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?

It'll get written off if you don't fully repay it, think of it as a small contribution towards your massive education.

I’ve only just paid mine off and I’m nearly 50. I was on a crap salary for years so more and more interest was being added as I couldn’t make a dent in it. I sympathise with you.

As a foreigner to the UK I literally cannot understand why people are so passive about this.

"Oh it's just a graduate tax! Just don't even think about it! It'll never cause you any problems!"

(Aside from having to pay HUNDREDS OF POUNDS A MONTH FOR THE DURATION OF YOUR WORKING LIFE, apparently...)

I just kept deferring mine, it’s been written off now.

Just curious, do you actually use your degree for your job/career?

Paying £55 a month when the interest alone is £166 is why I put YABU.

This debt will just continue to increase every year. If I were you, I'd be aiming to pay off £5K of the loan amount PLUS the interest per year. At the very least, you need to be paying off a good £300 a month to stop it increasing year on year.

I don't know why people are so blaise about Student Loans, they are still debt. I paid mine off within two years of graduating and I was earning a pittance (it was a small loan, but even if it had been larger, there's no way I'd let it go on for years).

But conversely, a job paying lower wages means potentially longer before payments begin due to the repayment threshold, and even then it's repayments of 9% of the salary over that threshold.

Of course, interest continues to build all the time...it really is going to be a different scenario for everyone, based on their age, salaries, and years left to work. At 47, I won't ever pay much of mine off once I qualify. A younger person might.

But as I said in a message a few pages back, the whole process is a complicated fuck-up when you consider all the variables. I can't see why a basic very low nterest repayment loan isn't offered with a view to paying it back ASAP. Right now it seems that the interest is what brings in the money, yet so many people pay so little back, or indeed nothing at all. The playing field is far from level.

This! Kids and young adults are told that this is the way it should be and has to be when there are other options.

I was always money savvy so never got a loan and didn't have the luxury of having someone pay it for me but came out with no debts. But not all are informed on how to manage finances when at uni or find a way to do it without huge costs as I did.

Kids should be fully informed about other ways to fund uni and ways to get their degree without having to take out huge debts. Things such as how Wales have a bursary and tuition fee funding for those who work in Wales for 2 years after qualifying in the NHS. If all information is shared then kids can make fully informed decisions as abstract figures and % are a bit meaningless when they are given to them at 17/18 without explaining the impact 20 years down the line.

The second degree rules do not apply for NHS and Allied Health Profession degrees - things like Occupational Health, Podiatry, Radiology etc.

If you’ve done a degree and a masters, how can you earn so little?

Aside from having to pay HUNDREDS OF POUNDS A MONTH FOR THE DURATION OF YOUR WORKING LIFE, apparently...)

No, not necessarily. Also if you don’t work you don’t pay. So no big deal.

It depends on income, one of my DD’s hasn’t paid off a penny, the other has paid off 25% already thanks to joining bonus payments and various other one offs as well as £60k+ salary

I suppose then it’s being on such a low salary you don’t have to pay anything, or worse, choosing not to work at all (obviously some people can’t work but that’s a minority). No wonder the benefit system is on its knees.

It's really a graduate tax dressed up by another name.
Payment is based on your income (not how much you 'owe')
This way no one ever pays it off, and it gets written off after 30? years.
So, a graduate tax by another name.

No problems if you never work or stay a low earner.

No problems if you were rich to start off with and just pay it off.

Massive, life long problems if you slowly work your way up through useful work, fast enough to pay huge sums each month but not enough to catch up with the interest.

Stay in your place!

Checked mine this morning, inspired by your thread! I've got 18k outstanding in total, plan 1 and plan 2 loans.

I'm currently working part time so I am under the repayment threshold and pay a grand sum of zero each month.

When I'm 63, the bulk of the will be written off (plan2), and when I'm 65, the remaining plan 1 loan will get written off.

Currently in my 40s, have lived abroad, am a homeowner, etc etc. The loan impact on my life has been hardly noticeable.

No overpaying here.

What is the point of this, at scale?

The point? Of what? Of my response to the OP?

The point is to not see it as a loan, since it isn't treated like one.

Exactly this. And those who say it isn’t included in your mortgage loan are wrong. You have to look at what you can afford, if you paying out a few hundred every month on your student loan, then that is going to have an impact.

I think she meant the point of a system like this

No. In 2019, 45% of the value of student loans being taken out in England was actually covered by the taxpayer.

Yes, student loans do affect mortgage affordability.

https://www.gov.uk/government/news/government-reveals-student-loan-contribution

Yes, the upper echelons seem to want everyone drowning in debt, and the country itself is drowning in debt as well.

People who claim student loans don't matter are mistaken. They impact mortgages and take away valuable money from the monthly budget that could be used for more important expenses.

i think a huge amount of 16/17/18 year olds ARE thinking hard about whether to go to Uni or not. My DS is 17, my DD is 21. How many kids do you currently know who are year 12 age? A ton of my kids friends have chosen NOT to go to uni/get a student loan. They are doing apprenticeships instead or finding other routes to the job they want. Mine both have a student loan (the lower amount available for maintenance and the full one for fees) and my DD looked into it extensively and still thinks it's a great way to be given a huge loan at age 18 (when you would never hope to qualify for a loan like that normally) that you can pay back over 30 years. She's not worried about it at all. She's doing Chemistry and needs her degree for future jobs. My son wants to study Economy & Finance, again he will need a degree and wants to go and experience Uni life & will apply for the maintenance and fees loans.

Mine is over 60k - currently pay nothing as work part time so it's just going up and up.

Couldn't give a shit tbh - will eventually get written off

It's not that people are passive about this. In fact when it was due to be introduced lots of people went on protest marches and we voted in a party that said it would not raise the loans.

They lied. The party got into power and within 24 hours tripled the student loans. There was literally nothing the people could do about it. On top of that degree apprenticeships were not really around and lots of jobs (which had no reason to apart from a means to filter the applications) made one of the entry requirements a degree (1st or 2.1). If you wanted a job with the means to earn 50k+ you had to get a degree and the student loan that accompanied it.

That is why most people still say to those who can not afford a degree, take it and don't worry too much about the repayments because it is unlikely that you will ever be able to pay them off.

The link says 'reveal that around 45% of the value of student loans being taken out in England will actually be covered by the taxpayer.' but what I can't work out if that means that 45% of the balance of the original loan. Because my original loan was £11k. It is now over £13k due to interest. If my loan only reduces to £9k despite my contributions by the time it comes to be written off at the end of 30 years. You could say the tax payer has paid for 80% of my student loans. But in the meantime I could have paid over £30k in interest in those 30 years but can't reduce the balance because the interest is so high. In that case I wouldn't consider it tax payers paying for my tuition, because I could have paid back 3x what I borrowed but the interest rates have meant I couldn't reduce the balance before it was written off.