Should I Pay Off My Student Loan? 2008/09 article discussion

steiner_2 · 1 September 2008 at 6:38PM

No i'm still under the threshold but because i never told them this (i wasn't aware i had too)the student loan company has passed the debt to a company called credit solutions...they want me to pay £200 a month. The student loan company are now saying this nothing to do with them. To pay £200 a month completely out of the blue is a big shock particulalry with two young kids and prices for food going the way they are.

Gemmzie · 1 September 2008 at 8:23PM

Question for a friend. Started 2007 so new loan system, going into their 2nd year in a couple of weeks. They already earn around £15k so should they be paying off their loan already? Or does it wait until the end of the course?

Chris2685 · 1 September 2008 at 10:45PM

Repayments don't start until April the year after your course ends.

For example, mine Ended this year, 2008. I will start paying my loan back in April 2009.

Oldernotwiser · 2 September 2008 at 6:52AM

steiner wrote: »

Hi

I'll start off with a background story

Went to Uni for 5 months in 1995
had a bit of a bad time in the mid 1990's
settled down small family mortgate etc etc
totally forgot about the £1000 student loan but was vaguley aware i didn't need to worry because i was not earning enough to go over the threshold.

Today letter arrives from collection agency for my student loan.
Student loan company have said to me when i phoned them this morning, that I should have declared back in 2002 what my wages are. I explained I wasn't aware of this because i had not recieved any corrospondants
and they said I should of informed them of moving address and that it was my own responsibiltiy. They said their was nothing I could do and that i was stuck with the £1900 debt even if I was still under the threshold for actually repaying it.
I feel really annoyed because I would of dealt with this in 2002 if a letter had arrived.
If anyone can offer any advice it would be really appreciated.

You can try to make an arrangement with them but as you haven't deferred you are now in arrears and the normal rules for repayment don't apply. It was your responsibility to notify them of changes of address so that the deferrment forms could be sent out. Sorry.

jgn_1982 · 2 September 2008 at 12:53PM

Thanks for the helpful posts on here - they have definitely made things much clearer.

One thing I find frustrating is that I was on 19k in my first job out of uni for around 2 years. In those two years I paid £40 a month and was shocked when my SLC statement came through and for both years the £40 payment has not covered the interest and my student loan is actually getting bigger by £200 a year despite paying £500 in - my loan is around £12k. Words cannot express how frustrating that is !! Has anyone else experienced this as at first I was convinced it must be a mistake ?

I have since got a new job and pay £67 a month, on rough workings my debt will now decrease around £200 a year give or take on interest.
Basically I have to accept that for the rest of my life I will be paying 9% of my wage over £15k - I accept I have benefited from the money but I think there must be a more reasonable way of repaying student loans. My advise to anyone from a financial standpoint would be just go to uni nearest home and live there - it is never explained to you what a financial burden a student loan is until your out and you have to face the reality of it.

Chris2685 · 2 September 2008 at 12:56PM

You can always contact them and ask them if you can repay more, or a lump sum as and when you can. This would reduce your loan amount, and reduce the amount of interest charged.

jgn_1982 · 2 September 2008 at 4:04PM

Thanks for your advice - but think I would rather just stay as I am for the rest of my life

Oldernotwiser · 2 September 2008 at 4:57PM

jgn_1982 wrote: »

Basically I have to accept that for the rest of my life I will be paying 9% of my wage over £15k - I accept I have benefited from the money but I think there must be a more reasonable way of repaying student loans. .

What would you suggest?

The_One_Who · 2 September 2008 at 5:10PM

jgn_1982 wrote: »

it is never explained to you what a financial burden a student loan is until your out and you have to face the reality of it.

Yes it is. The terms and conditions of the loan are there for you to read.

jgn_1982 · 2 September 2008 at 5:22PM

Well I dont think its right that the loan increases post uni for students who earn above £15k but dont earn enough to cover the interest so you are paying each month but the total owed increases.
For instance someone who was to earn 19k for their life - perhaps they do some kind of voluntary work that gives them greater satisfaction than chasing money - would pay £800 a year and but by the time they retire the 12k debt is probably over 30k

I think once you earn over 15k you should begin paying it off interest free and do so until your salary reaches the point where the 9% above 15k covers the interest charges and starts to make a small dent in the loan (guess this would be around 22-23k).

And I know as already mentioned you can increase payments but who earning 15k a year can afford to volunteer away more of their money !!!

Im sure the above will get pulled to pieces, im no financial expert, but I just think there must be a better way of doing things - and their are smarter ppl to decide how than me.
At the end of the day we should be encouraging people to go to uni and making the loan repayments as friendly as possible - it is after all supposed to be a long term investment into the economy.
For one thing a good starting point will be a better level of communication between the students - I feel lead up the garden path with regards to my loan but then I guess it was my responsibility in the first place to look more into it so i am partly to blame.

Should I Pay Off My Student Loan? 2008/09 article discussion

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