To say people don't realise the trap they're getting in with student loans

[septemberbaby7]

I graduated 10 years ago and I've been repaying from my salary ever since. But due to interest rates I now owe more than I did 10 years ago!

I am one of the 'lucky' ones, as I am on Plan 1 which is wiped after 25 years and my tuition fees were still approx £3k rather than £9k. The newer plans are not wiped for either 30 or 40 years.

I pg approx £70 a month which is less than the interest added. I have accepted this will be an additional tax I'll pay until my 25 years is up, as it will be wiped before paid off. Maybe if the interest was lower I would have had a chance of paying it off but no chance as it is.

I went to university as it seemed the natural progression and I wasn't sure what to do with my life. But I don't think it helped me get a job - I did an additional course after uni to get into my chosen career and a degree was not required.

At 18 you're basically signing up for a lifetime (in your working life anyway) of an additional tax when you've only just entered adulthood.

Well, you say that, bit loads of people already are saying they earn shit money, earn just above UC threshold etc

Makes you wonder what the point of going to university is if every other person is going.

I cleared my student debt because I hate being in debt and got a windfall after a bereavement. Can’t work now due to kids and health issues and feel stupid that I took the moral high ground like that when I could have a lump sum to give me a small bit of security.

I actually think the whole repayment thing is fucking sexist. Women are expected like men to get a degree for certain jobs. Except that we have to take time out for childbearing and child rearing. We can expect to be lower salaried than men especially after that age point both from the time we need off and the loss of career trajectory compared to men. We will also have smaller pensions than men who don’t have these issues to juggle. I think it’s really sexist not to allow for this in consideration of repaying graduate loans. It’s clearly visible in the statistics. The government just don’t want to acknowledge it.

Awful system and I assume it is putting off many students whose parents have lower incomes and can't afford to support them to go to university and who would depend solely on loans.

Taking on so much debt with no guarantee of a highly paid job at the end of it is rather depressing.

I was lucky to go to university just before the 3K tuitions started. That was bad enough, but 10K a year now is appalling.

I looked into retraining recently and had a look at courses but could not justify going into debt to do it through a university degree.

No, it's written off after 25 years if you started after 2006

www.gov.uk/repaying-your-student-loan/when-your-student-loan-gets-written-off-or-cancelled

It's true, there's an issue with student loans and the motherhood penalty. Structural sexism ftw!

https://theconversation.com/its-time-to-scrap-the-student-loans-motherhood-penalty-145194

What happens with loans in your home country if you get sick and can't work or have a low paying job?

This is the real problem.

The aim to get 50% of the population to university doing any old course and then ending up in minimum wage jobs without any of the promised financial rewards.

For those people, it hasn't opened up loads of opportunities. I know people with 3rd class degrees in pointless subjects who are earning minimum wage or doing jobs they didn't need a degree for who are 3 years behind their colleagues who started straight from school. A degree hasn't benefited them financially.

Unfortunately, not all degrees lead to high salaries and not all people are interested in being high earners. Teachers, social workers, nurses etc all degree entry careers but not with £40k starting salaries and most people who go into them wil not end up on very high salaries either. But we still need those professionals.

Maybe "lots" of people are saying they aren't paying it off quick as we are predominantly women on mumsnet so more likely to have had career breaks and part time work than our male counterparts?

At least we aren't expected to pay it off at the same rate while we are looking after our children.

Is the only point of going to university to get a high paying job? Not in my experience as someone who has two degrees, but I’m unusual on here for having this view.

I agree with you but with the costs so high, for many people learning 'just' for the sake of education isn't worth it.

You can overpay though

The very old system worked well I think. I had the oldest mortgage-style loan and was able to defer repayments every year due to being a sahm or working pt. I run a limited company now which pays me below the threshold. It's a pain to have to reapply for deferment annually but it's due to be cancelled soon and that will be a weight off my mind.

Plan 5 is for 40 years

This thread is bizarre - my student loan debt is literally over 100k (I went to uni for five years and have one year on plan two and then five years on plan 2 as left/rejoined). I genuinely forget it exists the majority of the time. I won't ever pay it off and it doesn't come into affordability when buying a house etc. I'm not saying I'm in favour of the system but I really do not understand the panic on this thread 😂

Presumably this was not Plan 2 or even typical fees on a Plan 1 either? Almost no graduate is able to pay rent and bills along with clearing between 21-55k.

@incywincyspiders it doesn't come into affordability when buying a house etc.

I don’t know why people claim this, it isn’t true. Student loan payments do get taken on board in terms of affordability calculations when getting approved for a mortgage.

It's not debt in the same way credit card or car debt is though. It doesn't count against you. It's only the amount of monthly repayments that considered on affordability for mortgages etc.
No one is expecting anyone to pay it off really.

Its just a tax. I think everyone who wants to should go to Uni. That's only going to work if young people with no money behind them can go too. I don't see why the tax payer on a low wage needs to fund that choice either.

I'm not sure why people don't pay more off. I started paying mine before I hit the threshold, some friends thought it was mad... then moaned and moaned years later about the interest.

I do think we need fewer people on 3+ year courses doing 15 hours each week and socialising the rest of the time. I had so much time that I worked and saw it as funding the fun, but a truly focused single year on coding, accountancy, business studies etc would be much more efficient and applicable to the workplace. If kids want to run up debt on a gap year, at least making it obvious to young adults that they are funding playtime would help with considering if they actually need the debt or should do a few bar shifts to pay for it.

Medicine and nursing should be optionally repaid by NHS work, I've never understood why governments moan about lack of staff then charge for degrees, it's madness.

I’m sorry but when I was that age and achieving good grades at school it wasn’t a question of ‘do you want to go to uni’ - it was ‘what uni are you applying for’. So no, I didn’t consider not going. I was the first in my family and my parents didn’t question it either as they went with what the school advised. I really was completely clueless at that age despite being book smart. You sound very judgey.

Rather than it being free to start with then it could be written down for time served in the NHS. This would be pretty standard for most other professional qualifications paid for by an employer.

@Peaceandquietandacuppa hahaa. You've literally made their point!

Its not judgy it's the truth. The options aren't as fluid as they used to be. Parents, schools and Government all have set routes they want young people to follow. Mostly based on their needs.

GRex - I also think there could be a lot of business related courses that are much shorter (even if, like with the OU, you could go back a few years later and top it up). There are foundation degrees certificates of higher education, HNDs but you don't see job adverts saying 'certificate of higher education /level 4 qualification needed' It's always graduate.

Only in that your income will have the student loan deducted.

Having the loan will not count against your credit score in the way a few credit cards and a bank loan will.

But you’re assuming that people are like you, want to have a job that pays a high salary, and are interested in paying it off. Why is your way the only way?

If your "people" don't want to follow @Overthebow's path and make efforts not to earn much (interesting goal to set off in life with), then there is no need to complain about the interest because they won't pay it.