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.

@SucksToBeMee oh yes well when I was at university the students from lower income backgrounds had grants rather than loans and these did not have to be paid back - I do appreciate this has changed now. Don’t even get me started on the fact that the max loan I could take out didn’t even cover my halls of residence cost!

And my parents wouldn't pay a thing to my uni course, I had to take out a private bank loan and do a year out to pay it off and because they wouldn't I couldn't get any emergency help from the uni. Nothing I could do about it. No one is forced to pay the recommended contribution.

It simply isn't true that parents assessed to do so contribute, or even those who aren't assessed and are expected to.
You'd be shocked how many just point blank refuse.

Slightly off topic, but it annoys me that so many youngsters are lured into over-subscribed or useless courses at lesser universities and run up huge debts, with no chance of ever getting a graduate level job after they finish.
In my day, only 10% of kids went to uni. They were covered by free (non repayable) grants.
Other kids got apprenticeships or were recruited by firms straight after A levels. It’s insane to think we need 50% of the population to be graduates, and unkind to give kids unrealistic expectations. I’d rather we cut the number of places and funded them properly.

At least you were support through uni though. I had to pay almost double your fees in cash upfront. Almost couldn’t finish my degree as a result. I’d choose debt and access to education over no access any day.

I will pay them probably double what I initially owed them over the next 30 years
No, you will pay them triple what you borrowed over the 30 year term. Using a good online student loan calculator with reasonable assumptions for RPI and salary growth you will pay back £148,340 before the debt is wiped. It is not as bad as it sounds, as you should earn around £3.5m over that period, and your salary in the 30th year will be about £195,000.

It drives me mad and most People who argue with me about this were at university when it was free or £3k!!!

Yes, I did my degree before tuition fess were introduced.
I also worked for many, many years when my net salary was only ever 2/3 of my gross salary.
Because ten, everyone paid 1/3 of their salary in tax and NI contributions.

There wasn't a massive £11K odd that you could earn before paying tax. There wasn't a 22% tax on the rest of your salary - I think it was 29% in mid 80s , then your NI on top.

At least now people that didn't benefit from going to university don't have to pay as much tax, it is 'taxed' from you once you are earning over £25K . It doesn't matter how much interest is added - your repayments stay the same. However, if you go through a time when you aren't earning £25K - maybe you are unemployed or starting your own business or part time or a stay at home parent or a carer or you become ill or have an accident and can't work for a while etc etc, then your payments stop.

You have to think of it as a tax and not a loan.

If, as a result of your degree, you achieve the kind of salary where you will repay, it's only right that you contribute by paying this "tax" IMO.

@LoyaltyBonus

I'm more than happy to have a student loan and slowly pay it off.

BUT

Wealthier students who have their parents give them money still get a degree with a good salary and don't have tens of thousands taken off them, and those who were the poorest and manage to "go up" in life end up paying the most back (and OVER paying much more than they owed in the first place thanks to outrageous interest rates)

You think that's a fair system?

It is not a typical debt... It doesn't affect your credit rating in any way.
It has enabled most from poor backgrounds (assuming they worked hard to get a 2:2+ in a worthwhile degree) to get a bit of social mobility and earn more than minimum wage and enjoy a better life style at the cost of repayments... I know what I'd rather....

Under plan 2 it’s 30 years, under plan 1 25 unless you’re Scottish then it’s 30 years. Mortgage providers will ask about student loans as they have to under the affordability review - this is a requirement mandated by the FCA, mortgage providers no longer make mortgage offers solely based on multiples of salaries on receipt of payslips, they must take into consideration all of your outgoings and also apply a stress test.

Many will be paying into their 50s, paying it off just in time to start paying for their own kids to go.

YANBU OP the interest is outrageous and yes it’s more like a tax but I wouldn’t be happy about paying an extra 9% tax.

@SucksToBeMee well I suppose part of the problem is too many people go to university now as all of the former higher education colleges etc have become ‘universities’ so it’s just not possible for all the extra thousands of students to receive free tuition like they did when only 5% of people went to university or whatever!

@@TabbyMumz Was it 9k a year as opposed to 9k a term as it is now for tuition fees?

Eh? Tuition fees in England are now a maximum of £9250 a year. Not per term!

By the time my DS finished uni he owed £14k just in interest, on top of the actual loan, it is outrageous.

@OP I get your point. They should treat them like mortgages with early repayment fees.

What worries me is that they move the goal posts and when you die the state seizes your assets cars, jewellery, art, second home, main home up to the value of the loan
Or

Your children are made to stump up

I hate these times we are living in
It’s like we’ are building our houses in shifting sands while wailing at the sea in the hope we can hold it back

And if anyone thinks that can’t happen
I never thought our nurses would pay to learn how to nurse

babdoc the problem when only 10% of the population went to university is that certain groups were massively underrepresented..... specifically working class people and those from lower socioeconomic groups.

I do agree with Babdoc though.

There just aren't the 'decent' jobs you used to be able to get after A-levels anymore. It's a bt 'chicken and egg' though, in that it used to be that only 10% went to university, so probably the next 'most able' 35 - 40% were able to get reasonable jobs. Now, employers know that 40% (45%? 50%?) go to university, then that cohort they used to employ probably go to university now, so it means the employers ask for graduates and the circle goes round as those kids that aren't bothered about university feel they need to.

I feel extremely sorry for students and young people paying off student loans today. I'm old enough to have attended university for 'free'. Fees came in just as I completed my degree. I even remember maintenance grants (do they still exist?). I didn't qualify for one but I remember my friends who did and who received money from the government to study - money they didn't have to pay back.

I took out student loans totalling around £4K - seemed an absolute fortune to me back then - and repaid the lot in about 3 years. I completely agree students today have been royally shafted. When I explain all of this to the 20- somethings in my office who have £40k of debt hanging around their necks they just look at me blankly. It's all completely normal as far as they're concerned.

If my DC want to go to Uni I'll encourage them to study abroad in another European country (DP's home country): better quality education for a fraction of the price.

@SucksToBeMee it's not fair that students with wealthier parents have less debt, it's not fair that they'll never have to worry about a deposit for a house etc etc either but that's no reason for much poorer tax payers to support the "poor" students who have benefited from a university education that now makes them high earners.

I suspect the the threshold when graduates have to start repaying their loans will be lowered when the government realises not enough people will be replaying back their loans and they will be left with a black hole of a debt. This is what happened in Australia.

You can have a 48 year old career changer who ends up still being liable to repay at 78 out of her pension! But assuming they graduated at 51, they will have it wiped at 81. And of course the actual repayments will go down when she retires - assuming she retires on 50% of her earnings, then the repayments will also go down by 50%.

Do people realise the interest rate on student loans is 3% + RPI? It's currently at 6.6% Only if you're earning more than £46k. Under £25k it's RPI, in between its on a sliding scale.

www.moneysavingexpert.com/students/repay-post-2012-student-loan/

@Babdoc this!

notgreen it has effected mine since being sold on as it now appears on my credit score as a loan in "payment holiday" to a private firm and one which I have previously defaulted on, after they tried to take money without my knowledge when in deferment.

andromeda no they just sell the debt on to private debt collection firms in the uk. At least they have with previous years.

I think it's credit record not score, sorry. The thing that shows your credit history anyway.