Advice on student loan please

[Ste23321]

Please can someone give me advice, just been on phone to SLC and they not helpful at all.

I’ve been avoiding thinking about this as it just causes anxiety but I need to sort out:

Took out first student loan for undergraduate degree in 2001. Then did my post grad and took another out. Was in full time work for the next 10 years and over around £200-300 came out every month from pay into SL. Then had kids, took maternity leave and went to work part time. Had a couple of years of not working at all. during this time interest still being added to my balance so balance kept going up.

I just phoned SLC to get balance and been told my balance is just over £13,000! Bear in mind original was something like £16-19(I’ve got login in details now so can get exact figure later). I’m just shocked that after all these years of paying it’s still so high. I know it’s because of the interest rate (the advisor said it varies snd right now is 1.1%). I heard it gets written off at some point abs advisor said for me will be when I’m 65 years old.

I’m confused what to do. I’m actually thinking of giving up work do will be adding to this. He said I can make voluntary contributions too.

Please help me I’m feeling so anxious.

Apologies for typos. I’m so stressed right now.

Stop thinking of it as a debt, think of it as a tax on your earnings.

Sorry to hear you are feeling anxious? In what way can we help? Can you be more specific, reassurance? Or how to pay it off?

I have a similar life history to you. To be honest, I never look at it. It has no impact on my life. When my yearly statements come through I just file them. The money comes out of my pay before I ever see it, so I don't miss it as I've never had it. The loan doesn't impact on applying for mortgages or other loans. I just see it as another tax on my wage.

I'm the same age as you, we got royally screwed by student loans. Students now have higher loans but a shorter payback time. If you're giving up work you'll never pay it back and that's ok it's not like credit card debt etc they won't chase you for it. They'll just start taking it again if you start working again and earn over the threshold

Don’t be stressed, it’s not a real debt.
Mine is over £60000 and increasing by hundreds every month. I’m never going to pay it off.

Martin Lewis on money saving expert has a lot of reading on student loans. Best to look there rather than any if us guess your situation.

However as pp says its a graduate tax not a loan - you will pay 9%? Of anything you earn over a certain amount until it is paid...or you reach 65. So work out the threshold compare that to your likely earnings and see where that gets you. I wouldn't let it stop you taking a period of time out with you kids though or whatever you plan as it will likely not make any difference to what you pay anyway.

You can use money saving expert calculators to work out if it is worth making voluntary contributions or not.
I don’t know much about the old style loans as mine is a new one, I have about 60k owing and I’ll never pay it back, can’t imagine my payments will even cover interest.

Just ignore it and live your life. If you work, you'll pay a bit more back, if you don't then you won't.

The whole system is ridiculous, it's Monopoly money at this point.

First thing is to actually check your details.
Second thing is to recognise that you took and benefited from these loans, and have also benefitted from very generous terms that allowed you not to repay when working part time or not at all or on multiple maternity leaves.
And now you don’t want to work, because you have to pay back what you owe?
Even though you won’t pay it back pound for pound from your earnings?
We should all be so well off as to decide not to work to avoid paying what we owe 🙄
If you can afford to stop working to avoid it, you can afford to pay the small amount from your wages to repay it.
Get online, work out what you owe and just start paying it.

Sorry everyone I was panicking!

@Merriwicks my question is:

a) should I just pay back chunks off to stop it increasing (I have some savings so could do this)

or b) just keep paying back monthly contributions

Issue is it keeps increasing so it makes me stressed. I know others in my uni payed it all back as extra contributions.

@Cocomarine no I was considering giving my notice in to leave work as I’m stressed. I’m NOT stopping work as I have to pay back the loan!

@daisyjgrey but will I end up paying more back in long run? I will go back to work at some point full time and earn more money. Kids are small yet so I’m planning to take a career break. I’m worried when I return to work the loan will be very high

You only pay it back when you are working and earning a certain amount, so it really does make sense to think of it as a tax.

If you feel it is hanging over you then yes you can make extra payments, but really what is the financial point? Youre not penalised for not paying it back, and its wiped when you hit 65.

I did make extra payments to get rid of it quicker, but thats because repaying from abroad is a total ballache and I wanted to be free of that every month. Plus I got an unrelated pay out.

@StrictlyAFemaleFemale yes I feel it’s hanging over my head.

The answer is b)
It would make zero sense to make extra contributions - it is written off if not paid at 30 years.
As many PPs here have said - this isn't like a credit card debt.

@daimbarsatemydogsbone thank you.

