Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Original poster

AIBU to ask if you have a Student Loan, what is the estimated time-frame of clearing it? Was it worth it?

184 replies

christmastreesparklex · 10/12/2020 17:24

Hi all

I graduated in 2013 and have £10,000 remaining on my student loan (Plan 1). I have calculated on my current salary that it will take me approximately 7 years (assuming a year out for maternity leave in the future) before I will have paid it off completely. On my current salary it is deducting approximately £150.00 each month, so definitely a noticeable deduction. The interest on the PAYE statements is currently 1.75%.

I am in two minds whether to start making additional payments to pay the salary off early to reduce the total amount paid due to the interest. I am also mindful that the earlier I pay it off, the higher my monthly salary will be in the future, particularly during the years I (hopefully) have children and nursery fees will be extortionate! I was looking for some advice if possible and also welcome a general discussion from those who also have a loan- if you are interested, you can calculate an estimate on when you will pay the student loan off via the link below:

www.student-loan-calculator.co.uk/

For those who don't mind sharing (AIBU!) what is your estimated time period for you paying off your Student Loan? Do you think it was worth the loan and would you have still gone down this route if you could go back in time? For me personally, I did a vocational university degree so I would not have been able to progress in my career without it, so I would say it was worth it! My DP does not have the same experience and is in fact in a completely different field which did not require any degree!

For those who have already paid their loan off, has it been noticeable on your monthly salary? I imagine it must have felt rewarding having made the last payment and finally free of your student loan!

I know with the Plan 2 student loans, the course fees and interest rates were higher and therefore; a considerable amount of students will not make the full payment in the time period before it is wiped. I suppose in this situation, making early payments would not be advised as you may end up paying more?

OP posts:
ListeningQuietly · 11/12/2020 20:56

So you essentially wasted 7.5k on a debt that they won't chase and you're unlikely to ever be eligible to pay back...
When I did my degree we got

  • free tuition
  • maintenance grants
  • housing benefit in the holidays
  • unemployment benefit each summer

Nowadays kids get

  • £9250 per year bill for tuition
  • £6000 per year bill for the same rooms I stayed in
  • no benefits
  • no grants
Northernsoullover · 11/12/2020 20:58

@FAQs

The amount taken from your salary is taken into account when applying for a mortgage!
I won't get a mortgage without my degree. I would never earn enough. Choose your degree wisely.
ZolaGrey · 11/12/2020 21:34

@ListeningQuietly

So you essentially wasted 7.5k on a debt that they won't chase and you're unlikely to ever be eligible to pay back... When I did my degree we got
  • free tuition
  • maintenance grants
  • housing benefit in the holidays
  • unemployment benefit each summer

Nowadays kids get

  • £9250 per year bill for tuition
  • £6000 per year bill for the same rooms I stayed in
  • no benefits
  • no grants

I know what students get now. I am one.

vanillandhoney · 11/12/2020 21:47

I'll never pay mine off. I took out 9k and I think it's at about 16k now? I've paid back around £200 overall Grin

I never earned enough to pay off anything more than that.

MustardMitt · 12/12/2020 17:33

@FAQs

The amount taken from your salary is taken into account when applying for a mortgage!
Only in as much as they’re interested in your net salary.
sbhydrogen · 12/12/2020 18:21

I don't have a student loan (never went to uni) but I don't see the point in spending more money interest, so I'd chuck as much as you can at it. I recently paid off my 3 year car two years early and that extra money in my bank account every month is SO good.

sbhydrogen · 12/12/2020 18:23

...Unless you put some extra money in some investment, so your return there is greater than the interest owed over a long period of time 🤷‍♀️

ListeningQuietly · 12/12/2020 18:25

@sbhydrogen

I don't have a student loan (never went to uni) but I don't see the point in spending more money interest, so I'd chuck as much as you can at it. I recently paid off my 3 year car two years early and that extra money in my bank account every month is SO good.
but the repayment through your salary is NOT affected by the reduction in the balance
UrAWizHarry · 12/12/2020 19:56

@sbhydrogen

I don't have a student loan (never went to uni) but I don't see the point in spending more money interest, so I'd chuck as much as you can at it. I recently paid off my 3 year car two years early and that extra money in my bank account every month is SO good.
This is terrible advice. Depending upon your loan type a student can actually end up paying more by overpaying on a loan which they would otherwise have written off.

Student loans for many are, in effect, a graduate tax.

PreRaphaeliteMotherhood · 12/12/2020 20:03

Graduated in 2015, should be paid off fairly soon. I did a healthcare degree though so no tuition fees and only basic loan rate. If I wasn’t already on my second lot of maternity leave, it would be done already I think.

vanillandhoney · 12/12/2020 20:11

@sbhydrogen

I don't have a student loan (never went to uni) but I don't see the point in spending more money interest, so I'd chuck as much as you can at it. I recently paid off my 3 year car two years early and that extra money in my bank account every month is SO good.
Very poor advice.

The less you earn, the less you pay back. By overpaying, you could actually end up paying back MORE money than if you just let it be taken from your salary.

