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.

Same for me. 5 years of ed. Started with something around 90k debt, now closer to 130k despite a very decent salary. There is just not even a tiniest point in stressing about it. It'll be wiped off before I retire and will likely reach half a million by that point.

That doesn't make any sense.

It doesn't impact credit report, if you pay a small portion of your salary net, its just part of the bundle of deducations on your salary- what is your net income is all my broker has ever cared about, I have had several mortgages and the actual amount of loan has never been considered, just how what I take home.

And I'm sorry it is a cheap loan !

Show me the bank that will borrow on those sorts of terms at that interest??? Borrow 10s of thousands of pounds and pay back something stupid like 20 quid a month if you earn 30K on a term that lasts for decades and will be written off when you reach retirement ?? If that's what you think is an expensive loan, I think you work in the wrong industry.

My first job after university paid more than double my university job. So if I'd gone home after university that would have been more efficient than spending two years pre earning to pay for it all.
Not that I did, I moved to London and spent it all on rent!

My DC owes over £140k from full maintenance and tuition loans for 6 year degree 8% daily compound interest.
Nearly impossible to work through degree and single parent family so no opportunity to help. Very depressing 🥺

Only to the extent other people kept repeating their opinion without having read my posts.

The “since you’re so well educated” comment was below the belt, don’t pretend you weren’t be snide.

I have no idea what I owe. It only ever came out of my wages a handful of times (and you had to be earning over £15k then... I was doing a lot of overtime).
I went to uni (for all of about 3 months - dropped out) in 1999. I think I only took out £3k.
I would not be surprised if it is 3 times that now. No way of checking as I never had a SLC login... I didn't have the internet back then 😅Am on UC, so not paying any back anyway.

Yeah this is me. I was only over the threshold for about 4 years and paid the lowest level back. Now SAHM for 4 years. On plan 1. Probably will go back to work and earn £20-30k. I asked chat gpt to work it all out for me and it said I would need to go back full time from next year and earn £60k to pay it off. So yeah looks like I won’t ever pay it.
i also got a return recently of the half year I worked before last baby and £500 back (or option to use it against debt!!) I opted for refund!!

So personally, when the interest rate was low I didn't bother paying extra. However when the rates started going up, it became more worthwhile making overpayments. Combined with the fact I'd hit my mortgage overpayment limit and the fact higher interest rates meant I was close to paying tax on my savings, it became the most financially sensible option (I was in a secure job and would have paid the full amount anyway due to my earnings)

@PositiveLife yes things are a bit different now the interest rates are so much higher.

According to Martin Lewis over 80% students on Plan 2 student loan would be financially better off not making any extra payments on their student loan. He says that only very high earners are likely to repay their student loan in full. Even with higher earners, it makes sense to prioritise additional mortgage payments over extra payments on student loan. This is because mortgage payments have to be made regardless of income, whereas student loans only need to be paid if you are earning above a certain threshold.

Must be hard being this much of a saint.

I don't get why no one did this

Really? You have no clue why everyone in the UK wasn't able to stay at home rent free while at uni? What a daft comment.

So because you've had several mortgages you know better than someone that has underwritten mortgages for the best part of 25 years?? I don't know a single lender who works using net income! It varies so much from person to person. So someone who puts in extra to their pension would be able to borrow less, what??? We use gross income and the bank I work for and many many others categorically deduct student loan if its on your payslip whatever you may think.
I've read some rubbish on here but someone trying to tell you what you do in your day to day job takes the biscuit!

Oh and just to add I Underwrote a case today where one person was paying £677 a month on their student loan. Definitely taken into account

The balance isn't relevant to mortgages but the monthly payment you make is and a lot of lenders will include it as a monthly deduction

I just put it into ChatGPT and it says I need to earn £130k for the next 26 years to pay it off. I earn decently now, but not that well and don’t think I’ll ever earn that well!!

I don't understand either op.

I left with £9k student debt in 2010 and it now sitting around £14k, I pay back £7 a month. Why would I choose to pay anymore?

It'll be written off when I'm 51 (30 years after graduation on plan 4).

You are contradicting yourself in you post. You said no bank works on net income and then say that you take into account deductions... Which is it?
Also, OP clearly says that no bank asked her for the total amount of student debt. This is not the same as not asking how much the monthly repayment is.

Surely it’s pretty easy to understand that the majority of people do not earn so little that they pay £7 back on their student loan?
Like that can’t really come as a shock to you, surely?

I didn't have a particularly big student loan debt but always felt it right to pay it off. I paid some in instalments and then the rest as a lump sum. I don't get this attitude of running up debts and not paying them back, or attempting to. It's not the brag you think it is to avoid repayment.

Martin Lewis always says not to overpay as a general rule. Pay other debts, invest spare cash or save before paying off student loans. https://www.moneysavingexpert.com/students/student-loans-repay/

I bow to your superiority.

Sre you always so prickly when other people express a different but valid view? 🤢

I think though the point is that the vast majority are in a similar boat. There are, of course, exceptions but not everyone is on a huge salary.

I’ve just googled and in 2023, the median salary for UK graduates was £40,000, according to Prospects Luminate. This is higher than the median salary for non-graduates (£29,500). I know that they might progress but for women especially, I doubt this is always true.

So your statement “It's not the brag you think it is avoid repayment” wasn’t loaded with judgement?

No, it was factual. You're contributing to a massive pile of unpaid debt. That's not a brag.