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.

I think that originally it was a low interest loan but then the government changed the goal posts by selling the loans off to private companies and the interest rates are now punishing

The more recent loan sales (plan 1) have not resulted in changes in interest rate between those whose loans have been sold and those whose have not.

It's not a loan it's a graduate tax. I'm not sure why they even call them loans. It's misleading. You basically pay it for 30 years then it gets written off. You just need to look on it like extra tax.

I had a student loan 15 years ago in NZ, which operated under the same premise - pay 10c in the dollar once you hit the minimum threshold, and interest was charged at 7%. Now I could have not bothered with my degree, but it improved my earning capacity. I didn’t qualify for any grants or allowances, so had to do it all on my own. I came out owing 23,000 which is about 38,000 today (I didn’t do economics before someone questions my mathematical skills, I used an online calculator), and I paid it off in four years by working two jobs and being stubborn about it. It’s up to you, if you want the qualification and the associated warning potential, than that’s your sacrifice

I get where your coming from and it seems harsh but if you did have your degree would you be earning the money you do?

@Dyrne - paying anything extra off your loan would probably be the wrong decision based on what you've said and without the detail. Based on what OP has said, she is in a different situation where she would more likely be financially much worse off over time paying the minimum than she would be if she overpaid. I wanted to be clear about things with considering to determine that, because even if she doesn't want to listen there might be others in similar situations who would be financially better off if they consider their own circumstances.

• things with considering= personal facts worth considering

@rainingallday

The explaination I made that you said made no sense was specifically to do with thinking student loans as a graduate tax.

If you treat it like a tax, then it's still a tax the working class (before uni) who end up earning over the threshold have to pay the most of, and the richest who take out no loans pay the least of.

So it's not a graduate tax.

It's a loan. With a massive amount of interest making it impossible to pay back.

So have your cake and eat it too?

People all need to stop saying you pay it off after thirty years. No I don't and neither do plenty of others in their thirties. Mine only ends when I hit sixty five.

It’s totally shit (and I’m on plan 1 which gets written off at 65 or retirement - I need to double check the actual wording because if it’s retirement then we’re all screwed)

The only way I can make myself ok with it is not to look at it as a loan. It’s a tax on the additional earnings you make as a graduate for a specified number of years after graduation.

If you try to think of it as a loan you can pay back then you’ll drive yourself mad with the injustice of constantly paying out money to stand still in terms of how much you owe.

@LionelRitchieStoleMyNotebook

That absolutely sucks.
I didn't realise there were previous loans that existed where you had to pay them till your 65, and I would have hoped if there were that they were so low that most could pay them off much earlier.

Doesn't sound like the case and I'm very sorry to hear that.

So, (pressed post too soon) I’d be happy to pay 9% on the salary I earn over the national average - as I would see that as the additional salary benefit of my degree.

This... What I find ridiculously unfair is that they don’t have to honour the terms to which I signed up. They can change interest rates and repayments at any time. The interest has increased massively since I took out my loan and there’s nothing I can do about it.

And this... The high interest rates are an outrage, and break promises made when people first took out the loans (and in normal financial matters that would be unlawful, wouldn't it?) Given how easy it was for govt to break their promises on the interest rate, does anyone REALLY feel sure that debts will be written off in 30 years?

DD (26) graduated in veterinary medicine last year and now earns a reasonably good starting salary for a new graduate, maybe not so much for a graduate in their mid 20s. She was in the first cohort of students under the new loan system, having missed out on a place the previous year. Her loan statement according to a recent letter now stands at 80K+ ... she hadn't realised that interest has been accruing since day 1 of her course. She's naturally relying on the debt being wiped after 30 years and not being required to repay if she takes time off for a family, for example, but since the terms of the arrangement include a clause to the effect that the borrower must accept any changes imposed by the government of the day, which ALSO just happens to be the body that ultimately issues the loan (via the SLC), this strikes me as something of a massive conflict of interests that would not be tolerated in any other scenario.

@SucksToBeMee nope DH and I both caught in the awful mid ground where tuition fees existed, grants and bursaries were a distant memory, yet ours don't get written off until 65. We're both from working class backgrounds so had to take full maintenance loans and both worked all the way through our studies. Our joint income is now somewhere around 70-75k so not terrible and we pay around £400 a month in student loan between us.

