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.

raining well yes, more people from non-traditional backgrounds now go to university but there are still huge inequalities. If the percentage of people going to HE reduced to 10% again it would impact those groups of students most.

If you are wealthy, have university educated and/or professional parents you are still more likely to go to university than those who are first generation students. That is a fact.

Having the loan wiped at age 81 isn’t exactly something to be praised @MereDintofPandiculation

This is the classic response I get and the reason why I believe a lot of people don't realise how fucked we're getting

On the contrary. It seems you don’t actually understand the system.

They could put a million percent of interest on it, your payments will be the same. Only your salary change will mean a change in payments. You pay a percentage of what you earn not a percentage of what you owe. Unless you graduate as a higher rate tax payer (which is a really small number of graduates) you will never pay any of the interest and indeed will unlikely even pay back what you borrowed.

It’s shit like this that puts people off going to university.

www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

does anyone REALLY feel sure that debts will be written off in 30 years?
As another pp succinctly put it on another thread: 'watch that goalpost'.

If you are wealthy, have university educated and/or professional parents you are still more likely to go to university than those who are first generation students. That is a fact.

You understand that isn’t just because of affordability, though?

minty yes,yes I do.

I wrote 80k words on it for my PhD

Love how the person who benefited from an NHS bursary says “it isn’t a big deal” - when across the country nurses, occupational therapists and speech therapists are preparing to graduate with a £50,000 debt to go into a £23,000 job @MileyWiley

Whatever happens with future governments, I can't envisage one that is going to cancel these loans

I’m fairly certain they can’t legally change those terms of those loans after they have been taken.

@MintyMabel

I'm not sure if you've read my previous posts, but I will be paying much more than I ever owed them.

This is because I took out a huge loan due to family background and started on the higher rate tax bracket 1 year after graduating.

@AlwaysOverworkedUnderpaid I didn't get a bursary for my undergraduate and only a partial one for my masters, and graduated on a wage less than £25k with not much opportunity for it to increase.

The trouble with ignoring it (which is the best thing to do) is that when you start hitting 60k plus which I assume the op will at some point is that it's then quite a chunk out of your monthly pay.

I wrote 80k words on it for my PhD

I’m not sure why you would bring that up, then. It doesn’t seem to boost your argument. Yes more people from educated homes go to uni more, but even if we made it free for all and paid all living costs, that would still be the case.

Presumably you also know that applications from poorer students have risen since fees were introduced? In contrast to this, applications from poorer Scottish students (who don’t pay fees) have fallen.

@MintyMabel

I’m fairly certain they can’t legally change those terms of those loans after they have been taken.

They've already done this. The threshold to pay back was supposed to increase each year and the government took the decision to freeze it for a while at 21k...

Also all the dodginess with interest rates to begin with, a lot of people I've spoken to were told there would be no interest on their loans. Not sure if that was just a giant nationwide misunderstanding or what.

I have no doubt in my mind that the loan terms will change again within the next 26 years

OP I agree that it's nothing like a graduate tax in that not all graduates pay it and it's not entirely a straight, say, 40% of income over a certain amount. I also echo caution re government assurances given what's already happened with selling off loan books. It's difficult to advise what to do re overpaying particularly in light of shady decisions made subsequently with other loan agreements. I mean, to be safest the best thing to do is to get shot of it. It's all very well saying "you never have to pay it back" but as previous cohorts have found the goalposts can shift. I guess if the terms stay the same for, say, 26 years (!) you could do a couple of calculations as to how much you'd pay using different scenarios and work out what's best for you but even that is difficult as wages/circumstances can alter a lot during that span. Eg if you encounter redundancy/illness/adverse life circumstances you may well come to regret chucking £10k a year for eight years at something that gives you no tangible benefit when you could have been saving. It's hard, really.

I don’t understand this?

I have a loan. It doesn’t matter if I owe £50K or £500K. My monthly payments are still the same. I’ll never pay it off anyway so who cares what the outstanding balance is?

I’m afraid I can’t summon up much sympathy for you moaning that on your £40-50K salary you’re paying back more. You’re still only paying a % of your salary and still have more left over than most of us. My heart bleeds for you

I would never pay my children’s student loans up front just so they can be £70-100 better off per month. That’s bizzare. Surely if you had 50K spare to give your children a house deposit would be far more useful than a bit of spare cash per month?

And as for being weirdly bitter about rich families... well, if we started raging about wealth inequality; than being 9% of their salary better off per month is way, way down on the list of inequalities tbh.

I completely and utterly agree with you OP

Ive looked at the figures as has dh and they are horrendous, the interest rate is usurious

And i dont trust them as far as i can spit them when it comes to goal post moving

I’m fairly certain they can’t legally change those terms of those loans after they have been taken.

Interesting - mse seems to think they can - point 20 at the very very end of quite a long link, here:

www.moneysavingexpert.com/students/student-loans-tuition-fees-changes/

Should caveat the above by saying i dont have a problem per se with the tuition fees or paying them back

Its the interest rate i have a massive issue with

@Dyrne

Please re-read my original post. At what point did I say I'm annoyed at having to pay my student loan back each month out of my salary.

I'm annoyed at the fact the interest rates mean I will never be able to pay off my loan and will overpay by tens of thousands.

I used to view it as a tax, I graduated with £11k debt in 2005, I was paying it off at £63 a month, but the loan was still going up due to interest.

I moved away from the UK and stopped paying because the SLC now expect me to pay £230 a month as I am overseas. I gave up trying to call them as it was expensive and inconvenient with the time difference. I switched to emailing them, but the turnaround on emails was 90 days!!

I was told there’d be no interest on my student loan and was actively encouraged to take one out for my first year fees (despite paying them up front from an inheritance I had received). My balance increases year on year too as I’m paying the higher interest rate due to my earnings. I graduated in 2015 as a mature student and will be over retirement age before any balance is written off. I’m furious that I took out a SL in good faith based on 0% interest and now receive nearly more interest than I pay off! I’m with you OP; it’s disgusting!

Gawd, even more people who clearly don't understand compound interest and think it's somehow a fixed amount being paid. Please, anyone who actually has a loan, run a compound interest calculator against the full term. Look at your salary and likely future salary including inflation, look at the interest rate you're paying or could pay on a mortgage. Look at how much you will repay and what happens if you overpay. You can only control your own actions in relation to your own finances.

At 45 starting salary, you will not pay it off in full, based on an interest rate of infl + 2%. Even if you started on 55, you would still only pay what you borrowed at infl+2.

Raising the interest doesn’t mean you will pay more. You’d have to have started on 65k or more. And even then, the interest rate would make little difference.

The only people the interest rates affect is who ends up paying the debts back once they are wiped. Whether it is the new debt owners or the government.

SucksToBeMee But hardly anyone nowadays will ever pay back their student loan? You’re not unique in that respect? The overall total doesn’t matter - we’re all paying back a percentage of our salaries each month, you earn more so you’re paying more, but the proportions are the same?

I never think about the overall balance I have yet to pay back. It’s meaningless.

@MintyMabel - please go and use a compound interest calculator, then come back when you've realised why you're entirely wrong.