Student Loan 2015 Discussion
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details here if current year income going to be at least 15% less than the year asked for
https://www.gov.uk/support-child-or-partners-student-finance-application0 -
New on here but need some help.
So student finance have set the debt collectors on me for an appaarent overpayment from 2012/13 and my last year of study.
I’ve had no communication from them until this point and despite asking them for proof of any overpayment I’ve been met with, “deal with the debt collectors” ?? Any advice on how to proceed as I’ve been graduated 5 years and this is e first I’ve heard from slc. If they can’t send me proof how can they expect me to pay???
Anyone point me in a direction lol0 -
Hi,
I graduated in 2009 and have been paying back my student loan pretty much ever since. My wage has been slightly increasing and I now earn 25k p.a. plus bonuses, overtime, incentives throughout the year.
What should be my earning threshold for repaying my loan as the website says 25k and implies that this is the same for everyone. I've spoken to the student finance company who advised it was 21k threshold before the fees went up, so that sticks throughout the term of the loan.0 -
Hi,
I graduated in 2009 and have been paying back my student loan pretty much ever since. My wage has been slightly increasing and I now earn 25k p.a. plus bonuses, overtime, incentives throughout the year.
What should be my earning threshold for repaying my loan as the website says 25k and implies that this is the same for everyone. I've spoken to the student finance company who advised it was 21k threshold before the fees went up, so that sticks throughout the term of the loan.
Student loans taken out for courses starting before September 2012 are on plan 1. The threshold is currently £18,330.
http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678490&_dad=portal&_schema=PORTAL
The threshold for courses starting after September 2012 (plan 2) was £21,000 and is now £25,000 (and will go up to £25,725 in April 2019). This is totally separate to plan 1.0 -
If the Student Loan is merely the basis for Government to calculate a Graduate Tax then why are the “loans” interest-bearing? Should the interest charged to a student never be repaid then, over thirty years at compound interest rates of say 7% (assuming no increase in the rate of RPI) the debt will rise by some 800% i.e. a £50K loan will increase to some £400K. Consequently, when the Government starts to write off these debts in ten years’ time the amount they will have to fund will be in the order of tens of millions of pounds per annum. From many years of experience of Government finances, I suspect they will decide they will not be able to fund it and will resort to extending the repayment periods and/or changing the thresholds. As you are clearly an advocate of this system, Martin, I would be interested to hear whether you agree that this is a distinct possibility, please?0
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Alan_Davis wrote: »If the Student Loan is merely the basis for Government to calculate a Graduate Tax then why are the “loans” interest-bearing? Should the interest charged to a student never be repaid then, over thirty years at compound interest rates of say 7% (assuming no increase in the rate of RPI) the debt will rise by some 800% i.e. a £50K loan will increase to some £400K. Consequently, when the Government starts to write off these debts in ten years’ time the amount they will have to fund will be in the order of tens of millions of pounds per annum. From many years of experience of Government finances, I suspect they will decide they will not be able to fund it and will resort to extending the repayment periods and/or changing the thresholds. As you are clearly an advocate of this system, Martin, I would be interested to hear whether you agree that this is a distinct possibility, please?
The parameters of the system will change regularly from time to time throughout. There is a review of the system due to report soon which could change these as soon as this Autumn:
https://www.gov.uk/government/news/prime-minister-launches-major-review-of-post-18-education
And loans are "interest bearing" mainly because of the way the loans are accounted for. Interest accruing counts as income today for the government. There is no spending counted until the loans are written off. Although the accounting is going to change this Autumn so that only interest which is expected to be repaid will count as income as it accrues: https://www.ons.gov.uk/news/news/accountingforstudentloanshowweareimprovingtherecordingofstudentloansingovernmentaccounts
The high interest rate was justified as a "progressive" measure as it is only repaid by higher earners and it makes the loan scheme overall less expensive.0 -
The parameters of the system will change regularly from time to time throughout. There is a review of the system due to report soon which could change these as soon as this Autumn:
https://www.gov.uk/government/news/prime-minister-launches-major-review-of-post-18-education
And loans are "interest bearing" mainly because of the way the loans are accounted for. Interest accruing counts as income today for the government. There is no spending counted until the loans are written off. Although the accounting is going to change this Autumn so that only interest which is expected to be repaid will count as income as it accrues: https://www.ons.gov.uk/news/news/accountingforstudentloanshowweareimprovingtherecordingofstudentloansingovernmentaccounts
The high interest rate was justified as a "progressive" measure as it is only repaid by higher earners and it makes the loan scheme overall less expensive.
