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.

@septemberbaby7 There aren't enough precise figures in your posts to be certain, but it's important to remember that if you (for examples)
borrowed £20,000 in 2004 and now owe £25,000 the relative value has actually decreased by quite a bit. It may be a higher figure but it's worth less. So you have paid off some of the debt even though it doesn't look like it.

This.

I don't know what the fuss is about.

I've just paid mine off at age 41. I was on Plan 1 and took out £16000 in loans originally (4 year degree). I then did a PhD and didn't pay anything back during that time. So it has taken me around 13 years to pay off the rest of it. The last bit I just paid off was £2.5k. I decided to just do it in one lump sum as the interest was quite high (due to inflation being high) and in fact higher than anything I could have got through a savings account etc.

That s the 'affordability' bit...

University is optional. Educational institutions will soon get the message if they have a massive drop in numbers.

But they won't get a massive drop. They'll fill up with overseas students.

I was on plan 1 and paid no tuition fees as I was one of the last to get grants (graduated in 2008). So only owed around 12k. I needed a degree for my chosen career, although I also needed an MSc which was then self funded for 7k and required part time wage only. I was then employed on a training contract of less than 22k for 5 or 6 years. It was only after fully finishing training (10+ years after graduating due to how competitive my field is) that I was able to start making a dent. Thankfully once fully qualified in my area my repayments were 150pm+ so it was paid off a year ago at 37. If I'd had tuition loans too, I'd still be paying it off for a while yet.

I do think university is over-sold to young people these days. Whilst some courses will lead to great career prospects and high earnings there are some universities and courses which won’t lead to higher earnings at all and are basically a waste of money. Universities need to be much more upfront about the value of the courses they are offering.

@moneywoo well clearly I didn't because I'm sat in my (second) house that I've bought. But like I said, I submitted my payslips to the bank I used so they would have seen I had a student loan but they wouldn't have known that it's 100k plus & they never asked :)

@MrsSunshine2b The point of increased uptake at Uni was to have a more qualified workforce on a world stage. Not a cunning plan to rip off young people.
If the rest of the kids in the developed world have degrees the thinking is ours need them too.

Apprenticeship degrees are a great way to learn if you know what you want to do. And art, drama , dance don't need degrees but the college years in the early 20's put them in touch with agents and showcase their talents. So that has to be paid whatever you call the qualification.

Hi have a look at degree apprenticeship for engineering so your son gets paid.

My niece found it depressing paying it every month so every time she got a bonus it was paid off of the loan. It saved her a lot of interest and the loan completely repaid 5 years after graduation. She was on a good salary as finance and was very determined.

I would not consider university were I 18 today.

Valid points raised by the OP.

Ridiculous

My generation was part of the Labour '50% of school leavers to go to university'. My father in particular was very much on the same bandwagon believing I'd go onto magnificent things and all degrees would be highly valued.

My loan currently stands at 23k I think I left with 24k/25k on it. I originally didn't earn above the 19k to start paying it off. It then went up quicker than my pay did. I then did start paying it off but was only earning £26k a year so quite close to whatever the threshold was at that time. I'm now back to part time because of the kids and I earn half of the 24k to pay it back now. I probably won't even earn that now full time because my career has stalled.

I think I've 9 years left on it, it's a massive waste. Honestly I'll be persuading my children that unless they need a specific degree for their career then not to bother or go later in life if it helps promotion wise. I grew up with working class parents who never had social circles whereby people were earning higher salaries or in chartered careers etc. I never saw those type of people to aspire to. Our family were never teachers, surveyors, scientists, engineers etc. I never had anyone to ask and the careers service at school were dire.

What on earth can be so ‘depressing’ about paying back a few hundreds pounds every month when you’re on a healthy salary, for a loan you agreed to take on?

I have less sympathy for people who went off to uni, had their fun for three years, then chose to go into a career that didn't require their degree

More sympathy for people like healthcare workers, teachers or other people in modestly paid occupations that we need, which require a degree. For these people it works out pretty expensive, especially in careers where pay edges up slowly over time and when you are finally earning a bit more in your 40s and 50s you pay loads back and none gets written off.

Hi have a look at degree apprenticeship for engineering so your son gets paid.

Bear in mind degree apprenticeships are very competitive to get on to. There are only a fraction of all university places funded in that way.

She would have been better off saving up them bonuses for a house deposit. That just doesn't make financial sense.

You’re better off than me on Plan 1 - I was at University in 2001 so my loan won’t be written off until I’m 65. I hate it - every pay increase and things like back pay for wage increases are just wiped out by more going towards my student loan.

I don't understand why people are saying they want to wipe the loan off. Surely the point is it's not like other loans - no credit report presence or "black marks" against your score. The chances are it will come to an end before youve paid the balance. So it's just a tax. Why would you ever choose to overpay?

It’s only worth over-paying once you’ve got it down to a level where it’s clear you are definitely going to pay it off before retirement, and also if you are free of other debts.

This will apply mostly to people with decent salaries on a Plan 1.

My cousin was forced to repay hers in full by her husband, before they got married. Another condition was that she took his name instead of hyphenating. Horrible ignorant shit himself, who was too thick for uni.

You can get a refund of anything you've overpaid (e.g due to back-pay throwing the calculation out). I've never repaid a penny.

She was probably on a 50%+ marginal tax rate, which is depressing.