To wonder why anyone rushes to pay off their student finance?

[ChoppedChorizo]

A couple of friends of mine make regular overpayments with a view to paying it off quicker. Some have used inheritance to clear it. I don’t understand the motivation? The lot gets written off if you haven’t paid by X number of years.

Mine has continued to increase - I started uni in 2012 so my fees were around £7k per year. Plus living. It sits around £23k now.

Ive earned well enough but did a post grad (self funded) two years of training on the job and then had children and so two years of mat leave.

I don’t see the motivation to pay it off sooner.

Who said I was below the threshold? Are you directing that at me?

Why doesn’t it makes sense? You will pay more interest paying your loan off slowly, you
specifically on your income will pay more interest.
It’s not 4.5 isn’t rock bottom interest. In many cases it does make sense to pay it off. Why are you making it seem like it’s a cut and dry case for everyone?
If you don’t have the spare money to overpay then you’re simply working with the financial situation you have, that doesn’t mean it doesn’t make financial sense to clear it early though.

Not at all. Your OP came over as if you were earning below the threshold. Rather than earning over £60k annually. If it's going to be written off at some stage - at £263 a month - how ever much were you able to borrow?

I’ve said it earlier on the thread - but view my mortgage, which has a similar interest rate but a much, much larger amount of capital and will never get written off a priority vs student loans.

Firstly, you made an assumption re my earnings. I didn’t divulge anything until quite late on.

Secondly - how much you can borrow has no interlink between your future earning potential. I’m not clear why you’ve raised that?

But on a 60k salary you will pay it off before, hence you will pay more interest than needed.
Why do you keep banging on about it being written off?

You asked a question. People answered it. Ultimately, if you don't want to overpay your student loan repayments, just don't. You're the only one that's rattled by this. Or the only one that has a vested interest in your student loan. At £263pcm, it won't hang around for 25yrs. Unless it's a lot of money or you're planning on earning less. Or whatever.

I discovered this about 18 months after mine got sold off, without my consent. It's knowledge that has served me well!

I currently pay 9% of my income over 27k to my student loan. I owed 40k 8 years ago and that's now increased to 48k! Only in the last couple of years have I actually paid off more than the interest but I am on track to pay it off eventually. Id rather get rid of it as fast as possible.

My student loan increases insanely each year; I did a 5 year degree and it currently sits at over £115k. I earn way over the threshold so am paying it back but last year they added over 5k in interest and I paid back 2.3k…

edited to correct the numbers

Because those of us who went to uni on plan one before z2006 don’t get them written off until we’re 65. I had 5 years at uni on the old cheap fees and ran up about 23k. After years as a low earner where the “cheap” interest meant my balance increased I now earn 59k and repay 255ish a month with approx 7k left to pay. Something terrible would have to happen for me not to pay off that 7k before I’m 65 so I can save myself interest currently at 4.something % if I pay it off in one go. Plus I “earn” 255ish extra a month as my pay packet increases.

And it does affect mortgages. Mortgage lenders look at your wage slips. They judge affordability on take home pay.

Because I earn that now and as I said that’s relatively recent, but there’s no guarantee I won’t get knocked up or earn less, or lose my earning ability. But my mortgage will still be repayable. I was interested in a discussion.

As I said above I was interested in canvassing opinion.

Thank you - I didn’t realise there were two sides to the part 1 rules that differed so drastically.

I paid mine off (albeit noting it was nowhere as big as today’s students) because I psychologically couldn’t cope with a 51% tax rate.

So I paid it off, shaving probably 2 years of payments off.

If I were ten years younger, my debt would be 4x higher though. Then it may not have made as much sense.

My younger colleagues will be stuck on that 51%+ rate for many, many years (decades) longer than me.

@Meredithwho I’m sorry that sounds so unfair! My debt pales in insignificance.

We are eating our young.

If you are so well educated, surely you are able to see that everyone’s circumstances are different?!

An individual who is a higher rate tax payer and forecast to pay it off before the 25 years may decide it’s better to get rid of it sooner, especially if on higher interest rate plan. Or their mortgage may have been fixed for 10 years when rates were lower so this is the lower of the two rates. That’s just two examples of many where it could make sense to pay off sooner

Martin Lewis is brilliant for education the majority as the population as a whole tends to be clueless about finance but his advice is not the only way forward. Others who are also educated and will make decisions based on their circumstances.

Your way isn’t the only way

The interest on it is a joke. I’m a higher earner, £85k plus bonuses annually and mine just goes bloody up! So I don’t care about mine either and certainly won’t be making overpayments just on interest

Im surprised it’s not a mis selling scandal to be honest

@Amba1998 it makes a total mockery of the system and the raise in tuition fees too. If they’e not going to be repaid the Gov are effectively subsidising the universities higher fees.

@Toomanyusernamestochoose do you feel better now?

I've got a degree in social work. I became a social worker. After 10 years I got PTSD through work
I now earn not enough to pay back said degree. I'm happy with that as the degree is worthless.

Feel better about what exactly?

You asked a question, people answered it and you still kept going on and on about your point. It works for you, that’s great but it’s not the only way. Really not that difficult to understand

Yes, they are indeed. The system is full of flaws, and doesn't even fund higher education. The universities make a loss on home students.

I went before the fees went up, interest rate was 1% above inflation which was fine until Liz Truss turned up.

I'm a high enough earner to mean that it's guaranteed I will pay it off and it's hundreds out of my salary each month.

Got it down to £5k this year and got a bonus from work. We planned to pay off a £5k holiday that we'd put on a 0% card but looking logically, why would I do that when the £5k student loan had a 5% rate on it? So I paid off the student loan and am a good few hundreds of pounds better off each month. I'm saving that in a 5% interest account so it will actually earn money and will pay off the holiday at the end of the 0% period with it.

So simple maths in my case!