asked me if he should pay the fees up front, using up most of his life savings, as he was worried that the terms of the loan could be changed such that assets could be seized to pay off the debt. I am aware I can’t point to a guarantee that terms won’t change, as it says they can (and they have in the past with repayment threshold changes).  But I reason that such an enormous change from it being a “special” loan that can only be collected from earned income to a “normal” debt is highly unlikely. I also reason that there are a lot of students (including law students) out there with these plan loans and that hopefully they would work to get such a change overthrown. Can anyone comment on my reasoning and add any more reassurances so I can recommend he doesn’t leave himself having to work into old age.


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  • Grumpy_chap
    Grumpy_chap Posts: 14,345
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    Cark2 said:

    My niece is going to university this coming year. My brother in law asked me if he should pay the fees up front, using up most of his life savings, as he was worried that the terms of the loan could be changed such that assets could be seized to pay off the debt. I am aware I can’t point to a guarantee that terms won’t change, as it says they can (and they have in the past with repayment threshold changes).  But I reason that such an enormous change from it being a “special” loan that can only be collected from earned income to a “normal” debt is highly unlikely. I also reason that there are a lot of students (including law students) out there with these plan loans and that hopefully they would work to get such a change overthrown. Can anyone comment on my reasoning and add any more reassurances so I can recommend he doesn’t leave himself having to work into old age.


    No-one can guarantee anything in this regard - certainly not with the definitive status you seek.
    Student Loans - indeed student finance in total - are all down to political decisions.

    That said, I'd be surprised if the basis of repayment changed in the wholesale way you suggest for students that have already embarked on their studies.
    I would expect that there will be regular adjustments as to the threshold for repayment, interest rate, and the  percentage of salary payable above the repayment threshold.

    There may be future changes in principle as to how  student financing is structured.
    I'd be surprised if the funding ever reverted to the straightforward grants of yesteryear.

    Others may have different thoughts.
    I've not seen anything reported in the press about wholesale changes to the student loan basis.  
    On balance, your Niece should probably just go to University, enjoy the experience and come out the other end enriched to the better.  Hope she has a whale of a time :)
  • silvercar
    silvercar Posts: 46,703
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    Very unlikely that assets could be seized to pay off the debt. Particularly retrospectively for existing students. The courts are already overrun, even if a government made the incredibly unpopular decision to do so, it wouldn't be manageable.
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  • Emmia
    Emmia Posts: 2,917
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    I'd only probably expect changes at the income threshold that the loan becomes repayable at - many moons ago, the threshold for my repayments was earnings of £10k p/a, but a few years in it shifted to £15k, this reduced my monthly payments, but as a result it took me a little longer to repay the loan. 

    But, there are no guarantees as to what may or may not happen under future governments.
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