Most of the above is wrong.
The original student loan scheme had a low fixed interest rate that meant in effect it was interest free.
The high interest rate on the “new” loans is set at the level it is to make the scheme financially viable for the government (though a higher than expected default rate is predicted to blow a hole in that anyway). Any lower rate and the new scheme would cost more than the old to run. So it’s RPi plus 3% which is idiotic when the base rate is so low. The rate is entirely predicted on the cost of running it.
There is no reason why the loans could not be interest free if the government decided as a matter of policy this is what it wanted to do. If it did, there are better ways of paying for higher education than an unwieldy loan scheme.
The new loan scheme doesn’t result in a progressive system either. The governments own graphs show those who pay the most will be those graduates on middle incomes such as nurses and teachers who will end up paying for the full 30 years. High earners such as those who end up in law, top accounting firms or similar on higher salaries will pay the loan down quicker. The more you earn the faster you pay it down.
And of course if you have rich parents who pay it off for you, your degree cost a mere £27k (typical).
It is not a progressive system.0 -
Most of the above is wrong.
The original student loan scheme had a low fixed interest rate that meant in effect it was interest free.
The high interest rate on the “new” loans is set at the level it is to make the scheme financially viable for the government (though a higher than expected default rate is predicted to blow a hole in that anyway). Any lower rate and the new scheme would cost more than the old to run. So it’s RPi plus 3% which is idiotic when the base rate is so low. The rate is entirely predicted on the cost of running it.
There is no reason why the loans could not be interest free if the government decided as a matter of policy this is what it wanted to do. If it did, there are better ways of paying for higher education than an unwieldy loan scheme.
The new loan scheme doesn’t result in a progressive system either. The governments own graphs show those who pay the most will be those graduates on middle incomes such as nurses and teachers who will end up paying for the full 30 years. High earners such as those who end up in law, top accounting firms or similar on higher salaries will pay the loan down quicker. The more you earn the faster you pay it down.
And of course if you have rich parents who pay it off for you, your degree cost a mere £27k (typical).
It is not a progressive system.
The high interest rate was almost entirely motivated by the government objective to reduce the deficit. As interest accruing counted as income the deficit was appearing much lower than it really was through a fiscal illusion.
I totally agree with you that it's not strictly progressive at all and I fully expect both the interest rate and repayment threshold to be brought down soon. There is little incentive for government to accrue massive interest on the loans if most of it is no longer reducing the deficit. https://www.thetimes.co.uk/article/student-loan-interest-must-be-scrapped-wm8v39dzd0 -
Hello
I've searched but can't find anything on this subject.
I've noticed that although my children are paying their student loan payments through the year via PAYE deductions from salary, these are only credited to their loan accounts in one total sum at the end of the financial year and sometimes after that (it depends when they decide to credit the account , which appears to be a manual process).
Surely as interest is charged monthly, so payments should be credited to the account monthly. If mortgages or other loans worked this way, there would be an outcry. How can we get this changed ?
Rgds0 -
Hello
I've searched but can't find anything on this subject.
I've noticed that although my children are paying their student loan payments through the year via PAYE deductions from salary, these are only credited to their loan accounts in one total sum at the end of the financial year and sometimes after that (it depends when they decide to credit the account , which appears to be a manual process).
Surely as interest is charged monthly, so payments should be credited to the account monthly. If mortgages or other loans worked this way, there would be an outcry. How can we get this changed ?
Rgds
In reality, interest isn't calculated until the repayment data is fed into the system after the end of the tax year. Interest is then applied and calculated automatically based on the repayments being received at the end of each calendar month during the tax year. This is a common misconception as just like everything about the student loan system, it doesn't work as it appears.0
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