Page 18 | Student loans- feel sick

Inspirationandhelpneeded · 30/07/2025 12:06

Lazy56789 · 29/07/2025 07:15

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?

Another way of looking at it, is that you borrowed a large amount for a university degree and then a masters and then repaid nothing for a long time. You are now repaying something each month. However, you might not repay all of it due to lower income.

Anyone know what happens to loans for people who graduate and then go off abroad? Do they also repay or not?

Natsku · 30/07/2025 12:25

Inspirationandhelpneeded · 30/07/2025 12:06

Another way of looking at it, is that you borrowed a large amount for a university degree and then a masters and then repaid nothing for a long time. You are now repaying something each month. However, you might not repay all of it due to lower income.

Anyone know what happens to loans for people who graduate and then go off abroad? Do they also repay or not?

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I'm abroad. We're supposed to repay and have to update the slc every year with our employment and income situation. If you don't, they hassle you non stop with calls, texts, and emails, and add on extra charges in addition to interest.

easylikeasundaymorn · 30/07/2025 12:36

VanessaFence · 30/07/2025 11:47

I try to look at it as a tax on higher education& just dont think about it it as I would get annoyed! What doesn’t sit right is that higher earners will pay much less interest than those of us on more average salaries as they will pay it off faster.

And this is why it isn't really a tax on higher education. Low earners will pay almost nothing but those in the middle could end up paying multiple times what a higher earner pays over their lifetime due to the compounding interest.

I had a chat with my partner last night comparing our understanding of student loans aged 18. We were both under the impression that this was a super low interest, fixed-rate loan. I remember being told that paying it off in a lump sum was stupid because the interest rates were so low you'd be better just putting the money in a savings account. I was genuinely shocked when I looked at the statements and figured out what the actual terms were.

When did you take it out though?
Because for a long time it WAS a super low interest fixed rate loan. As I said my interest was 0% for a few months c. 2009

I completely appreciate why more recent students feel their 7% interest rate is unfair but I don't understand why so many people are somehow surprised when literally every other news headline over the past 2 years has been linked to high interest rates - it's not just student loans affected, its mortgages, food prices, people striking for pay increases.

I genuinely don't get why people understand how a high BOE rate affects everything else but somehow seem to expect student loans to be exempt.

easylikeasundaymorn · 30/07/2025 12:42

Juniperberry55 · 30/07/2025 09:13

"You say yours will get wiped off by around 52/53 which suggests you would only have graduated c. 2022 even if you had stuck the course."
I'm on plan 2 - I started the course in 2012, debt is written of 30 years after the first April after you left, left aug 2013 (so first April April 2014) my balance would be wiped in 2044. I'll be just about to turn 53. So no I wouldn't have graduated in 2022 unless I did a ten year course.
I'm not saying people shouldn't pay any interest but does it not seem crazy to you that people are charged high interest, whilst they're still studying. By the time they have the ability to start paying it back their loan has gone up by thousands of £s
I have said several times I'd be happy to pay back the loan + interest. But the point it they way they apply the interest is unfair. It starts at 4.3% (RPI at the moment) then when you start earning enough to start paying it back then interest rate goes up, so as you earn more and start paying back more, the interest rate actually increases by another 3%.
You say it's been shit for mortgage holders but I can guarantee the average fixed mortgage rate was not 8% in August 2024 when they charged me 8% that month. They say they cap the percentage if it goes above market rates, but I could get just below 4% interest on a new mortgage and fix it for years. Student loans are constantly changing rates. And as for the market rate cap, I don't know if they're comparing against pay day loans to know when to cut off the interest rate as I certainly wouldn't be getting an 8% loan

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No need to be sarky, you said "I think mine will be written off around 52/53" it's hardly unreasonable that I read that as 2052/3 rather than AGE 52/53.

Just accept you are not a typical example because it wasnt designed around people dropping out. I appreciate it must be frustrating to pay off something you didn't benefit from but the majority of people who took out their student loan the same time as you will not end up even paying back what they actually took out, let alone 30 years of 8% interest on top

Juniperberry55 · 30/07/2025 12:43

easylikeasundaymorn · 30/07/2025 12:36

When did you take it out though?
Because for a long time it WAS a super low interest fixed rate loan. As I said my interest was 0% for a few months c. 2009

I completely appreciate why more recent students feel their 7% interest rate is unfair but I don't understand why so many people are somehow surprised when literally every other news headline over the past 2 years has been linked to high interest rates - it's not just student loans affected, its mortgages, food prices, people striking for pay increases.

