Student Loan - never debt free?

PinkGrapefruit_2

Hi,

I was just wondering how people with student loans feel about them.

Basically I've had mine nearly 10 years (the "new" style they introduced 10 years ago) and because I've always earned a low wage Ive only paid off about £400 (I'm currently just under the threshold and not paying anything). My total loan is around £16,000 so my repayments don't even cover the interest. Assuming I don't win the lottery or get a massive payrise I will never pay the whole lot off. The thought that I will never actually be debt free is kind of depressing. I'm currently trying to pay off my overdraft and then I will consider myself "debt free" as I know I will never be chased for my student loan or made to pay it if I'm not earning enough but am I kidding myself not considering this a real debt. Sorry if this is rambling just wanted to know what other people think. :rolleyes:

Cheekythellis

I know what you mean about it being a bit depressing, I graduated 04 with 19k student loan, last year was up to 20.5k I think, until last year I wasn't earning enough to pay it back and now I pay around £45 per month, which doesn't cover the interest. Initially I wasn't too bothered, and Martins advice on student loans made me think I shouldn't rush to pay it off. But on the other hand, if I don't pay more of it off, then 7% of my salary will be going towards it probably for the rest of my working life, and theres a good chance that those payments will never pay it off. I guess after much deliberation I would rather pay other debts/save for house deposit/pay off mortgage than prioritise the student loan, and just see the loan as a kind of graduate tax that I will effectively be paying for the rest of my days, which is a bit depressing, but on the other hand PinkGrapefruit it could be worse, the debt could be with a high st bank with a higher interest rate and we would have to pay it then! So to answer your question, I personally don't see it as real debt, but thats not to say its the right attitude to have x

Billy_two_speakers

Its not really a debt, it a big bill your left with because labour and co messed up. I would count myself as "DEBT FREE" if all I owed was student loans.

after so many years its written off,and it reality should never have been charged.

PinkGrapefruit_2

I like your "graduate tax" thinking, and you're right it could be a much worse debt. I can't see myself opting to pay off more than I have to, I'd rather save any spare cash I have towards getting my own home or car...eventually!

Broken_hearted

As I'm never going to pay mine off I don't even count it as a debt.

PinkGrapefruit_2

Thanks Billy two speakers, that makes me feel a bit less naughty for not counting it as a real debt. Unfortunately I just missed out on the older grant scheme, I think I started Uni the same year they introduced the new style student loans, oh well.

MORPH3US

As above, I don't consider it a debt... in fact i like the "graduate tax" post, I like it a lot....

Like someone above said, if you lose your job, no one will chase you for the money so no worries!

I don't think i'll ever pay the amount borrowed off, never mind all of the interest that they whack on top.

M

Billy_two_speakers

PinkGrapefruit wrote: »

Thanks Billy two speakers, that makes me feel a bit less naughty for not counting it as a real debt. Unfortunately I just missed out on the older grant scheme, I think I started Uni the same year they introduced the new style student loans, oh well.

Your not naughty, your being charged for being educated something already paid for by taxes ? you have no choice but to pay for the education you need want but with good planning you might not have to pay it all back

Idiophreak

You do just start to think of it as "just another tax" - another bit of money that's nicked off you every month for the rest of your life.

Thankfully I'm starting to earn enough now to actually make a dent in it - might be paid off in ten years.

Also worthy of note, however, that if you are bothered about paying it off (it is, afterall, real debt...it's still money you've borrowed from someone for something you wanted, at the end of the day), there's nothing to stop you paying it even though it isn't coming out of your wages...can always write the SLC a cheque each month...

jetfighter

Thanks for this post, as I have been having the same dilemma for a while.

We have a mortgage so I'm concentrating on getting that paid off first, but I do often wonder whether I will want to start paying off my student loan once the mortgage is gone. I'd be more inclined to follow Martin's advice of not paying it off until you have to, though. Is this the right attitude to have? Not sure.

I would like to be able to think of myself as debt-free once the mortgage has gone, but this student loan will always be hovering over me. At the moment I don't earn enough to pay it back - I'm just under the threshold. (Though one month I did a couple of hours' overtime and they took £6! :rolleyes:)

I like the idea of it being like a graduate tax. Maybe I'll pay it all off one day if I get a huge inheritance from somewhere. :rotfl:

Would YOU pay off your student loan if you suddenly came into a lot of money - or would you still leave it unpaid for as long as possible? I guess that's the real dilemma - it makes sense to clear all debts first, and to avoid paying it for as long as possible if you have a small income or other responsibilities, but what about if you're loaded?

I think that for my own peace of mind, if I could afford to make a big enough dent in it, I would probably overpay or pay it off if I could - but only if I didn't need the money for anything else!

flutterbyuk25

I don't class mine as a debt - its about £8500. I only pay £15/month off it so it ain't never gonna be paid off! I'm not bothered by it, like other poster said, they aren't gonna come knocking for it!

x