Possibility of SLC paying students?

TCJYork

Although I very much hate the doom-mongers who insist that there will be a recession, should this be the case, and inflation actually become deflation, would the SLC actually start paying us money, as the interest rate is tied to inflation.

Just a strange situation that got me thinking this morning...

Willowx

They would not pay you money as such although the amount you owe should go down.

CLAPTON

don't know the answer but even in deflationary times I can't recall a time when inflation actually was negative.

With the price of fuel, elect/gas, food all set to rise I very much doubt that there's any chance of inflation going neagative.

Sol00

No, as the amount of interest due for repayments is re-assessed every September based on the RPI.

CLAPTON

Sol00 wrote: »

No, as the amount of interest due for repayments is re-assessed every September based on the RPI.

The question is 'what if the RPI is negative?'

Sol00

CLAPTON wrote: »

The question is 'what if the RPI is negative?'

Yes I know and I said it was reviewed every September based on what the current rate of inflation is, which is based on the RPI.

CLAPTON

Sol00 wrote: »

Yes I know and I said it was reviewed every September based on what the current rate of inflation is, which is based on the RPI.

so if the RPI was negative inflation, would the government pay money back to the students loans?

channy

CLAPTON wrote: »

so if the RPI was negative inflation, would the government pay money back to the students loans?

inflation is what the money now is worth in the future, so no. what we pay back isn't really profit for the government or slc. if its negative, then what we owe is just less. they dont pay anything out.

students moan about the inflation, but if you lent me £1000, would you still want the same amount back in 10 years time?

think about school dinners - back in primary school, i remember they were £1/day but now its like £1.70/day. its natural to have inflation in a steady growing economy, but we also need it controled.

if we want "sensible" inflation though, id suggest it should be variable by month and not year or some kind of average of the year because this years inflation rate was 4.5% which was a figure from one month and was quite a jump from 2.4%.

Gemmzie

I thought it was decided in March not September

Sol00

Gemmzie wrote: »

I thought it was decided in March not September

It is for the financial year, but the loans aren't changed until September.

Bamber19

Gemmzie wrote: »

I thought it was decided in March not September

Yes, they use the March-March RPI figure.