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AIBU?

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Original poster

To wonder why anyone rushes to pay off their student finance?

267 replies

ChoppedChorizo · 11/02/2025 17:56

A couple of friends of mine make regular overpayments with a view to paying it off quicker. Some have used inheritance to clear it. I don’t understand the motivation? The lot gets written off if you haven’t paid by X number of years.

Mine has continued to increase - I started uni in 2012 so my fees were around £7k per year. Plus living. It sits around £23k now.

Ive earned well enough but did a post grad (self funded) two years of training on the job and then had children and so two years of mat leave.

I don’t see the motivation to pay it off sooner.

OP posts:
Original poster
ChoppedChorizo · 11/02/2025 18:30

MathsMum3 · 11/02/2025 18:22

Are you sure? If you started uni in September 2012, that's plan 2.

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It’s definitely plan 1 - I’ve just checked. Whether it’s because it was “drawn down” in August of that year?

OP posts:
Completelyjo · 11/02/2025 18:23

If the fact that it’s continued to increase can’t explain to you why some people pay it off faster maybe you didn’t gain much life experience from uni?

MixedBananas · 11/02/2025 18:23

I worked 3 4 years pre uni and in theat time parents allowed me to stay at home, 2 years was A levels and 2 years gap. I didn't pay rent grabted I saved every single penny. And i paid my way through uni gratudated with 0 debt and money left over to purchase a cheap car.
I don't get why no one did this when the fees were only 1.5-3k annually. Now it is 10k it seems near impossible.

Wow what a debt to carry about. I would hate it and that would drive me insane and to depression to be that much in debt.
My ethos if I dont have the cash in my bank then I don't do it. And I save up until I can afford it.

MathsMum3 · 11/02/2025 18:22

ChoppedChorizo · 11/02/2025 18:19

I’m on plan 1 so it’s 4.3%

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Are you sure? If you started uni in September 2012, that's plan 2.

irregularegular · 11/02/2025 18:21

Well it depends. If you are going to earn enough that you will pay it off eventually, then you save interest by paying it off sooner rather than later. It is a bit of a gamble though!

Original poster
ChoppedChorizo · 11/02/2025 18:19

Icanttakethisanymore · 11/02/2025 18:12

If you are on plan 2 then a quick google suggests you might be paying 7.3%… if so that’s obviously not cheap. However, if you think you won’t ever pay it off then obviously it could still be better to leave it. I’d take a look and run some calculations based on expected earnings etc.

I’m on plan 1 so it’s 4.3%

OP posts:
Jmaho · 11/02/2025 18:18

It's not a cheap loan now though. I'm sure it's getting on for 8% now
I work in mortgages, we deduct student loans if you're above the threshold to repay

Icanttakethisanymore · 11/02/2025 18:12

If you are on plan 2 then a quick google suggests you might be paying 7.3%… if so that’s obviously not cheap. However, if you think you won’t ever pay it off then obviously it could still be better to leave it. I’d take a look and run some calculations based on expected earnings etc.

Icanttakethisanymore · 11/02/2025 18:05

ChoppedChorizo · 11/02/2025 18:05

I have the means to repay it I have just never considered it a priority because I understood it was such a “cheap” loan that it’s should be the last thing to clear. Ie AFTER paying off your mortgage but I am happy to be corrected if I’m mistaken.

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I guess that depends on the rate.

Icanttakethisanymore · 11/02/2025 18:05

ChoppedChorizo · 11/02/2025 18:02

Not for capital gains - I just mean not being asked for a lender. I have had to pay extra off at times when I’ve done a self assessment though from property income - which I guess also captures capital gains but don’t know for certain.

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Oh I see. When I had a student loan my mortgage broker asked about the outstanding balance, I’m not sure to what extent it impacted my ability to borrow though.

Original poster
ChoppedChorizo · 11/02/2025 18:05

Whatsitreallylike · 11/02/2025 18:01

If you know that you’re going to end up paying it all off I.e you’re a high rate taxpayer, then it makes sense to pay it off early as you reduce the overall repayment amount.

And you wouldn’t have been asked about student finance because it comes off our payslip, but it would affect your overall affordability when considering a mortgage (as it did in my case).

However, if you’ve no realistic prospect of ever paying it off in full, then I agree overpayments make little sense.

I have the means to repay it I have just never considered it a priority because I understood it was such a “cheap” loan that it’s should be the last thing to clear. Ie AFTER paying off your mortgage but I am happy to be corrected if I’m mistaken.

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Original poster
ChoppedChorizo · 11/02/2025 18:02

Icanttakethisanymore · 11/02/2025 18:00

No, I guess it would get quite complex to try and use capital gains to work out student loan repayments.

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Not for capital gains - I just mean not being asked for a lender. I have had to pay extra off at times when I’ve done a self assessment though from property income - which I guess also captures capital gains but don’t know for certain.

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Whatsitreallylike · 11/02/2025 18:01

If you know that you’re going to end up paying it all off I.e you’re a high rate taxpayer, then it makes sense to pay it off early as you reduce the overall repayment amount.

And you wouldn’t have been asked about student finance because it comes off our payslip, but it would affect your overall affordability when considering a mortgage (as it did in my case).

However, if you’ve no realistic prospect of ever paying it off in full, then I agree overpayments make little sense.

Minnie798 · 11/02/2025 18:01

For people who know that they will pay back the loan during their working life, it makes sense as they’ll save on interest. For others, it’s probably the psychology of having the debt and feeling better when it’s gone.

Icanttakethisanymore · 11/02/2025 18:00

ChoppedChorizo · 11/02/2025 17:57

Also bought and sold 4 houses in that time and never been asked about it.

No, I guess it would get quite complex to try and use capital gains to work out student loan repayments.

Icanttakethisanymore · 11/02/2025 17:58

Not everyone’s will get written off, only if you don’t earn enough. If you expect to be forced to pay it off via your salary (because of your level of earnings) then you might be better off to pay it off sooner depending on the interest rate. What rate is currently charged on your loan?

Original poster
ChoppedChorizo · 11/02/2025 17:57

Also bought and sold 4 houses in that time and never been asked about it.

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