To think people are unaware on how much the government has SHAFTED students with loans

[SucksToBeMee]

This brings me so much anger to this day, and I took out my student loans from back in 2012 when 9k tuition fees were introduced.

I did a 3 year undergrad and I left with a 50k debt. I can live with my 50k student loan. Fine, the government wants to pass the cost on to students (not that I agree you they should be doing that) but fine.

But the interest rates are so unbelievably outrageous I have no NO CLUE how they've gotten away with completely shafting the whole (especially poorer) student population.

Do people realise the interest rate on student loans is 3% + RPI? It's currently at 6.6%

6.6% interest this year on a 50k loan. That's at least £3300.

I earn a £45k salary and I still won't cover the interest this year. I have been earning a fairly decent salary since graduating and I have never covered the yearly interest.

My outstanding debt goes up and up each year even though I'm paying them thousands in the year. I now owe them £55k after giving them around £6k since I graduated.

They will carry on taking 9% of my salary over 25k and 9% of all my bonuses for the next 30 years.

Anyone who took out max loan (aka from a poorer background) and ended up breaking the barrier through to a better life is fucked over the most.
The wealthier families get away mostly scott free.

I think it's absolutely outrageous, and I'm not sure people realise how fucked over we're actually getting with interest rates. I have a debt that I can never even start to pay off. I will pay them probably double what I initially owed them over the next 30 years.

Honourable mention: they also charge max interest rates on your outstanding loan for the duration of your study.

Actually, the excuse was probably something to do with that higher monthly repayment potential. Since repayments last longer.

@Dyrne

I have literally never heard of anyone being denied a mortgage because they’re paying £50-100 a month towards a student loan. Happy to be proved wrong though...

I've not really thought about whether if will affect my mortgage. I currently have around £170 a month coming out for my student loan each month and I hope it doesn't affect my chances of getting a mortgage.

@tequilasunrises

Is it not better to have one of the newer loans that the old ones? I’ve got a pre 2012 one and I pay back on my income over £18K, but my Dsis has the current one and she only pays over £25K. So we earn the same but she takes home more!

Depends on salaries and how you look at it. If you were both on say a 40k salary then yes she'd be taking more home each month but you have a good chance of paying of your loan before the write off date and she doesn't have any chance. So short term she gets more money in her pocket and long term you probably would.

If you're both earning 25k then she's better off on her plan 2 loan.

I’d like to hear more from @titchy. Are you a government economist? Or David Willetts?

For goodness sake, welcome to life. Nothing is free. Why should taxpayers pay for your higher education and living expenses for 3 or 4 years so you can get a job with a high salary? Meanwhile we have children living in poverty, a record number of homeless. Youngsters stabbing each other because they don’t see a future. The country is on its knees we all have to play our part and pay our way.

I have read right through this thread. I started out thinking, bloody OP, whinging about the fact that some people are rich and others are not, boo hoo snowflake.

However, I’ve come around to having some sympathy for the OP.

Whilst the interest rate on her loans is probably lower than what you’d get from a bank (forget an unsecured personal loan at 3.1%, which a PP claimed was available; the interest rate acknowledges the risk of default), I put myself in the OP’s shoes and I didn’t like it one bit.

Full disclosure: I am generation X, and I went to university in 1989. No fees, full grant (I am from a low income family in the north of England and lucky for me I was clever and got into a top university to study STEM).

How would my life have been different if I had studied at the same time as the OP? Well, I wouldn’t have felt as free in my twenties and thirties. Knowing that you are going to pay £X per month for 30 years whilst the principal never reduces is pretty bloody depressing isn’t it?

OP, I get why you are annoyed, conceptually. My generation had it so easy by comparison. YANBU for being annoyed. However, I think it is about accepting the way things are (easy for me to say, I realise).

It made me think of the ‘back to 60’ pension campaign (which I don’t support) actually. Previous generations got to retire at 60. Not me. Such is life. You can’t get too worked up over it. It’s not good for you.

I wish you well with your career, OP.

And yes, I understand the maths. It is not a million miles away from being in marginal rate corporation tax.

... and curiously enough, @Pixxie7, all of those things have got worse along with general inequality as the concept of the public sector has been destroyed - including the concept of free education. There is the issue of how much education we should have. As various pp have said, at one time free education past school was rather more limited than it has since become. Free training, however, was not: training in practical skills has taken a huge backstep.

I’d like to hear more from @titchy. Are you a government economist? Or David Willetts?

I work in HE, quite senior. Part of my role is scoping policy.

Such is life. You can’t get too worked up over it. It’s not good for you.

Neither is not getting worked up about it, and watching rights, freedoms and protective laws being dismantled without making a murmur.

At least the waspi women have paid for what they have lost. Totally different scenario.

Its not unknown. I didn't get a loan as i worked and saved for a couple of years (yes parents paid for my food as lived at home) as my parents couldnt afford to top up anything. I was lucky as nhs course paid fees but working in the holiday meant with the money id saved i could scrap together without a loan. Couldnt have done it now as nhs course you pay fees now. Personally id advised against uni now unless you need a degree for the job you want. Having that huge debt just as you start your working life!

The thing is, @ImGoingToBangYourHeadsTogether, the OP can still challenge inequality whilst not allowing this one thing to ruin her enjoyment of her successful career in her twenties.

When you say government, I do hope you do not mean this government. When did student loans come in?

