Student loans- feel sick

[Lazy56789]

I did a degree around 15 years ago, and a Masters around 10 years ago.
A repayment is taken out of my salary each month based on my earnings, but when I received a letter from student finance today I saw my balance was 41k! And over 2k in interest was added in the last tax year.

It's terrifying, I'm not in a position to pay off huge amounts, how does anyone do it? The figures are eye-watering, I feel like i must've done something wrong for it to be so high?

No it’s what they want, everyone broke and struggling to repay it!

Many people will never pay off their loans
It gets wiped after 30 years I think

Isn't this part of the design? Don't high earners pay it off, but everyone else keeps making repayments until it gets written off?

Not everyone will actually repay their student finance in full. It will
Look at MSE to understand it better and essentially you treat student finance as a tax to pay until it gets written off.

It gets wiped after a certain number of years if you don’t pay it off it doesn’t really matter. How much are you paying off a month? Around £220 a month gets taken from my pay for student loans and it’s steadily going down.

Maybe you will never pay it off - most people don't. So just pay what they ask each month, and forget about the rest. If you stop earning, you won't have to pay at all. It is not the kind of debt that will ever cause you problems.

Literally doesn't matter. You only pay a percentage out of your wage, and then after a number of years it gets wiped.

It's not really a loan, more like an education tax.

Which plan are you on? You need to know if you're on plan 1 or plan 2. I think you're likey to be on one where you're balance gets written off after 25/30 years so there's little point now imo of attempting to pay it off
https://www.gov.uk/repaying-your-student-loan/when-your-student-loan-gets-written-off-or-cancelled

I only repay about £55 a month but I don't earn a great deal, I'll try to just not think about it too much I guess!

I'm on plan 1!

I did my degree about 10 years before you and had about £20k (which now seems like a bargain compared to what kids are dealing with but at the time was huge as it was sort of the start of student fees etc). The amount of interest going on at the beginning was absolutely shocking, I just watched this huge amount going up, and it freaked me out. I was earning ok and CoL was not as bad so I paid off as much as I could (above the amount taken from my ages). But having no financial sense whatsoever it was at the expense of paying more into my pension. So although mine was paid in about 10 years, I'm not sure it was a sensible thing to do. I don't have an answer but I totally relate to that horrible sinking feeling.

That’s not true because it’s a factor in mortgage affordability.

When Plan 1 loans get written off
When your Plan 1 loan gets written off depends on when you were paid the first loan for your course.
If you were paid the first loan on or after 1 September 2006
The loans for your course will be written off 25 years after the April you were first due to repay.

I’m plan 1 too and I’m not sure they get wiped- maybe at age 60 or something !
I agree it’s very depressing

At times my payment didn’t cover interest so I know owe more than I borrowed

i’m 40 now, have been paying for nearly 20 years and probably another 20 to go

all a bit embarrassing really

If you’re only paying £55 a month the interest each month will be higher than you’re paying off so your student loans amount will be going up instead of down.

One of my daughters is a high earner and is paying it off. Another will probably never pay hers off, as her salary is not as high. It’s another burden on young people.

I don't think student loans are a factor in mortgages (or they didn't used to be).

The government sold all our debts to a private company who promptly increased the interest rates 🙃

You’re in the older version of plan 1 so yours gets written off at age 65. OP will be in the newer plan 1 of her degree was 15 years ago so will get written off at 25 years.

For students who went to uni from 2023 they are on plan 5 which is for 40 years so will be paying back when their own dc start uni. The threshold for repaying is £25k.

You must stop thinking about it like a normal loan. If you can't afford a normal loan and stop paying then bad stuff starts to happenx like marks on your credit file, repossession, bailiffs etc.

With a student loan, if you can't afford it then what happens... They stop taking the payments and... Nothing else happens! They wait until you can afford it again.

I know it's a lot of money, but try to stop thinking about it as a loan and more of a tax taken in line with your earnings.

if you are paying £55 a month back it’s prob not surprising it’s not gone down much?

Don’t think of it as a debt but as a tax. In fact if you can bring yourself below the threshold to pay it off by making additional pension contributions then do it. Paying more into a pension is far more beneficial than paying this off. I’m about to do a second degree at 54. I’ll end up with a starting debt of around £45k. It will never get repaid back before I die!

You may never pay it off.
Last statement I had was around 23k since I left uni 11 years ago and I have looked again since. I have also had refunds from "overpaying" it when changing jobs. Mine will never be repaid, however just means I'll have that extra deduction for it each month until it's wiped.

I really wonder if all the posters saying things like ‘it doesn’t matter’ would feel the same if their income tax was 5% higher indefinitely.

It’s a terrible system that ensures young people are poorer than previous generations, and bakes in generational inequality - children of rich parents will leave with much smaller loans.

It’s crap OP, I’m sorry.

Oh yes. That's what they want. 🤔

Can you just remind me who they is, and why they would want "everyone broke and struggling to repay it"?