The con of the Student Loan

Sol00

The Student Loans Company employ a company to trace you if you are not at the address you gave. They add charges on to your debt, so it's not advisable.

Lokolo

Savings give interest and interest count towards income, so technically yes you should but its likely to be very little difference.

Helix

Or if you put it into an ISA then you don't have to declare the interest either.

The_One_Who

fadeaway wrote: »

so is the intrest only counted towards paying of your student debt so techinall you could have millions in the bank and they would only count the interest.

The interest for millions of pounds would be more than £15,000. Although, you could probably employ an accountant to wangle it for you so you didn't have to pay anything.

Lokolo

fadeaway wrote: »

so is the intrest only counted towards paying of your student debt so techinall you could have millions in the bank and they would only count the interest.

No-one would have millions in the bank, they would have it in property or investments

UnluckyPerson

the only people that fully understand that student loans is a con, are the ones with student loans themselves. My brother earns £18,000, student loans company have been charging 4.8% interest per annum, today he recieves a letter from his employers that his wage has increased by only 2.5% as a result of inflation. NOw if he continues to pay student payment on this wage for the rest of his life he will never pay it off, as he will be paying half the interest per annum.

Since he got student loans before 2006, his debts wont clear till hes 65, while students who took student loans after 2006 will get their debts cleared within 25 years.

he took student loans thinking that the rate of inflation will be 2.5%, now its double thats very close to a mortgage.

Its bull!

current interest 800 pounds per annum, cant get on the property ladder. University is not worth it imho,

The_One_Who

Considering that it is the lowest interest rate you'll get anywhere I'd say it is still a good deal.

melancholly

i think you have to look at this longer term - with a degree, it is very unlikely that your brother's wage will remain at £18,000 for the rest of his life. as it goes up, so will his repayments.

the SLC only charged 4.8% last year - it's linked to inflation and last year was a big hike from 2.4% the previous year. it will go back down, his payments will go up and by getting the loan he was able to go into further education. without the loan system people wouldn't have that opportunity. whether university is a good idea for everyone is a separate issue (and getting on the property ladder very early into a career can actually do more harm than good as it means you are not at all mobile when looking for jobs) - you can focus on the good or the bad about student loans, but the balance is that they are a great means of giving access to education for all and it is the cheapest debt you will ever get in your life, with the most amazing repayment terms.

someone

I think the problem is it looked good on paper but now people with higher fees are starting to start work situationist like UnluckyPerson's brother makes you think twice.

While yes, its a good rate, many see it as been unfair. Most people are "forced" to take the loan as they can't pay the fees first. They are there for at the mercy of the goverment who use whatever inflation number they think looks better (hear someone from the gov the other day on TV saying at inflation is still under 3%).

Also, the numbers in the sort term don't add up. They take the inflation of May which shows how much prices have gone up in the past 12 months. In September they are just not relevant.

Personally I would be happy with a graduate tax, flat rate of 1% of all income if you hold a degree that was payed for by the government. The money to be ring fenced for HE use only.

There is the argument that if you have a degree you will earn more, so therefor you pay more tax anyway

someone

Also, what would happen if hyper inflation occurred?