@SucksToBeMee as I explained in my first post to you, my loan was in NZ where they brought in the student loan system almost twenty years ago. The interest rate I was charged was 7% so more than you, and my loan was equal to 38k today. I took the minimum loan by working while studying, then working full time plus a part time job once I graduated. I paid it off quickly because I was motivated and had a goal.

Here’s the sting in the tail - students in NZ now get their first year free and providing they remain working in NZ, pay no interest. So I got screwed

It comes back to this: do you want to build a better life? Then if so, it’s going to take hard work - including paying off a student loan.

Well said @Pixxie7

Don’t let’s derail into bloody pensions. The other thread established conclusively that (1) the country can’t afford for anybody to retire at 60 and draw state pension for 30 years and (2) the NI contributions most women paid don’t come close to what the state pensions they draw cost the taxpayer.

Kind of ironic that the OP is getting a kicking for the cost to the taxpayer of 50% of young people going to university. I suppose we should be using the money so that 62 year olds can retire. Yes. That would be the best thing for Britain.

@Pixxie7
Why should taxpayers pay for your higher education and living expenses for 3 or 4 years so you can get a job with a high salary? Meanwhile we have children living in poverty

Is this aimed at me? If so I'm not really sure what you're getting at because I have no point said I wasn't okay with paying my tuition fees off. I didn't say I expect a free university education anywhere. I said the loans shouldn't have such a massive amount of interest that make it near impossible to pay off.

Also, I was one of those children. This loan system is penalisation for those poorer children you speak of who end up going to uni and earning a good salary. The precise reason why the current tuition fees piss me off so much is it affects these poorer deprived children the most!!!

@Iamthewombat
That is dedication reading through all these posts! I'm only just about keeping up with them at this point appreciate your response.

Scotland still has free higher education for Scottish students but home student numbers are in comparison to England severely capped. So their system is essentially the same as the system we had pre tuition fees and loans. The criticism of the Scottish system is there aren’t as many students in university from non traditional backgrounds as in England. So if you want increased access then payment becomes necessary

Op but much of it is never paid off if people don’t earn enough it is written off. Also in reality although the interest appears high in comparison to the current mortgage rate in reality it is still relatively low to in comparison to other loans. You are reaping the benefits of your investment in your future.

That’s not what waspi is about it’s all to do with the way it was brought in.

I don't like this system either. It's the worst of both worlds. I can't see the logic of a system in which most loans won't be repaid. It's like a system of student grants but with the additional costs of collecting payments once students graduate. If student loans are just like a graduate tax, then why not have a real graduate tax instead? I think there is research which shows that people from poorer backgrounds are more deterred from going to university than people from better off families so I think student loans don't help social mobility.

AndromedaPerseus Scotland still has free higher education for Scottish students but home student numbers are in comparison to England severely capped. So their system is essentially the same as the system we had pre tuition fees and loans. The criticism of the Scottish system is there aren’t as many students in university from non traditional backgrounds as in England. So if you want increased access then payment becomes necessary

Agreed, and adding that the Scottish universities are also very under-funded now, with students regularly complaining of lower contact hours and redundancies and reduced terms and conditions for staff (one university at which a friend worked gave teaching staff a choice between a 10% pay cut and reduced pension entitlement or compulsory redundancies, strikes resulted, students missed exams and got marks late).

@SucksToBeMee perhaps the government looked at the options? Support you to get your degree so you have higher earnings in your bank account, or use that money to hire more emergency services, more teachers, carers for the elderly etc... If they opt for you, they need to make it worthwhile.

It costs money to build and maintain academic facilities, put whiteboards on the walls, books in the library, pay professional and academic staff to support you in your learning, install the seats you rest your arse on and provide heat and lighting. It costs money. If you can’t pay up front, then you have to pay interest. There’s no guarantee if Lloyd’s or HSBC lent you the money for your degree and costs that you’d pay it back. They probably wouldn’t take a chance on you. The student loans system are taking a chance on you with the likelihood you won’t repay their investment.

Think carefully. Interest paid under the student loan system is configured into the ROI. The alternative is restricting access to further education and then its likely you wouldn’t get to visit the campus, let alone study there.

If you want something you pay for it, and if you don’t think the interest rate is fair, then pay cash up front.

titchy not at all my experience back in the 70s\80s. I left school with a handful of O levels, worked in a shop for a few years. Most of us shopgirls (and boys) went to evening classes of one sort or another. I had at least one subject a year that I was studying every year from leaving school at 16 until I went to Uni at 34.

When dd was well settled at school I started doing various classes with the OU until I could no longer afford it thanks to Mr Blair.

@QueenoftheNowhereverse

you want something you pay for it, and if you don’t think the interest rate is fair, then pay cash up front.

Sorry, you're applying this final sentence to 50k tuition fees? Of course like most of the country, I didn't have a spare 50k of cash at the age of 17 to pay for uni so was forced into the unfair interest rates...which might I add at the time were not at all clear as it was the first year this loan plan was introduced and there seemed to be mass nationwide misunderstandings going on about how it will all work.

As I said, I'm more than happy to pay back the tuition fee loan I borrowed. I'm not happy about probably paying double what I ever borrowed thanks to interest rates and not having a choice about it.

My choices at the age of 17 were to not go uni/higher the chances of staying in poverty, or take out this loan where I'm now going to end up paying much more in total for my uni education than those born into wealth who were able to pay upfront. We all also had a short time limit to decide which way to go once the new plans were announced.

If I was just paying back my 50k loan (even with interest to bring it in line with current monetary value) that's fine. But I won't just be doing that. I'll instead be paying much more than I ever borrowed. This is what I'm saying is unfair in my situation.