Student loan repayments are completely unfair

There's a teacher recruitment idea for the government. Pay off loans for those who qualify and serve 5 years (or whatever) in the state school system. Could be applied to nurses and engineers too; anyone we need more of.

50% of population should not have been the target.

Not everyone is academic.

It was still mid-sold before then though.

It was definitely mis-sold. I didn’t know the interest would start straight after the first payment, whilst I was 18, in my first term of university. They always went on about how we wouldn’t start paying it back until the April after we graduated if we were earning enough. By that point, interest had been added for 3+ years depending on the length of your course.

The only students that would have been able to pay some back whilst still studying are the ones with wealthy parents.
They also use RPI to calculate the interest, knowing it would come out higher, whereas the government uses CPI for most things, which is lower.

Due to going part time after having children, I haven’t been earning enough to pay it back but 1K a year has been added in interest so it’s now back to square one, 15 years after graduating.

When I took out my first loan in 1998 I had no clue (rightly or wrongly) that it wasn't a similar sort of repayment scheme to my sister's which was tied to only having to make repayments once earning above average salary.

I had a higher than average loan due to some additional hardship loans and then was ill and unable to work immediately after graduation. So my debt snowballed, whilst they changed the rules about interest rates. We were sold the ridiculous lie that because interest rates were tied to inflation it wouldn't matter because salaries would be increasing too! Public sector pay freeze anyone?

I paid mine off in my early 30s - itself a painful experience as I was doing temporary roles and it wasn't easily possible to claim back student loan overpayments that had been collected via PAYE. So whilst I paid it off quickly, it was because I was overpaying not through choice.

I borrowed 11k in 2003-2007 and now owe 12k. I'm another who repaid for a while then had a baby 8 years ago - they raised the threshold above what I earn part time at the moment.

I have the money to pay it off but we have a mortgage which is 11 years from ending and it would knock a good chunk off the term, so I don't know what the best use of the money is. I was thinking I would pay off when I go full time again but obviously it's growing in the meantime.

I know it gets written off but like OP if I don't pay it off I'll be making monthly payments out of my (eventually) higher salary until I retire!

But maternity leave is paid for by tax payers and children can be considered a choice. Then there’s child benefit, the free childcare given (which we didn’t get years ago). If we support parents like this we should support those in education too

I was at an offer day yesterday and the course leader was dismayed about how many students now need to take a job alongside their studies in addition to the amount of money to pay back.

I'm on Plan 1. Graduated in 2012. I had a full tuition loan and a maintenance loan of around £3k p.a., so the total debt was around £25k.

We didn't complain when interest rates were low in 2013, did we?

I think the plan I have is fair. I get its frustrating that the interest is higher now but just checked now its 3.2%.
I have 5k left to pay, which means within 2 years my loan will be cleared

Plan 2 is shocking i agree but plan 1 isnt that bad!

It’s a discriminatory policy. It negatively affects women who may take an extended period of absence from the workforce to have children, sometimes multiple leaves of absence and may reduce their hours after. The repayments work for those in finance or law who can quickly be on a higher wage and move through the salary brackets quickly but not really for anyone else. It’s also only taken out by those from working class backgrounds.

I'm plan 1. I graduated with a law degree in 2003. My first job was a sales assistant in a department store for £10kpa which i think was the repayment threshold then. By 2015 i was a 5 year pqe solicitor earning £35k in the south east - not all lawyers are on mega salaries. I agree it indirectly impacts women, i've had two maternity leaves in the past 10 years and worked part time as DP (despite leaving school with 3 gsce and bumming his way around the world until his late 20s) earned twice my salary. We couldn't afford a nanny which is what we would need to work full time. My part time salary has been below the threshold so I still owe £5k (my loan was £13k so not too horrendous compared to todays loans).

I'm ok now. I earn £55k so the loan will be cleared in around 3 years time. Tbh WFH/hybrid is the reason i've been able to go back FT and earn a decent salary - i'm very lucky my employer is down with flex working (and was before lockdown ). I'd still be PT otherwise.

USA loans are essentially a lifetime committment. I now have a S&S ISA as a 'college fund' for dcs but if they want to go to uni they'll have to live at home and this fund will pay travel costs.

@WutheringTights @MadinMarch I assume that poster is referring to plan 1.

It most certainly is a lifelong debt for many!
My daughter went to uni in London in 2017 for a three year degree course and she got the maximum loan for fees and maintenance as I was a single parent on a low income. Upon graduating she got a further student loan for one year to study for a PGCE and then became a secondary school teacher.
She recently had reason to check the balance of her student loan. I was flabbergasted to see that she now owes about £107,000!
It's just going to increasingly snowball in the coming years. She has no chance of ever paying it back on a teacher's salary, if she wanted to clear her debt.
It just seems so wrong that she will be massively penalised financially for the majority of her future working life- all for the rather dubious privilege of becoming a qualified teacher in the state system.

It’s not a bad idea. It would also allow offers to be made on actual grades, not predictions, which would be better for equity of opportunities.

It would also reduce some of the accommodation anxiety.

I pay back £35 a month for both my masters and undergrad however I was classed as a Welsh student for my undergrad so I do have a lower loan anyway . But It doesn't bother me paying it back as it allowed me to get a job that I wouldn't be able to get without a degree and to get out of a low income family situation.

The kids finish A levels in June and start uni in Sept. I really think if they instead started uni in January it would give them a chance to earn more income before they start uni and they would need less living loans. Especially in the lead up to Christmas there are more short term jobs around.

It could be arranged but the main problem in the past is that it’s not been popular with students. This may change.

It’s the compound interest that is the killer so I overpaid my student loan monthly. When I was on low income when my dd were little it was just enough to cover the interest but overall I cut down years and I was glad to get it off my back.

You can get a short term personal loan with a fixed rate of around 5%, which is much lower than many people are paying (or have been paying) on their student loans. Which, in itself, is criminal. If RPI goes up, which it is expected to with the war in the Middle East, student loan rates will go up again.

I’m 48 and also paid mine off years ago, but they were quite a bit different back then so you can’t really compare. The terms changed significantly after we both took our loans out.

The current system is really unfair and Plan 2 even more so. I’m saving like mad so that my children aren’t reliant on them

I’m finishing paying off plan 1 this year (having spent much of my 20s lower income, on maternity leave and part time due to having children young while starting my career). I’ve paid most of it off the last 5 years (not additionally, just the minimum required).

Plan 1 is not an unreasonable plan in my view, my payments only got substantially bigger as my pay did, I’ve paid very little interest on plan 1 in comparison to those on plan 2. I don’t think it would be sustainable to just pay the loans of everyone who hasn’t progressed, it’s the interest that’s the issue and that’s a much less prevalent issue in plan 1.

Plan 1 wasn’t that bad. I know loads of people who paid that off without too much hassle. Those who haven’t were probably sold a myth that they had to go to university but ended up with the kind of salary and job they didn’t need a degree to get into.

The silly notion that 50% of people should go to university has led to this.

I agree re the length of time the plan 1 is paid back.
unfortunately this hasn't been mentioned in the media it is all plan 2 which is bad is obviously bad. Just annoying there is no mention of plan 1.

I’m the exact same years as you. And mines increasing now (see my above figures).

I think it’s different if you hit the high interest era or not. I’m not a high earner and I was chipping away at mine. Mine was ~21k when I left uni got it down to around 11k and it was slowly coming down.

Interest rates shot up and I pay £100 off and £200 interest is added so now mine if back upto 15k and increasing.