I genuinely don't get why people understand how a high BOE rate affects everything else but somehow seem to expect student loans to be exempt.

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For most student loans it's linked to RPI + a percentage. The bank of England rate is often far lower than RPI. If it was bank of England rate +2% even, it would be more manageable for people to pay off their loans, linking it with RPI means things such as mortgage rates are hugely lower than the percentage applied to student loans and yet they're paid back over a similar time period.
Could you imagine signing up for a mortgage and the rates being linked to RPI+3%. Interest rate changing month by month
There should be another way of applying interest to the loans which is more fair, there's only the student loan company, you can't shop around, you can't fix a rate for a set period of time.

ConstantlyTired312 · 30/07/2025 13:04

VanessaFence · 30/07/2025 11:47

I try to look at it as a tax on higher education& just dont think about it it as I would get annoyed! What doesn’t sit right is that higher earners will pay much less interest than those of us on more average salaries as they will pay it off faster.

And this is why it isn't really a tax on higher education. Low earners will pay almost nothing but those in the middle could end up paying multiple times what a higher earner pays over their lifetime due to the compounding interest.

I had a chat with my partner last night comparing our understanding of student loans aged 18. We were both under the impression that this was a super low interest, fixed-rate loan. I remember being told that paying it off in a lump sum was stupid because the interest rates were so low you'd be better just putting the money in a savings account. I was genuinely shocked when I looked at the statements and figured out what the actual terms were.

That's exactly as it was sold to us though! And the interest rates were so low previously, but now it's just ridiculous!

I am a teacher and got my undergraduate degree 20 yrs ago, then trained in 2012 with the extortiante fees. I've only been making enough to repay more than interest in the last 5 years, but SLC are only paying off the most recent loan. My original one is now about £3000 more than what I took out as they have allowed it to just accrue interest!

mumda · 30/07/2025 13:11

Gyproc · 29/07/2025 22:15

According to student.loan.calculator on the current plan if you take the full tuition and maintenance loans, and your starting salary is 32k (eg a teacher) you will still be paying 40 years post graduation. And you will have made total payments of £135000, so more than twice the amount of the loans. This is like a mortgage. But should it be?

Outrageous!

VanessaFence · 30/07/2025 13:54

When did you take it out though?
Because for a long time it WAS a super low interest fixed rate loan. As I said my interest was 0% for a few months c. 2009

I took it out years ago when interest rates were really low. At the time I was under the impression that it was a fixed rate very low interest loan. Obviously students today would (I hope) realise that's not true as they've never experienced 0% interest rates.

No regrets as I went to an Oxbridge uni and my degree allowed me to get a high paying job (and I was pre top up fees). However, some younger people will end up paying £100k+ over their working life for a crap course with hardly any teaching time. I'd be fuming if that were me.

Skybluepinky · 30/07/2025 15:00

It’s just a tax, don’t over think it.

toughtimestoday · 30/07/2025 16:00

Mydadsbirthday · 30/07/2025 10:10

Wow, and what benefit to society will your second degree bring, or is it just an additional burden for taxpayers?

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Given I intend to work for a further 10 years on completion it depends how you choose to view it. Your view is pretty ageist and discriminatory to be honest. The government offer student loans up to age 60 knowing that the majority of people won't work beyond state retirement age. Regardless, I have been a 40% taxpayer for the last 25 years so I have no qualms at all about taking student loans and not repaying them. Perhaps its my time to take something from the state (and then work in the NHS...) after decades of putting in.

McDreich · 30/07/2025 16:06

Skybluepinky · 30/07/2025 15:00

It’s just a tax, don’t over think it.

But it is the difference of an extra hundred or two hundred quid in your account every month. I wouldn't take out a car loan or whatever for £200 a month and think nothing of it. My husband and I paid off our relatively small student loans recently and notice we have more in our account month to month. It's really dismissive telling people not to overtime it if they are careful with money in other ways and see those amounts leaving their account every month.

boys3 · 30/07/2025 16:24

there’s only the student loans company

@Juniperberry55 all the SLC does is administer the loans following whatever policy set by governments - plural as education is a devolved matter. It does not source the funding. It’s not a private business and not a private lender. It doesn’t set policy or loan terms. It can’t change the terms set by the governments. And it certainly can’t sell off any of the loan book.

but anyone is free to shop around and use a commercial lender. Loads of them out there. Good luck finding one with an income contingent repayment element and allowing an outstanding balance to be written off after a set time period.

