Active discussions

Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Talk
Chat

Join the discussion and chat with other Mumsnetters about everyday life, relationships and parenting.

Original poster

Student loans to hit 12%

125 replies

GreenLunchBox · 13/04/2022 21:45

www.bbc.com/news/education-61088025

It always boggles my mind how nobody really cares about the student loans situation, writing it off as a 'graduate tax'.

At 12% interest a £50k loan becomes £100k after 6 years then £200k after another 6.

"But you don't have to pay it all off.. "
What if you have aspirations to getting a high- paid job?

Honestly, they are trying their hardest to widen the gap between rich and poor. If we still had access to studying in the EU I would encourage my kids to look into it.

OP posts:
D0lphine · 13/04/2022 21:58

Yep as a society we're fucking young people over.

I got the first round of student loan and the end is in sight! But then my loan is only 1% interest.

mjf981 · 13/04/2022 22:00

Totally agree. Graduate tax my ass. It’s a loan. Interest is charged. It reduces your take home income for years.

RancidOldHag · 13/04/2022 22:01

The scope for the government to change T&Cs (earnings threshold, interest rate) was always considerable.

And when the public coffers are emptier and covid needs to be paid for, then it getting faster/higher payments againstnstudrntnfinance was always going to be on the cards.

Also, I was idly wondering if 12% is the figure we need to get used to in other contexts too

Interested in this thread?

Then you might like threads about this subject:

General money
Flyonawalk · 13/04/2022 22:03

Agree that it is a disgrace.

Particularly for current students and recent graduates, who will pay such a lot when they missed out on in-person teaching during lockdown.

PinkPlantCase · 13/04/2022 22:04

Thankyou for drawing attention to this OP. It makes me so angry.

Because of the ghastly interest rates it has not possible for me to pay off my student loan. I think I’d need to earn atleast 75k every year for the next 25 years or something like that.

And before anyone jumps in and says - I work in a profession where you need both undergraduate and post graduate degrees in order to be qualified. I could not do my chosen career without having been to university.

Sacada · 13/04/2022 22:04

12% interest, 7% (forecast rising later this year to 10%) inflation....so not really 12%. IS IT ?. Do you understand the difference between 'interest rates' and 'real interest rates' (the only interest rates that really matter). I don't think you do.

Original poster
GreenLunchBox · 13/04/2022 22:10

@Sacada

12% interest, 7% (forecast rising later this year to 10%) inflation....so not really 12%. IS IT ?. Do you understand the difference between 'interest rates' and 'real interest rates' (the only interest rates that really matter). I don't think you do.
What are you talking about? Condescending, much?Hmm

RPI + 3% is the rate. I don't know if you've heard, but inflation is set to rocket

OP posts:
TabithaTittlemouse · 13/04/2022 22:12

I don’t even look to see how much I still owe. I’ve got my head firmly in the sand.

cakeorwine · 13/04/2022 22:14

@Sacada

12% interest, 7% (forecast rising later this year to 10%) inflation....so not really 12%. IS IT ?. Do you understand the difference between 'interest rates' and 'real interest rates' (the only interest rates that really matter). I don't think you do.
If someone isn't earning 7% more because they have had no pay rise, then it's going to feel like 12%

Of course, if I get a 7% pay rise and things cost 7% more, then I am not better off. Nor worse off

If don't get a pay rise and things cost 7% more, then I feel worse off.

If I don't get a pay rise and my loan goes from up to 12%, I think that's going to make me much worse off

portionplate · 13/04/2022 22:16

It's insane, honestly if any young person has the opportunity they should look abroad. We are having high tax & a lower standard of living, who wants that?!

VeniVidiWeeWee · 13/04/2022 22:16

And it's also predicted to hit zero percent in a few years, (BBC news tonight).

