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?

Wish Id never got it or at least not the full amount. If Im honest, it all went on crap anyway as I was very lucky that my parents paid my rent and gave me a small allowance. I also had a part time job throughout uni so if I had been careful with my allowane and wages (as many people have to be) I could have coped without the loans.

It's about thinking carefully about what sort of degree you do.

If you have good earnings potential then it more than makes up for it.

It's all very well saying you'd encourage young people to undertake apprenticeships rather than university degrees, but there would need to be a lot more of them.

In the 2023 cycle (the latest figures published), 554,465 people were accepted to start an undergraduate course.

In the 2022/23 academic year, fewer than 46,800 started a degree apprenticeship.

And only around 60% of the starters achieve a degree apprenticeship - the 38% drop out rate for 2023-24 was considered good. The drop out rate for university courses is lower than 7%.

Why would you want to pay it off. Just pay what you have to and it will eventually be written off.

What plan are you on that doesn’t have an earnings threshold for repayment? I thought they all did?

That only works if you don't earn enough to pay it off before its written off. Higher earners who will pay it off before then are better to overpay and clear it as soon as possible, same as a regular loan.

I’ve got about 19-20k left on mine - finished my degree in 2008. It’s only now I’m earning an alright salary that I’m paying off a meaningful amount (£128 per month), and that’s because I’m now done with babies/mat leave/part time work but still think it’ll be hanging over me forever. I know people say dont worry about it and to an extent I don’t - it hasn’t stopped me getting a mortgage and I prioritise my pension - but it’s still a tax I could do without - £128 pounds extra a month would make a difference now I’m raising pre teen/teen!

I borrowed under 30k, last time I checked it was nearing 100k.

They really need to just wipe them. It’s actually criminal

But even if the apprenticeship isn't going to give them a degree level qualification, it may still end up the sensible choice, they will have a wage, albeit a smaller wage than if it was a normal job. They won't have £40k+ debt and £100s deducted off their wage for the next 40years. A degree doesn't always equal a super high salary, teachers, nurses etc and not all apprenticeships without degree level qualifications equal bad pay

Well the tax payer is doing very well from my daughter. She will have paid hers within 12 years, along with ridiculous amount of interest. These loans should have very low interest. She pays a huge amount of tax on top of this so thank goodness for people like her. She is already making a big difference to society, so your quote is tosh. My other daughter is a teacher and so is contributing to society as well.

Even those who end up with their debt written off may well have paid back 3x the cost of their original loan and are tax payers. So the whole thing about tax payers having to pay for the write offs is nonsense a lot of the time.

We encouraged our DC to take the loans as we had no idea what sort of earners they would be.

DD borrowed 28k (fees) plus 18k (maintenance) = 46K. By the time she had finished her course she owed 52k. Interest, sometimes up to 10%, was added from day one of her degree. The compounding was eye-watering.

When DD graduated she started her job on 33K. When I finished my degree I was on 12k, 30 years later I earn 48k. So my wage is x4 more over 30 years. I estimate that DD will be on 130k in 30 years time.

I put her details into an online student loan calculator. She now earns 42k. It calculated she would pay back 105k over the 30 years, but still owe 56k (which would be written off). These are bonkers figures with the compounding of interest tripling the initial amount borrowed even with thousands being repaid each year.

https://www.student-loan-calculator.co.uk/

We decided to pay the whole loan off and get DD to save for her own house deposit with the money saved in monthly repayments.

Yes, people really should be aware that under the newest plan most people will pay the loan off - and lots will be paying back far more than the total borrowed because of interest and the 40 year term.

It all disgusts me really.

Mine got sold off without my permission when I wasn't long off two closely spaced, statutory pay only mat leaves. I now earn over the repayment threshold but my earnings are distributed in such a way that no one source exceeds it. I take great joy in knowing the glorified hedge fund who purchased it without my consent get fuck all from me for their trouble.

How do you know if it has been sold off?

🙄 the evidence shows that approx 45% is paid for by the tax payer.

SLC told me.

I wish my parents had been more wise as to what I was taking on at 18. They didn’t have the money to top them up. I had friends at university whose parents took their loans and invested them, whilst giving them money for their rent and fees and living expenses. In my last year, I had £3300 to live on in London. I ended up moving home and commuting in.

I am on Plan 1, went in 1999 and graduated in 2003. I then took out additional borrowing in 2008. Currently earn £48k. I currently have about £5k to go.

It’s great that your children are making a difference. Teaching is undoubtedly one of the most valuable (and sadly, underpaid) professions.

My son (currently at uni) has resigned himself to never paying this off and just refers to it as a tax (I think 30 years has now become 40 years write-off).

It’s disgusting that the interest is compound. Some countries actually pay you to go to uni!

You don't. I literally never think about it. I accept the payment comes out of my salary like a tax and it will until one day it gets written off.

when I did my mortgage I was asked what my payment was and then my affordability went down due to it. It doesn’t effect it in a credit sense but will affect in you can borrow less due to expenditure

Yes plan 5 is really awful. 40 years to be written off, and the lowest repayment threshold. At least with plan 2 (the first lot paying £12k a year fees) they attempted to take a tiny bit of the sting out of the rise by making the repayment threshold a little bit higher than for plan 1. I mean, it’s still bad, but plan 5 has the lowest threshold, highest fees, and longest write off period. I think the interest might be a bit lower than plan 2 though.

Think of it as a graduate tax. It's not designed to be repaid in your working life unless you've done very well financially.

How are you getting a student loan for a second degree? I looked into this and one of the criteria for receiving it was that it had to be your first degree. This barred me from getting it even though my first degree was in another country so without any financial input from UK public funds at all.