Advice on having 3 x Student Loans

kellyweb

Hi everyone
I am looking for some advice.
My daughter is about to take on her 3rd Student Loan for a 2 year Occupational Therapist course , this is on a Plan 5.
She already has a plan 2 loan + a Post Graduate Loan.
From what I've read it seems that she will have 3 different threshold figures, the plan 2 and Plan 5 each loan requires a 9% repayment once the threshold trigger salary is reached, whilst the Postgraduate loan is a 6% repayment but on a lower threshold.
The Plan 5 loan is payable over 40 years, whilst the other ones are over 30 years. It looks like she will be heavily burdened with debt once she starts to earn some money. 
Is there any simple advice about which loan to try to pay off first ?
Cheers
Kellyweb

Brie

Check the T&Cs to see if she gets a choice.  I thought that all loans would be paid at the same time.  

silvercar

 My understanding (happy to be corrected) is that she would pay 9% towards the plan 2 and plan 5 loans combined, with the payment going towards the loan with the lower threshold being the amount between the thresholds and the remainder to the one with the higher threshold. Additionally she would pay 6% towards the post grad loan. So the total won’t exceed 15% of salary above the thresholds.

kellyweb

silvercar said:

 My understanding (happy to be corrected) is that she would pay 9% towards the plan 2 and plan 5 loans combined, with the payment going towards the loan with the lower threshold being the amount between the thresholds and the remainder to the one with the higher threshold. Additionally she would pay 6% towards the post grad loan. So the total won’t exceed 15% of salary above the thresholds.

Thank you Silvercar - paying 15% of salary above the thresholds seems much more appealing than 24%. Any idea where I can get confirmation of how it works ?

kellyweb

Brie said:

Check the T&Cs to see if she gets a choice.  I thought that all loans would be paid at the same time.  

Brie said:

Check the T&Cs to see if she gets a choice.  I thought that all loans would be paid at the same time.  

Brie said:

Check the T&Cs to see if she gets a choice.  I thought that all loans would be paid at the same time.  

Hello Brie - Thank you for getting back on this. 'Silvercar' thought that the repayment would not be above 15% as the plan 2 & 5 loans would be combined [so that only 9% of the lower threshold is repaid].

silvercar

kellyweb said:

silvercar said:

 My understanding (happy to be corrected) is that she would pay 9% towards the plan 2 and plan 5 loans combined, with the payment going towards the loan with the lower threshold being the amount between the thresholds and the remainder to the one with the higher threshold. Additionally she would pay 6% towards the post grad loan. So the total won’t exceed 15% of salary above the thresholds.

Thank you Silvercar - paying 15% of salary above the thresholds seems much more appealing than 24%. Any idea where I can get confirmation of how it works ?

Straight from the .gov website!

https://www.gov.uk/repaying-your-student-loan/what-you-pay

Pertinent sentence: "You’ll repay 6% of your income over the Postgraduate Loan threshold (£21,000 a year) and 9% of your income over the lowest threshold for any other plan types you have."

kellyweb

silvercar said:

kellyweb said:

silvercar said:

 My understanding (happy to be corrected) is that she would pay 9% towards the plan 2 and plan 5 loans combined, with the payment going towards the loan with the lower threshold being the amount between the thresholds and the remainder to the one with the higher threshold. Additionally she would pay 6% towards the post grad loan. So the total won’t exceed 15% of salary above the thresholds.

Thank you Silvercar - paying 15% of salary above the thresholds seems much more appealing than 24%. Any idea where I can get confirmation of how it works ?

Straight from the .gov website!

Pertinent sentence: "You’ll repay 6% of your income over the Postgraduate Loan threshold (£21,000 a year) and 9% of your income over the lowest threshold for any other plan types you have."

Thank you Silvercar - It seems that if my daughter borrows her maximum on the Plan 5 loan [and with help from us her parents] she can pay off the Postgraduate loan and just keep the Plan 2 and Plan 5 loans so will only be paying 9% above the threshold limit [but for 40 years]  - rather than 6% + 9%. Thank  you for your advice. Cheers Kellyweb