interest on student loans shouldn't start till the degree is done

[angelcakerocks]

And should be charged at base rate imo. I really think it's appalling that young people are being charged compound interest on the loans before they are even in a position to start paying it off. Also, why is the rate of interest so comparatively high (compared to interest on savings for example)

My son just graduated with £64k debt. It makes my eyes water just thinking about it.

I agree with stuntcamel that a graduate tax would be much fairer - then the burden can be shared by everyone who has been to university, so the cost would be much lower overall.

So people that can afford to go to uni without taking out student loans would effectively pay twice? Therefore encouraging them to take out the student loans regardless, reducing the amount the government receives in tuition fees, increasing what they have to pay in loans and keeping the amount each person has to pay at a similar level?

Not sure that is going to work.

The pre 2012 were repayable when earning £16k. Also £64 may not seem like it's poverty inducing but at £23k and having to pay rent and childcare it left a friend with £70 a month to spend on food.

Very well said Perpetual. Although I do agree that a graduate tax would be better.

Given two thirds never pay back their loans according to the financial times, it would seem many want the uni experience but don't want to pay for it.

Perhaps if payment was enforced regardless of salary, then fewer would go and those that did could pay less interest as they would actually be prepared to pay off their loans that they took out.

I have a stupid amount of student loan, I'm not sure how much exactly, I think in the region of £60,000? I got full loans for tuition, and grants and loans for maintenance, I needed all I was entitled to. And there's interest and stuff.
I didn't have a choice, it's the only way I could go to uni. I'm about to start teacher training, so I won't pay for a couple more years. It's an imaginary number, for most of us. It's not right, or fair. But it is what it is.

But the thing wuth supply and demand... Masters are becoming more and more desired. So many people are doing undergraduate degrees and getting good grades. Its harder and harder.

I really didn't want to do a Masters but for what I want to do it is required. Some people I was competing against at an interview lately had 2 masters!

And at 6% interest its possible a masters loan could take a long time to pay off.

Complaining about a 6.1% interest rate is fair enough. Don't see the issue with the timing, though.

I agree with ThePants999.

Another thing that is actually worth complaining about is the promised but not delivered rise in the threshold at which you start to repay.

"9% of earnings over £21k" - that 21 was supposed to go up in line with inflation. If it stays at 21 while everything else goes up, then that's equivalent to the threshold going down, and costs the ex-students more.

The older loans repayments kick in much lower than £21k, I think it's £15k. And if I get a bonus/overtime pay/holiday pay they take it as if I get that every month. And they don't cut off after 30 years but at age 65.

I'm lucky in that I only had about £16k instead of £60 but I'll be paying it til I retire and will never pay it off

People have the free choice not to go to university if they don't like student loans. Or work and grow up for a few years and go back as a mature student. University isn't the be all and end all.

Exactly Alittlepotofrosie.

I didnt go to Unviersity yet im doing better than my best friend who did.

Personally I think every penny of a student loan should be paid off. Why should I pay taxes so someone can go fuck about doing an arts course.

*NB. Doctors, nurses etc should be grants not loans.

AyeAmarok in the example you've given of someone earning £30 000 it would actually be £91 per month repayment, at current interest rates. I think that's quite a lot.
Also, you said you're paying/paid more than current graduates because your repayments didn't start on earnings over £21K, but presumably your total debt is less anyway as your student loan wouldn't be the £9k p.a. it is now.

You're wrong, OP. It is £67.50 per month for 30k. The interest rate is irrelevant.

I think mine are about 25-30k, so less than the 45k that students will have now, but that's not really material as most of them won't pay back anywhere near that and the total doesn't influence the repayments.

Those saying a graduate tax would be fairer, should people on low wages, part-time workers, and those on maternity leave or who are a SAHM continue paying this tax at the same rate as high earners?

The way it works now for repayments is the best of a bad situation.

Why should I pay taxes so someone can go fuck about doing an arts course

Do you not want your kids to do art at school then? If there's no-one with an arts degree who exactly will be teaching them?

Don't be such a fucking philistine.

Well I am paying the £9k a year, my DP payed £3k per year. When he was earning above the threshold for repayments it was crippling us as the cost of rent, council tax, bills, income tax and NI ate up the vast majority of his wage, so even though £70 odd quid a month doesn't seem like a lot it makes a significant dent when the cost of living is so high. Also these loans DO impact on the ability to get a mortgage, even though we were told it wouldn't, some of our peers have failed to be able to secure a mortgage even with a substantial deposit. It's pretty galling hearing older people tell us it is meaningless when they got their degrees for free and at a time when house prices and rent weren't so ridiculous. A degree doesn't even guarantee a decent job now either, I know more graduates in low paid non-graduate roles than I do commanding a decent salary.

The quality of education I was receiving for £9k was not worth it at all in my opinion and I was at a top five ranked university, we had so many repeated lectures over the years, multiple strikes from tutors which meant no work was marked for entire terms meaning you couldn't make improvements on subsequent pieces of work as you had no feedback and only 8 hours of contact time a week and little hope of seeing your personal tutor during their one hour of office time a week with multiple students from each cohort who wanted help or guidance. If I could go back in time I wouldn't go as I think it has been a waste of money. As it is I am going back to complete my degree once dd is no longer breastfeeding because otherwise it is money totally wasted.

"it would seem many want the uni experience but don't want to pay for it"

Junior doctor here, so didnt do a worthless degree imo.Didnt much care about the uni experience either since i spent most of my 6 years in hospitals (med students get about 4 weeks holiday a year in clinical years) At current wage levels I wont have paid mine off in 30 years but I will have paid back a hell of a lot more than I borrowed. Interest goes up in line with wage increases except those in the public sector have not had any wages increases in year. I assume teachers and nurses wont be able to pay theirs off either - its not really our fault we don't earn enough to pay them back - government sets fees and goverment sets interest and wages....

I would prefer a graduate tax

I was sold mine as interest free back in 2002
Every statement you have ever received would have showed the interest that was being added on.

I have just looked at mine from 2001 - 2004 and they all show the interest being added on.

How can the marginal rate be 11% when the repayments are 9% of £21k?
The repayments are not 9% of £21,000.

They are 9% of earnings over £21,000.
So if you earn £25,000, it is 9% of £4,000.

PersianCatLady

Oh yes it does, I am not disputing that...... but before I applied I was told it would be

The quality of education I was receiving for £9k was not worth it at all in my opinion and I was at a top five ranked university

I think students should absolutely be questioning what they're receiving for the money they're paying. Some of it clearly isn't good enough.

The old rates didn't start charging interest until degree completed not no interest at all

I'm currently paying interest on my loan for a degree that's only half way through

TOADfan you need to go google the Arts and Humanities Research Council. If you don't like the idea of your taxes paying for arts BAs you're going to be gutted at all of the large scale, innovate arts research funded by public money on there! #SorryNotSorry

Whole system of paying for education by loans is a mess.

In the States it is a massive time bomb- over a trillion dollars of debt, with at least 40% of that unlikely ever to be repaid. And it has caused the cost of degrees to increase massively as well.