Juniperberry55 · 30/07/2025 16:33

boys3 · 30/07/2025 16:24

there’s only the student loans company

@Juniperberry55 all the SLC does is administer the loans following whatever policy set by governments - plural as education is a devolved matter. It does not source the funding. It’s not a private business and not a private lender. It doesn’t set policy or loan terms. It can’t change the terms set by the governments. And it certainly can’t sell off any of the loan book.

but anyone is free to shop around and use a commercial lender. Loads of them out there. Good luck finding one with an income contingent repayment element and allowing an outstanding balance to be written off after a set time period.

Yes I understand government set the rules and student loan company executes it. What I'm saying is the fact there is one route for student loans, it is the only option you have. Students aren't going to be able to get a standard personal loan for that amount of money when they aren't going to afford to instantly start paying it back while studying. But why couldn't it be a mortgage style loan where you can choose between different providers with an option to fix rates etc obviously the provider would need to delay the payment until the end of the course.
If you could only mortgage your house with 1 company of the governments choosing you would have no competition they would set the rate and you'd be told to suck it up.

Waitfortheguinness · 30/07/2025 17:47

Lazy56789 · 29/07/2025 07:20

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!

Seems like you’re not earning enough if you’re only repaying £55/month. If you left education 15 years ago it would’ve been assumed you’d be on a much higher salary….especially after doing a masters?

Ellejay67 · 30/07/2025 17:50

It's disgusting. Free in other countries. My poor son will have the debt but no degree. He couldn't complete his course through no fault of his own.

Stad86 · 30/07/2025 17:54

Munchyseeds2 · 29/07/2025 07:17

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

Sadly not true, but a common myth

TicklishBeaker · 30/07/2025 17:57

Lazy56789 · 29/07/2025 07:15

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?

Luckily for me, I am thick. I never had the chance of going to university!!

MidnightMeltdown · 30/07/2025 17:58

Stad86 · 30/07/2025 17:54

Sadly not true, but a common myth

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It’s not a myth. It’s true for anyone on plan 2

C36M · 30/07/2025 18:00

Spirallingdownwards · 29/07/2025 09:32

No that isn't right and the tax man will catch up with them unless they don't earners enough to repay it. They are supposed to inform their employer which student loan plan they are on so the deductions are made properly.

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It is right. They probably do t earn enough to pay anything back

C36M · 30/07/2025 18:00

Lazy56789 · 29/07/2025 09:28

I know a couple of people who dropped out of uni before completing and have never had to pay a penny back/never been contacted about paying it back? Is this right?

Yeah they probably don’t earn enough to repay their loan

dynamiccactus · 30/07/2025 18:02

HollyGolightly4 · 29/07/2025 07:26

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 🙃

I thought that they affected the affordability calculation.

I know it's all a wheeze to get the loans off the government's budget, but a straight-forward extra income tax would be much fairer and simpler.

timestheyareachanging25 · 30/07/2025 18:03

How much do you actually earn if you are only paying back £55 per month ….have to wonder if it’s a low salary was the masters even worth it or was it more of a vanity project ….

Mittleme · 30/07/2025 18:05

They really don't want anyone to survive in this country to be honest .
i think the best way to pay the money back quickly is to get a high paid job .

Dodeedoo · 30/07/2025 18:05

Fetaface · 29/07/2025 19:52

I went in 2006 and my tuition fees were 3k per year. I earned about £6-8k back then. It varied due to contracted time (part-time) and additional extra hours when short of staff.

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do you want a medal?

C36M · 30/07/2025 18:06

timestheyareachanging25 · 30/07/2025 18:03

How much do you actually earn if you are only paying back £55 per month ….have to wonder if it’s a low salary was the masters even worth it or was it more of a vanity project ….

🤦🏻‍♀️ maybe she has young children and has had to lower her hours for this and will go back to higher paid work after. You don’t even know their situation but you judge them. What a saddo