Guide discussion: Should I repay my post-2012 student loan?

Does anyone else find it seriously disturbing that Corbyn said this (below) on the Andrew Marr show.

“There is a block of those that currently have a massive debt, and I’m looking at ways that we could reduce that, ameliorate that, lengthen the period of paying it off, or some other means of reducing that debt burden.

http://www.independent.co.uk/news/uk/politics/jeremy-corbyn-labour-student-loans-debt-manifesto-pledge-amnesty-cancel-tuition-fees-a7856161.html

Lengthen the period of paying it off? That would make things worse for students not better. He clearly has no understanding of the SL system. And he wants to be PM. Hummmm.

Sampson1994 wrote: »

I currently have £7000 student loan debt, I earn £23000 but will rise up to £40000 within 7 years. Should i pay off my student loan in bulk? I'm currently on Plan 2.

I assume you are in your 20s. As your loan is pretty small, you are going to end up paying it all off fairly quickly anyway, at 9% per year on your salary above 21k. If you know what your salary is likely to be, you can work out how long it will take to pay it off (and what rate interest you will be charged each year until then).

Then, you need to work out how much earlier you could voluntarily pay it off and then decide the best use you could make of the money if you hang on to it as long as possible. If it would earn you less than the extra interest you incur by waiting, then best to pay it off early. If you have a car loan, on which you are paying 5%, probably best to pay that off instead. If you would otherwise not use your £4k LISA allowance, you may be better putting the money in a LISA and getting the 25% uplift, plus the return on the LISA savings/investments.

Also bear in mind how sure you are about your future salary. Can you rule out losing your job or not working?

Surely the Head of Maths, without needing a prompt from Head-teacher or anyone, should explain, like Martin, to all students in the first term of year 11 how student loans are not to be terrified of. With the opportunity to ask questions of a teacher you know and, presumably, trust, this would surely settle any jitters a student (or 'pupil, in my ancient terms) might have.

BoxerRules: I graduated just before you started and the big difference from our day was that no-one, at least that I ever knew, went to uni with financial advantage in mind; you went to follow your intellectual interests (and for the 'fun' you expected to have). Uni choice was by their intellectual reputation; there were no comparison 'Guides' to how much graduates of each earned. 'Career' requirements only affected a minority, such as medical students. (Want to be a top civil servant? - Do Classics, so useless, except as a demo of intellectual ability.) I went to become fluent in all aspects of my 3 foreign languages (+ the fun). I knew they would give me a choice of interesting (chance to travel) and steady jobs, not necessarily with very high pay. There were no grants when I was 18 in 1959, and uni was still for the class that could afford to pay their children's tuition and all the living (inc 'fun') expenses of escaping to different surroundings. However because uni in France was a free entitlement for those passing the Bac (equivalence to which a French Cultural Attache awarded me), I spent a year at Grenoble Uni before grants were introduced here, and none of my French, Spanish and Luxemburg fellow-students mentioned career enhancement - education was an intellectual pursuit. How impractical those Continentals are, and how anti-intellectual we Brits!