Do you think student debts hold you back in life and if so how ?

[LardLizard]

Or should I listen to Martin Lewis and think of it as a graduates tax

Do think of it as a graduate tax. But to be honest that sounds even worse to me. It's a pain in the arse having to pay it every month, given the chance again I would have chosen a degree with better career prospects (I'm in a decent job with good pay now but outside my study field) .

What I don’t understand is why parental income is taken into consideration seems a bit unfair as some kids don’t get help from parent s

Its a graduate tax.
The tuition fee is the biggest part and that is NOT linked to parental income.
The maintenance is means tested - same as grants were back when I went to Uni.

Well mine hasn’t held me back, I can’t see how it could really? Yes it’s a pain having to pay it every month, like any regular payment I guess.
DH paid his off about 3 years ago, I’ve got a while to go due to a period being a SAHM. Hasn’t held me back in any way though.

Mine hasn't held me back. It comes out of my salary before it hits the bank account, so it doesn't feel like 'lost' money. And I don't need to worry about bailiffs coming round if I lose my job or something.

I do have a well paid graduate job, though, having studied a well regarded subject at a god university. It would probably have put me off doing a less useful course, but that's no bad thing.

It's the one and only debt you can ignore. You never need to ever open the letter when it arrives. Even if you earn £40k you will only pay £112 per month.

Just nearly cost dp a mortgage on pur first home. Hadn't been recorded in expenses but once they saw he had it we either needed another 2k or to settle some outstanding credit.

They don't hold you back with regards to your credit rating or ability to get a mortgage. You may as well view it as a graduate tax as it may never get paid back so not worth paying up front.

Having said that, I fee bereft every time my £140 goes to the SLC every month. Due to low earnings followed by periods of maternity leave all I've done for the past decade is accrue interest. Only now I'm I starting to make a dent and I'll probably have to pay it for the rest of my life.

Rarfy
That is because it counts as a reduction in income
but NOT as a level of borrowing.

tomhazard
I'll probably have to pay it for the rest of my life.
No, the balance gets written off 30 years after graduation.

Would it affect your chances of getting a morgage ?
Or reduce the amount banks are willing to lend morgage wise

Personally I don’t think they should take parental income into consideration
As at 18 you are legally an adult
Can get put in prison marry join the army etc so should be responsible for your own self

Lardlizard
Student debt counts as a reduction in income (ie 9% of your earnings over the limit)
so your loan balance could be £10k or £100k
but its only the percentage of your salary that is taken into account

Personally I don’t think they should take parental income into consideration
But for the MAINTENANCE it has always been like it ....
as students at University are NOT financially independent because they are not in work

How much do you need to earn before you start paying back? Is it 29k

£25k

The Student Loans company website is your friend
www.slc.co.uk/students-and-customers/loan-repayment/interest-rate-and-threshold-changes/threshold-changes.aspx

Honestly, I forget about mine. It's never affected me getting a mortgage or credit rating. Overdraft was another matter...

It's not really a tax though, is it? Because if your parents are wealthy enough to pay them upfront you will pay far, far less in total than someone who spends £20 years paying it off. Likewise if you get a well-paid job soon and pay it off fairly quickly, then you'll pay less because of there being less interest.

I'd honestly prefer it to be a graduate tax because at least then everyone would be on a level playing field

reallybad
If your parents are wealthy enough to pay up front out of their after 40% tax income, good luck to them.

If you get a well paid job you will pay MORE - because 9% of £100k is a lot more than 9% of £30k
and debts are written off after 30 years

How did it affect your overdraft

It's at that level now, but the govt has significant powers to change T&Cs. There is no need to introduce a graduate tax for as long this system exists and has high take up.

Didn't make a difference when I got a mortgage/loan/credit card/overdraft as it's not counted as debt, just comes out of your salary like tax, NI, pension etc.

No that isn't right. If you get a well paid job you will pay it off quicker and so accrue less interest. If you earn bellow the limit for a few years then you will continue to accrue interest you then get a pay ride and start paying back, but don't quite pay enough to balance out the interest payment so the dent keeps growing.

Whilst it is possibly true that most people don't clear their debt it is not because they haven't paid back the 50k they owed, but because they paid back much more than that but with interest the debt has grown to over 100k.

If it were a graduate tax everyone would pay the same. As it is the rich pay less, the unwaged pay nothing and those in the middle stump up the cash.

frenchfancy
As it is the rich pay less
No, the rich pay the most - because the Government gets the cash up front out of income that has already been taxed at 40 or 45%

And if they do take out a loan, they earn enough to pay it off

the low paid get their loans written off

If you don't believe me try this www.student-loan-calculator.co.uk and put in a 50k loan and a 28k salary. You still owe £43k after 30 years which is written off, but in the meantime you will have paid £114k.