Sucktobemee Emigrate permanently and never leave any assets in the UK for the govt to get hold of ?

When the loans first came in, I thought there would be a braindrain of STEM and other marketable students
However, I have since realised that most people, even those who haven't yet got DPs & DCs, won't emigrate

I've emigrated to Germany btw, but I'm 63 so I had free uni, BSc to STEM PhD, with full maintenance grant
With working in the summer, I actually left uni at 25 with savings, not just with zero debt.

I grew up v poor (widowed & disabled mum) and would never have gone to uni if I'd had to take out a loan - everyone was discouraging me from going so much anyway:
"ideas above your station", "get a job & support your poor mum"

@BackforGood

I'm not saying I'm in poverty at all.

I'm saying this system penalises those who came from working class backgrounds and go against the odds to make a good living for themselves the most.

How on earth can you think 6.6% interest is a fair amount on student loans for anyone?

Take my situation out of it. How are the government getting away with making student loans IMPOSSIBLE to pay off for those who took out the maximum amount (therefore those from the poorest backgrounds)

Those saying they won’t get their loans written off until they’re 65; that means you must have been at uni when Tuition fees were £1K/year, and maintenance loan was £3K/year. So graduating with a debt of £12-£15K?

How are you still going to be paying it off anywhere near the age of 65? Even with interest you’ll have paid it off long before then. Unless you fart around under the salary threshold for ages; or you went to Uni really late in life?

They are possible to pay off, if you are dedicated. I paid a higher rate of interest at 7%. I worked two jobs and threw everything at it. I had to pay rent, bills etc, but I wasn’t going to have it on my debts list forever.

@QueenoftheNowhereverse

They are possible to pay off, if you are dedicated. I paid a higher rate of interest at 7%. I worked two jobs and threw everything at it. I had to pay rent, bills etc, but I wasn’t going to have it on my debts list forever.

How were you paying 7% interest?

The loan amount also matters. 6.6% on a 50/60/70k loan is going to end up being much much more interest than 7% on a 20k loan.

Mine is from 2003....it doesn't get written off until I'm 65 I feel shafted by that but at least interest rates are lower. I took out a bit less but was already shafted by my tuition fees being based on my parents income even though I was married!

@LionelRitchieStoleMyNotebook
I'm essentially the same as you in most aspects....sucks to have a "vocation" and to be in the window that it never really gets written off

@Dyrne your figures are a bit off but mine was about £23k, but years working in the public sector meant a good chunk of time where my repayments were less than the interest, so the debt was increasing. I probably will pay it off before I'm 65 but only because I'm choosing to stay working full time, add in 5-10 years as a SAHM or going party time which would put me back in the same scenario as before and it's unlikely,

If you treat it like a tax, then it's still a tax the working class (before uni) who end up earning over the threshold have to pay the most of, and the richest who take out no loans pay the least of.

It seems you just want to rant, and are not actually listening to anyone else who is explaining it to you.
You are obsessed with this 'working class' idea and seem to think that there are gazillions of people out there whose parents pay their university tuition fees. There really, really aren't. I mean, even on MN (which is massively skewed in terms of the numbers of dc who attend private school vs the actual % of the population that attends private school), you are being told this is only done by a very, very small % of people, ad then it only makes sense if their dc are going to be very high earners.
It isn't a tax of anyone's "class" it is a tax which is entriely based on what you are earning, which is only taken from those that borrowed via a student loan. So e, a graduate's tax - the 'tax' bit coming from the fact you only pay it when you are earning enough so to do, and the amount you pay is related to your income, not the amount you owe.
So, to explain once again, as you seem a little slow to understand this, for the overwhelming majority of graduates, it would not matter one iota if they charged you £100 000 per year interest, because you still pay the same fixed amount, based on your income, however much you owe.

Part time! Although party time sounds more fun

Well yes, fair enough LionelRitchieStoleMyNotebook if you go below the repayment threshold or become a SAHM you won’t repay it, but then again if you do that you won’t be liable to pay anything anyway!