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?

You might be right. I think you should double check. Mine was the first student loan and is cancelled at 65. The second arrangement (which I was envious of) is cancelled after 25 years. And it’s changed again, but I forget what it is now. You are a good chunk of the way through.

I paid mine off last year -- I'm not really sure how as I only started repaying it in 2013 and I'm not a high earner, still in the lowest tax bracket. But I think I must have benefited from being the last year before top-up fees came in (2005) so while my loan wouldn't have been wiped until I was 65, it was also much less than my friend who was born in the September after me had to borrow. He is still paying his off and will be for many years, but it will get wiped after 25 years.

Thank you for the reminder and clarification. Yes. I remember feeling irritable that the 2006 lot would be debt free a two decades before me.

It changed to 25 years at the same time the tuition fees went from £1,000 to £3,000 a year.

It is daylight robbery and, honestly, if I had my time again I wouldn't be rushing to uni. When my future children reach school leaving age I will be having a serious conversation with them about the realities of what they are signing up for and encouraging them to look at other options like apprenticeships or balancing study with work. I wish someone had had that conversation with me back then.

But only for people who were remiss enough to be born after a certain date and not have families who could pay it all upfront for them, of course!

It would have benefitted some and not others, as their loans were also triple yours (£3k vs £1k) per year). Someone who would have paid off the £1k loans in less than 25 years would have benefitted from being under your system because they’d end up paying back less.

Yes, but as the loan covered rent etc, it still felt like a better deal at the time, especially as, like many mothers, I’ve have maternity leave, worked part-time and taken the career progression hit that accompanies it. As it happens, the post-covid WFH culture allows my husband more flexibility, so my career has taken off in the last 5 years and I made my final repayment at the end of last year, but there was a time when I thought I’d be saddled with student debt until retirement.

@boxcutter12 I agree about that- at 18 it looks like a big laugh for many ( not all) and immensely appealing compared to starting the 9 to 5 treadmill

It’s swings and roundabouts. I paid £3k per year tuition fees. The interest on my loan is mental… it’s never getting paid off

One of my DC graduated 16 years ago and has never earned enough to pay anything back and probably never will. It will be wiped in another 14 years. Most students will never pay the debt off unless they are very high earners or come from wealthy families.

Why are you wkrrried? It’s the best type of loan that you will ever get only have to pay if your working, payments are in relation to your wage and gets wiped off. Its
not a loan it’s a tex!

I owe about £25K and I don’t lose any sleep over it. I graduated 2011. Once I get the high paid job I was promised then I’ll start paying it back, until then they get £12 a month from me.

That's debatable. I could get a sub 4% mortgage for the loan amount and get it paid off before the write off date. Currently I'm paying 7-8% interest on the student loan. The only reason I'm keeping the student loan is because if I lost my job I wouldn't have to pay it. But watching over £100 come out of my wages every month for £96 of that to be charged as interest isn't what I would call a great loan. There are few loans on the market where you could borrow £11k, pay back £36k over 30 years and never clear it. And then when your plan gets written off eventually, then people say the tax payer funded your uni when it's written off(even though £25k more than the loan was paid back)
I don't think people would be complaining if they set the threshold at a more reasonable level, if it was raised by the same % as minimum wage for example or if the interest rate didn't increase when your wages went up, which makes it harder to pay anything off the balance

Ive accepted that I will never pay mine off. Each month they take the payment and it barely covers the interest. It sticks in my throat but it's just what it is.

I know it was my responsibility to do proper research into the loans and what they really meant but an 18 year old being offered this easy money that they are told they need and can "just pay off" when they are working is never going to work out.

There should be much better education about the loans and the real implications.

I think the generation below will be advised not to go to uni by the parents still paying student loans out of their wages. I certainly wouldn't advise an 18 year old to choose a career that required uni unless there was a guarantee of a job £100k+ I would encourage them to go for jobs with an apprenticeship route. My generation were really sold a dream on uni and the cons of the student loans were really brushed off

OMG! This system isnt fair. When do they think youll finish paying all of that! Youre damned if you dare get a high paying job and youre damned if you stay in low paying jobs!
Good luck and hugs Xx

It absolutely is. Perhaps people should be raising a class action against the government/student loans company. It’s certainly just as wrong as the WASPI situation.

It is incorrect to say not to pay lump sums off. If you are likely to pay it all off the quicker you do si the better as it can save you thousands in interest. Each individual situation is different

Exactly. People with student loans are continually being given poor advice and they need to do the calculations to figure out what the best thing is for them.

I paid mine off in a lump sum when interest rates shot up post-Truss as I'm a high earner and had a good chunk of savings. Many of my friends had no idea that a) their student loan interest rate would increase or b) that paying it off might save them a huge amount of money in the long term.

It's crazy how 18 year olds are taking on these giant loans and have absolutely no idea what they're doing.

I borrowed less than 20k and graduated almost 20 years ago. I've only just paid it back, the interest was crazy

The interest on the loans is crazy, it means the majority of people will only ever pay the interest and not the loan itself. I think it would be fairer if the interest was nominal and just covered any admin fee associated with the loan. I graduated in 2002 and I still haven't paid my loan back due to a combination of being part time, paying into childcare vouchers and the repayment threshold going up. As soon as my kids no longer need childcare in a year or so I will start paying it back again, it's a pain but I am not losing any sleep over how much I owe.

If and when I have children, I’ll be encouraging apprenticeships or jobs that come with training such as training to become a train driver. Their starting salary is 40/50k… no student loan debt there…

Nursing used to be free as well.

There are 101 different "schemes".

My partner is older than me and he only has to start repaying once he earns a certain amount. It's quite a big chunk to repay each month and a balance to figure out whether the wage increase would be worth it so he has purposely kept just below that amount. It is being written off this year (he is 45) and he will start applying for higher paid jobs after that.

I had to start repaying mine as soon as I got a job. I think I keep paying it until I retire or pay it off. As I said, my payments barely cover the interest so it'll never be technically paid off but they'll have got most of it back in interest.

My eldest owes a shedload. (Younger ones did degrees earlier when it was cheaper)

She occasionally looks at what she owes then scrolls on by.

She's not bothered as she doesn't work. (not claiming either)

Same! Scandalous. I have only started paying it off since 2022 once my salary went over £55k, and I took out a very low amount as did Open Uni.