Student loan repayments are completely unfair

The bit people didn't understand was the extent of the interest. It's not a small amount of interest, it's huge.

Exactly...it is the Plan 2 loans that are the worst. There's a petition on the mn petitions site, worth a sign and share though I don't particularly like the elitist wording of it...it's the signatures that are important and at least whoever set it up had the ooomph t do so

@LiviaDrusillaAugusta my Mum wouldn’t have had a clue what the contract meant had she reviewed it for me. The teachers didn’t understand it.

Not to mention she was a very unwell woman (alcoholic bipolar) - not all young people have parents who are able to support them and university shouldn’t be out of reach for those from deprived backgrounds.

When I completed by daughters student loan application, to confirm my earnings, I was unaware just how unfair this 'loan' is. Its likely she will never pay it off. It was not made clear to her that whilst shes earning less than the minimum the very high interest (more than mortgage interest) continues to be added. Even when she is paying the interest is eye watering.

@StevieNic The amount you pay was ALWAYS linked to earnings. You earn more, you pay more. There was no lie. You just clearly didn’t understand. My DD is your age and paid hers off years ago. You had the £3,000 fees! What a huge advantage! No, there were not apprenticeships but if you are moaning about payments you must be doing well. They are insignificant if you earn £30,000. You obviously don’t. So well done and your degree has got you there.

What annoys me about this conversation is (mostly older) peoples first response will be ‘do an apprenticeship/ don’t go to uni’ okay but I’m 34 I don’t have a Time Machine to go back to aged 17 and make a different decision. We are talking about hundreds of thousands of people who were told they would pay back an insignificant amount and that it was a fair system- lied to- and who are now struggling for life under a misssold loan. Our parents didn’t realise we would be burdened in this way, we didn’t.

The conversation at hand is about how to rectify these unfair loans NOW for the people struggling under them. Interest should be scrapped and refunded for those who have overpaid in my view.

I think it is interesting to actually nail down the following. Where does the Government get the money to pay out God knows how many millions of pounds in student loans?

I doubt if this money comes out of general taxation..So who is bankrolling this money?

Maybe the friend, the Bankers in the City of London? You know the people who really run the country.

Perhaps it’s time for the thinking to swing the other way and for people not to expect to go to uni by default (or at least delay it/do it alongside a job). There are plenty of other options.

So I took student loans for 1995-1999. I had free tuition and the grant for living was based on parental income. Both worked so they were meant to contribute a certain amount b it couldn’t actually afford it. So I took out the loans. When I started work I was earning a teacher starting salary of around £15k annd then after a couple of years got the repayment amount so I ended up paying them back. It was a few years after graduating. I rented for a year and then bought a house. After another year sold my house to move in with partner and basically used my equity to pay off the loans. Housing market was great and it was a decent amount. Kind of regret this now as fast forward a few years, married, kids, part time wage, divorced, single parent on part time wage. Oh and we bought a house that we sold for pretty much the same as we paid due to relocating. Basically house sale profit went on fees and deposit for next house. However house prices crashed and we ended up in negative equity for quite a number of years. I did go back to uni whilst working part time as a single parent to do my masters and took out a post grad loan. That was 8 years ago. I’ve just not hit the wage for repaying £50 a month direct from my salary after going from part time to full time but hang also taken a pay cut on the FTE salary compared to previous job.

I do wonder if paying off that original loan was a good thing. Maybe it actually was.

My eldest is only a year off thinking about uni. It is worrying.

You don’t have to have gone to uni to be able to look into things before you sign up. Lesson learnt, I guess (no pun intended).

Most of those adults never went to uni or did so when it was free. They also got the same messaging as we did, just a small tax that is written off. The information on just how crazy the interest rate policy was was near on impossible to find. It was also the generation when the focus was on everyone going to uni. I do strongly recall the focus being in going to uni rather than having the audacity to ask questions about how the loans work.

If only they had adults in their lives who could have looked into it

Op I agree .I'm so glad it's all coming out now !

I do think young people were massively missold. It was so heavily downplayed as just a small tax that 17 and 18 year olds who absolutely didn't know better went into it without any understanding of it. It should have been a lot more transparent

Totally appreciate your point - I think it’s a can’t rather than won’t though. I think because so many people are able to opt out of state education, the incentive to improve it just isn’t there. Financially, looking at where money goes in terms of contracts feels like it could be a good place to start. I’m more familiar with the NHS but I assume education system is similar - lots of money to pay some Tory mate baroness for non existent PPE, but not enough to pay nurses an appropriate (in my mind) salary. I really feel for parents of children with SEN, it’s such a struggle.

@Sammy900Oh yes! Apprenticeships! Have you heard of them?

There’s an apprenticeship levy paid by companies who train young people and employ them.

DH was an employer before retirement. There’s high NI and lots of costs associated with employing people. In his business, a degree was required but young people earned well. They were trained to become chartered engineers at no cost to them but MEng is a requirement . It’s long been the case that professions need degree level people - a bit like doctors need degrees. There are many jobs asking for degrees where no post grad qualifications are offered or needed. This is where there should be flexibility on qualifications but don’t expect employers to cough up for sociology or history degrees as well as post degree training.

As the Met Police do.

Also meant to say that I don't particularly like the wording in the petition, which is on the mn petitions site, but at least he had the ooomphh to set it up

I agree. I’m on plan 1, I will be paying £200pcm + for my entire working life which is a significant burden. Far more than I borrowed. It’s also unfair that women’s interest debt increases whilst they are on maternity leave.

@disappearingfish Thank you for putting people right.
I still think Martin Lewis is right to tell us to think of it as a 30-year graduate tax rather than a debt because that is just how it operates. But psychologically seeing that repayments are not making any inroads, and in fact that the outstanding sum is growing, causes a lot of anxiety and the freezing of the thresholds means that the marginal tax burden is growing.
I don't expect my DD to pay her Plan 2 loan off before the 30 years is up, DS maybe will, but it's very hard to gauge. Only half of students currently pay their loan off.
The students who have been really stiffed are those from poorer households who had to take out larger maintenance loans. How progressive is that!
We thought we understood the terms but didn't appreciate that the Govt can change those retrospectively. The fixed threshold will be the killer.
As PPs have said, the interest is extortionate but as it doesn't impact the rate of paying back or the term I think it's immaterial, no?