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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU to think DD shouldn't have taken out a maintenance loan?

96 replies

awsedrftgyhujiko90 · 07/09/2017 20:21

Hi, DD is starting studying at uni (Chemistry) and says she will be taking the full student maintenance loan for each year Confused

she is obviously taking the tuition loan and has worked for the last 2 years and saved 5k for food, etc. and still has her job, so will earn even more (she is staying local) but will be moving into a flat (it's owned by my parents and they have kindly said she can live there for no cost for the next 3 years as they helped out my dd1 with her accommodation).

She is entitled to the full 8k each year due to income, but she didn't need to take a maintenance loan at all. She is so sensible with money and I can't believe she decided on this... She says she won't have to pay it all back because it gets written off after 30 years? but I hope she will have a good wage.

She says the average wage for chemistry graduates is 19k and she won't even hit the threshold, so thinks it's sensible to take it?

Please tell me I'm not going mad and think it's crazy????

OP posts:
Argeles · 07/09/2017 20:36

I have mixed feelings about this.

I think it sounds quite sensible on the basis that she is sensible with money, and what she has said about her potential earnings and paying back the loan.

Do you know what she is going to do with the money?

My next thought was that she is going to save it all each year (£24,000) and is planning to put it towards a deposit on a property when she graduates and is in full time employment? This sounds like a great idea, but may not be in practice.

When my DH and I were taking out our mortgage, we were told we had to pay back every penny that we owed on our student loan for them to give us the mortgage! We had had to use our loans in full and hadn't been able to save any money when we were students, but I don't think mortgage companies would accept £24,000 as a deposit, knowing that it's your student loan money (so do still owe £24,000 plus interest to the student loans company).

peachgreen · 07/09/2017 20:37

Take it and put it £200 a time into a first time buyer ISA. That will earn her a fantastic government bonus when she comes to buy her first house.

GardenGeek · 07/09/2017 20:37

This reply has been deleted

Message withdrawn at poster's request.

SoPassRemarkable · 07/09/2017 20:38

If she could keep it in a bank account and use it for a house deposit when she graduates then it's a great idea.

It's what I did over 20 years ago and bought my first house at 21yo when I left uni. And I've never paid a penny back and it's about to be written off!

HoneyIshrunktheBiscuit · 07/09/2017 20:39

www.moneysavingexpert.com/savings/lifetime-ISAs

FenceSitter01 · 07/09/2017 20:39

If I were here I would look to buy shares. Weapons manufacturers look quite promising at the moment.

SoPassRemarkable · 07/09/2017 20:40

I didn't think mortgage companies took student loans into account? I guess they might do a general check to make sure you can afford your mortgage so if you had high repayments it might be an issue? I never had a problem getting a mortgage.

AldiAisleOfCrap · 07/09/2017 20:41

Very sensible , she may only every pay the amount of money back to cover the tuition fee loan , so the rest is basically free money.

Trills · 07/09/2017 20:42

Mortgage companies take into account that student loans reduce your available money, when they are doing affordability calculations.

They are not at all interested in what your total debt is.

titchy · 07/09/2017 20:42

Argeles - while that may have happened with the old style loans, banks are treating the new ones (well I say new, they're 5 years old!) as repayment commitment rather than debt to be repaid (the majority after all won't pay their full loan off).

AldiAisleOfCrap · 07/09/2017 20:43

When my DH and I were taking out our mortgage, we were told we had to pay back every penny that we owed on our student loan for them to give us the mortgage!

They were talking nonsense, how would they ever know how much loan you would pay back over 30 years.

Worriedrose · 07/09/2017 20:43

I've never heard of anyone having to pay their full student loan back in order to get a mortgage
It doesnt even show up on your credit score

Original poster
awsedrftgyhujiko90 · 07/09/2017 20:44

so glad i started this thread thank you, i had no idea and she was getting very frustrated with me!

dd1 did nursing and didnt have all of this, so its all new to me

OP posts:
GardenGeek · 07/09/2017 20:44

This reply has been deleted

Message withdrawn at poster's request.

idontwannaneedthem · 07/09/2017 20:45

unless you're paying it back (and you won't be) it's really none of your concern.

Original poster
awsedrftgyhujiko90 · 07/09/2017 20:46

Hmm its called looking out for her?

OP posts:
Worriedrose · 07/09/2017 20:46

If you're full time employed they take your net salary into consideration
So it would be like someone saying your NI contributions affect your ability to get s mortgage
It's not a debt you can not pay. It's taken in PAYE

puzzledlady · 07/09/2017 20:47

sorry - theres such a loan where you never have to pay back? Really?! i don't mean that in a goady way, I'm not from this country and I've never come across this ever. Quite lucky of students here to be able to do this, wish they had this all over as i know some friends who struggle to pay their uni fees.

Worriedrose · 07/09/2017 20:48

And it's great you're looking out for her. But she sounds very sensible and has her head screwed on.
You should be very proud of her

GardenGeek · 07/09/2017 20:53

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Message withdrawn at poster's request.

Trills · 07/09/2017 20:55

I get so pissed off that people say its the best loan - its not - its categorically the worst.

That depends on what criteria you use. The interest rates as they currently stand are horrendous, and it was very unfair of the government to go back on their promise to raise the threshold at which you start to repay.

Butobody will ever be knocking on my door or taking away my possessions because I have not paid back my student loan. If I lose my job, I don't have to keep paying.

JadeT2 · 07/09/2017 21:01

Also agree it's sensible. I pay £60 a month towards my loans and because it is deducted immediately it really is more of a graduate tax.

GardenGeek · 07/09/2017 21:01

This reply has been deleted

Message withdrawn at poster's request.

I17neednumbers · 07/09/2017 21:04

"She is not allowed to pay off early if she's a new starter."

Is that right? I seem to remember the Cons/LibDems suggested at one point that they might not allow early repayment, when they were discussing bringing in the current system - but I thought that was ditched in the end.

The other point usually made on these threads is that there is no guarantee the terms won't be changed. Although at the moment the political pressure may be against worsening the terms, that may change in the next 30 years...

EezerGoode · 07/09/2017 21:07

What's all this she won't pay it back talk?? Clearly I was an idiot paying mine back as a stay at home mum...I borrowed it ,so it's only right I pay it back