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?

That’s fraud surely…

Unless you were going to earn enough to pay it off in full before it was written off, it definitely wasn’t the sensible thing to do.

An actual graduate tax might be a bit easier to cope with, since people's families couldn't buy them out of it and nor would those old enough to get in before the 90s be exempt.

I don’t see why. They can only have done it for the maintenance loan, as the tuition fee loan is paid straight to the university so they can’t have invested that. But there’s no requirement that the maintenance loan goes on anything specific.

Tbf I know someone who used their maint loan for a boob job…

It just gets wiped off after 25 years so don’t worry it doesn’t go against mortgages or anything

It's not naive to think that people benefit from your debt. Where there is debt there is credit, where there is credit there's power. Not that critical theory is going to help your personal situation much, except that to say that people in debt take less risks, and taking financial risks despite being in debt is a radical move that could provide purpose.

Yes it does. Go. Against. Mortgages!! 🙈

Your affordability to pay a mortgage is affected by your monthly outgoings. Which include student loan repayments (if you have a SL).

True sadly

Absolutely. Where there is debt - there is another side making lots of money.

Only gets wiped if you don’t earn enough to pay it off. Also it absolutely counts towards your mortgage affordability calculations.

Its shocking. My payments are the same as my interest. Mine is scrapped after 30 years so another 12 years. No point overpaying.
it doesn’t go against mortgages in Scotland.

Where is that 45% figure from and is it the amount of student loans where there is still a balance by the time it is written off or is that the percentage of the original loan that gets written off.
So if I took a loan for 11000 and paid £36000 over the years but still had a balance of £9000 at the end of 30 years. Would I be part of the 45%? Because if I would be part of the 45% then I would argue the fact I paid back 3x what I borrowed, I have not had my loans repaid by the tax payer at all.

It's a stupid system. We should go back to maintenance grants and fees being paid - it would be a darn sight cheaper, since most loans never get repaid.

How does it not go against mortgages in Scotland? If you’re paying, say, £200 a month back in student loan, do they ignore that amount and act like you have £200 more a month than you actually do when calculating affordability?

Why?
You can do what you like with the money, including giving it away.

I live in Scotland and it absolutely goes against mortgages but it’s the payment not the total debt. If you aren’t paying over the threshold it won’t go against a mortgage but if you are then it will. I pay over £4k a year to student loan, that’s £350 a month less to pay a mortgage than someone who was earning the same with no student loan, they cant just ignore that.

Yep thanks labour for bringing in loans and the conservatives for selling it off. It does impact affordability. And mainly impacts the poorer students who have to take max loans with no parental financial assistance.

I think they make the money through the interest. They full well know people won’t pay it back…

I agree, you've been shafted. A degree should not be necessary for most healthcare roles.

Degrees should be academic, they should never have merged vocational qualifications into degrees. University is a complete waste of time to for so many people, but successive governments since Tony Blair have been pushing for 'everyone' to go through higher education. I may be a cynic, but I think it's mostly about reducing the working age population/massaging employment figures and conditioning people to a lifetime of debt/credit. Higher education is an industry in itself in the UK, it's keeping a lot of people in jobs (but yet another sector where they have unaffordably generous pensions to fund as well), and students are kept out of the working population for 3 years.

If everyone has a degree then degrees are worthless.

But why would someone pay over the threshold if it gets wiped anyway? Mine has never been taken into account for my mortgage. It doesn’t show on your credit report.

What’s a better system though?

I personally think this is the best possible system. Everybody’s taxes have helped fund their education, thanks to which they earn a higher salary, so why shouldn’t it be paid back?

Rich parents are rich because they have financial sense. It doesn’t make any sense to not take out a student loan. This is very cheap debt - unless interest rates on it have gone up significantly. So at least in my day it was very cheap debt, and I did not know a single person, no matter how wealthy, who’d pay their fees out of their own pocket.

I’m from a country where higher education is completely free. Maybe it works over there as there’s more equality and social mobility.

However, considering in the UK most people that go to university aren’t from poor households, free higher education would basically be subsidising children from wealthy families getting additional qualifications to have even better chances in life.

I also don’t support an American style commercial loans system.

So I think our system is as fair as it gets.

I earn a high salary, that you helped make happen with your taxes, why shouldn’t I pay it back? Or should the tax payer subsidise my lifestyle?

When I was a student, people from other countries couldn’t believe how generous the UK system was to the students, eg no payments if they don’t earn much, loan gets wiped at some point etc.

Only thing I’d change is increase the repayment threshold to maybe 30k. For context I don’t live in the South East anymore, over there it should probably be nearer to 50k 😇

I’m not overpaying it, that is what is deducted from my pay. The threshold for Plan 4 repayment is £32745. 9% of everything earned over that goes to student loan. For me that’s £350 per month out of my wages and my mortgage application specifically asked how much I pay per month towards student loan. If you earn less than £32745 then you won’t be paying anything so won’t put anything in that box of the mortgage application.

You were jealous of this who had to pay £2k a year more than you in tuition fees?

The idea that it always leads to much higher paid jobs is baloney - for every doctor or lawyer there’s 3 teaches/nurses/social workers/ straight office admin jobs. It’s not compulsory I get that but there’s an awful lot of quiet. Average jobs in terms of earnings you can’t get into without a degree these days .