Athinginitself · 12/12/2020 20:13

Graduated in 2003..I'm not sure how long I have to go maybe around 3 years, would have been a lot shorter but I have only been able to work p/t for the last 8 years due to health issues. Will be glad to see the back of it now!

gillianan · 12/12/2020 21:34

@vanillandhoney if you know you are earning enough to have to pay it back and will likely do so before the cut off point, then its very wise to Pay it off as early as possible and save on interest.
its only not wise if you aren't going to ever pay it off.

ListeningQuietly · 12/12/2020 21:41

[quote gillianan]@vanillandhoney if you know you are earning enough to have to pay it back and will likely do so before the cut off point, then its very wise to Pay it off as early as possible and save on interest.
its only not wise if you aren't going to ever pay it off.[/quote]
Utter rubbish advice
as the repayments are linked to earnings not debt
and P45s can turn up any time
and stop payments right away

gillianan · 12/12/2020 21:44

yeah ok love, keep throwing your money away. my debt is long gone and i saved a fortune paying it off early instead of the additional 10 yrs interest I could have had added.

CakeRequired · 12/12/2020 22:16

Mine was worth it as it got me in the door quicker than other people managed. It wasn't worth it for the educational basis, as not much of what I learnt has actually been helpful. Grin

I just don't think about it. I pay it off each month from my pay, I don't even know what I owe to be honest. Its not a big deal in my mind as it was necessary, kind of like my mortgage. The other loans I have get more of my attention, although they were necessary too but they have higher interest rates.

Scottishskifun · 12/12/2020 22:25

It took me 10 years to clear mine (15k) I wouldn't say there is much point overpaying it unless you are near paying it off but definitely keep an eye on it and not just the annual statement do your own sums.

The reason being is if you only have say £500 on it and would finish paying it off in April then due to the way they do them in the tax year (all funds have to be cleared by March BTW) they will keep charging you until the P60 comes through (usually around aug/Sept) and then you have to prove that you have over paid and claim it back all while still paying!

I nearly got caught by this and thankfully had enough money in savings to just pay the last £500 in Feb as a one off payment and cleared it before the next tax year started. I would have otherwise overpaid by about £1500 by the time it got to them stopping taking payments.

Sparklesocks · 12/12/2020 22:33

Just checked and I have about 12k left which I should in theory pay off in another 8 years - oof. I graduated in 2009, a decent chunk of interest has generated.

I wouldn’t overpay personally, it’s not like a mortgage etc and it doesn’t affect your credit score (although mortgage lenders may take it into account as part of affordability checks). But as @Scottishskifun says it’s good to keep an eye on it.

I have some friends who don’t meet the threshold or do just barely and most likely never will pay it all back.

Baws · 13/12/2020 00:53

I graduated in 1998 and should have paid that one off by October 2021. 😳 My ‘new style’ loan will be paid off at the end of next month. Under the terms I originally signed up for my old style one would have been written off after 10 years of me earning under the threshold but it was sold to another company. This company decided that the outstanding amount was due in full last month so I had to take out a personal loan to cover it. I’m currently paying £410 a month on student loans which is around 17% of my monthly wage! 😳

cachedelete · 13/12/2020 04:07

Since 2002 I've only had a couple of years when I've exceeded threshold and even then only paid off the interest earned in a year. I don't expect to ever pay it off and don't think about it- wasn't an issue for mortgage as I wasn't paying anything towards it.

DP (met at uni) paid his off a couple of years ago - but has used the same degree to much better effect ;-)

Theworkwitch · 13/12/2020 04:08

@Baws

This doesn't sound right at all!! What the hell happened??

BarbaraofSeville · 13/12/2020 06:53

This company decided that the outstanding amount was due in full last month so I had to take out a personal loan to cover it. I’m currently paying £410 a month on student loans which is around 17% of my monthly wage

Surely they can't change the terms you signed up to like that?

Did you take independent advice before you started repaying something you hadn't contractually agreed to?

I've never had student loans (I went part time as a mature student and my employer paid the fees, I highly recommend it) so don't know about this, but I'd suggest looking on Moneysavingexpert because they're very good with advice on fighting off debt collectors trying to extract money from people who don't actually owe it.

Theworkwitch · 13/12/2020 07:44

Just to say that I graduated when you did and have received many settlement offer letters over the years, but they are absolutely not a demand for payment.

custardbear · 13/12/2020 07:47

I borrowed around 10-12k between 1995-2000. I did a PhD straight afterwards so didn't start paying it off til well after that because the amount I had to earn before I had to start paying it back was always a bit more than I was on -
One year my salary was 50p below the threshold so got off that year lol 😆
I think it took around 10'years then to finally pay off in 2019 ish it was just one of the billsI had a month really so didn't pay much attention to it, definitely worth it for me

FudgeSundae · 13/12/2020 08:36

@ListeningQuietly it’s not rubbish advice. If you have a profession and you know you will pay off your loan 20 years before it’s written off, paying more interest because “P45s can turn up any time” doesn’t make sense. I could see I would pay mine off within 2 years and we needed the income more than the capital because childcare was tight. Plus banks are paying a lot less interest than my loan was charging.

Agreed that if you might not pay off your loan it’s not worth it, and that will be the case for many /most. But not for everyone!