Original poster
GreenLunchBox · 13/04/2022 22:17

It's the only loan that actually INCREASES every year. If you take out a loan for a car or home improvements you know it will reduce every month. It must be soul destroying looking at your statements. Can't believe we're in the same situation as America in this regard.twitter.com/Gritty20202/status/1513877177833566222?t=cKPdUWDtyNIheK_IkTNPsg&s=19

OP posts:
OP posts:
VeniVidiWeeWee · 13/04/2022 22:20

But what about the zero rate OP?

cakeorwine · 13/04/2022 22:23

I suspect that the wage at which people start paying it back won't increase by inflation every year.

OTOH - you will still be paying back the same amount per month.

And for the same number of years.

portionplate · 13/04/2022 22:25

Even if someone gets a good job how on earth do they "live" after they've paid

tax

uni fees ( yes they could not go but many jobs expect degrees as standard).

saving for a pension as private schemes are crap & state age will no doubt be 70. (despite life expectancy declining)

Likely need to pay extra for nhs as the new additional levy won't be enough &/or private healthcare if they actually want fast treatment.

rent

and save for a house

AledsiPad · 13/04/2022 22:26

As a third year student, I really don't care. When I embarked on this degree it was with the understanding that I would pay a small (in comparison), extra amount from my pay packet for the remainder of my career. It is what it is. I wanted/needed to go and considered it worth that price (metaphorically at the very least).

If people didn't read the T's and C's that's on them.

cakeorwine · 13/04/2022 22:27

@VeniVidiWeeWee

But what about the zero rate OP?
From the Government (I think they need to update the RPI figures)

Your annual income Interest rate
£27,295 or less RPI (currently 1.5%)
£27,296 to £49,130 RPI (currently 1.5%), plus up to 3%
Over £49,130 Usually RPI (currently 1.5%), plus 3%

Interesting how it's says RPI plus up to 3%

IDontHaveAnOutingHobby · 13/04/2022 22:31

Yes. Martin Lewis saying it doesnt matter is just wrong.

When my DD and her partner wanted to buy a house it mattered. She had no loan but he did and it reduced their borrowing amount

(not a whinge but a fact that is never mentioned)

givethatbabyaname · 13/04/2022 22:34

It’s this government kicking the can down the road, when a labour govt would have to deal with it

cakeorwine · 13/04/2022 22:38

@IDontHaveAnOutingHobby

Yes. Martin Lewis saying it doesnt matter is just wrong.

When my DD and her partner wanted to buy a house it mattered. She had no loan but he did and it reduced their borrowing amount

(not a whinge but a fact that is never mentioned)

The loan matters.

But regardless of interest rates, the monthly repayment is still going to be the same.

As is the time it takes to get written off.

If it ever gets written off.

Original poster
GreenLunchBox · 13/04/2022 22:41

@AledsiPad

As a third year student, I really don't care. When I embarked on this degree it was with the understanding that I would pay a small (in comparison), extra amount from my pay packet for the remainder of my career. It is what it is. I wanted/needed to go and considered it worth that price (metaphorically at the very least).

If people didn't read the T's and C's that's on them.

Good for you It's truly a race to the bottom FFS
OP posts:
Original poster
GreenLunchBox · 13/04/2022 22:42

Interesting how it's says RPI plus up to 3%
What do you mean?

OP posts:
Original poster
GreenLunchBox · 13/04/2022 22:44

@IDontHaveAnOutingHobby

Yes. Martin Lewis saying it doesnt matter is just wrong.

When my DD and her partner wanted to buy a house it mattered. She had no loan but he did and it reduced their borrowing amount

(not a whinge but a fact that is never mentioned)

I like the guy and his work, but I think he dropped the ball on this. I've seen lots of people tagging him on Twitter asking him to do a new post on this
OP posts:
cakeorwine · 13/04/2022 22:48

@GreenLunchBox

Interesting how it's says RPI plus up to 3% What do you mean?
It means they have a choice about the interest rate - it's RPI plus a figure up to 3%.