X post.

You are not paying back more in the long run as the intetest you pay is the rate of inflation. So if you borrowed enough to fill a shopping trolley in 2001 you pay back the cost of that same trolleys contents in 2022. The number of pounds paid back will be higher, but the value will be the same. Does that make sense?

[quote Ste23321]@Cocomarine no I was considering giving my notice in to leave work as I’m stressed. I’m NOT stopping work as I have to pay back the loan![/quote]
I’m glad I was wrong about that!

The details are your friend, here.
It doesn’t matter that the debt is increasing if you’ll never pay it off. That’s what you need to work out - how old you are, when it is written off, what your likely earnings are until then. Of course your income might increase unexpectedly, but you’ll always see something of the increase, not lose it all to student loan.

Once you’ve looked at the detail, you’ll know whether it’s worth paying some off. Based on the little you’ve posted her - I very much doubt it! As others have said, it’s often better to live with it financially and mentally as a tax.

Barely anyone pays them off before they die. It’s like a debt nobody has to worry about. They won’t chase you for it, you’ll only have to start repaying when you earn over the threshold again.

@Cocomarine thanks.

The issue is I will be earning more in the future. Right now I’m giving up work as my kids are stressed but will be temping (supply teaching) so buts will come out weekly but not much. After 5 years I’ll go back to a head of department job which is very well paid but stressful hence I’m leaving now.

In my head the loan is increasing but I need to stop looking at it like a credit card loan (btw I’ve never used credit cards, that’s why I feel I’m stressing so much)

Omg! I’m so sorry for the typos and not making sense. Obviously I meant kids are small! Lol I better not write anything now till I can focus. Just feeding little one and typing this

[quote Ste23321]@daisyjgrey but will I end up paying more back in long run? I will go back to work at some point full time and earn more money. Kids are small yet so I’m planning to take a career break. I’m worried when I return to work the loan will be very high[/quote]

Well yes the debt will increase due to interest but you'll pay it off at the same rate regardless of if it was 2k or 200k. It's whatever the % of your income based on the loan banding and the year you graduated.

So if you pay nothing for ten years say, and then start working and earning 30k, you'll pay whatever the percentage that is applicable to you of your earnings; you're just picking it up where you left off.

You'd be hard pushed to find a financial advisor who recommends paying back chunks of student finance/paying the balance early.

Also, the only people who tend to get shirty about people not paying student loans off are people who went to uni/had the opportunity to take advantage of either no fees or very low fees, nothing like we have now, so try and ignore that faction.

Honestly OP just leave it to ticking over in the background. It will get written off at 65. Why bother putting yourself out of pocket for what is basically made up money.

They can't chase you for it, as in the terms of the agreement, it was only ever repayable if you earn over X amount. If you don't earn over X amount, then it's not repayable.

Of you do, they will claim the minimum repayment through your wages, and they are happy with that.

Step away from panic mode OP. It will be fine honestly.

@Ste23321

Please can someone give me advice, just been on phone to SLC and they not helpful at all.

I’ve been avoiding thinking about this as it just causes anxiety but I need to sort out:

Took out first student loan for undergraduate degree in 2001. Then did my post grad and took another out. Was in full time work for the next 10 years and over around £200-300 came out every month from pay into SL. Then had kids, took maternity leave and went to work part time. Had a couple of years of not working at all. during this time interest still being added to my balance so balance kept going up.

I just phoned SLC to get balance and been told my balance is just over £13,000! Bear in mind original was something like £16-19(I’ve got login in details now so can get exact figure later). I’m just shocked that after all these years of paying it’s still so high. I know it’s because of the interest rate (the advisor said it varies snd right now is 1.1%). I heard it gets written off at some point abs advisor said for me will be when I’m 65 years old.

I’m confused what to do. I’m actually thinking of giving up work do will be adding to this. He said I can make voluntary contributions too.

Please help me I’m feeling so anxious.

£250 x 12 months x 10 years = £30,000 repayments. On a £19,000 loan at 1.1% interest?

The sums don’t add up.

Are you sure that’s what you’ve been repaying?

Just ignore it! The only point of paying it back voluntarily is if you go straight into a megabucks job and can pay it back thus saving yourself a load of interest. Most people just let them run. I will be finishing paying mine off in March… 23 years after I went to uni! I’ve earned anywhere between 15k and 50k per annum in that time and I just see it as ‘I pay a bit off when I'm better off’. It never stopped me getting a mortgage etc.