To not feel very sorry for some student loan whiners

[Viviennemary]

There's been a lot of complaining about student loans and its wrong they seemed to have move the goalposts re paying back. StillI I read about this woman complaining her student loan is £120k and is going up every year. She was a student for 10 years fgs. Just as well the tax payer wasn't funding her. I hope these folk arent just going to be let away with not paying.

I think the previous system of 3k + maintenance fees was fair. About 20k debt which was actually affordable to pay off. That seems what it’s worth.

There is no free ride. Quite the opposite. That’s rather the point of the thread.

I was quite shocked about the interest side of things with the koans. I’ve not thought about them for years as I took mine in the 1990’s, the koans had very little interest and were garnered from salary I think once you started earning a certain amount, which took me a while as I did a PhD afterwards so was many years before I started paying it back. I can’t believe there are people paying plenty back but even covering the interest, so the amount owing increases still … after grants were stopped, it was meant to be a cheap way to get an education loan, it appears this has fallen by the wayside

Where else can you borrow 50 grand at favourable interests rates, that you don't have to pay anything back unless you earn over 28 grand, doesn't affect your credit rating and gets written off after 30 years?

Generally, I'm in favour of student loans. Too many students go to university, and it's too expensive for the taxpayer to pick up the bill. However, those on plan 2 loans have been paying interest at RPI (which peaked at 11.6% in 2022) +3%. For comparison, plan 1 loans is the lower of RPI/BOE interest rate +1%.

I don't think anyone expected RPI to be so high, so I don't hate students on loan 2 plans being given the same interest deal as plan 1 students, backdated a couple of years.

OP what was your degree in and did you take out a loan?

young people need to think very carefully now about going to Uni and the degree they choose. My DC have both chosen maths, so will (and are) be in good paying jobs. Son’s gf who he met at uni did a degree that doesn’t lend itself into any obvious careers and is struggling to find a job, and to be honest she will likely end up in a job that doesn’t require a job.

My DC are fortunate that my ex, their dad, paid for their fees and accomodation and DS worked full time in both summers then had a graduate job lined up soon after graduating. Martin Lewis advice would have been to take the loan, but my ex didn’t want to pay interest when he had the money in the bank (years working overseas) but it made sense and I think Martin Lewis is not as vocal on taking the loan even if parents can afford to pay. Both of my DC will likely end up in high paying jobs and so all of it would need repaying so makes no sense to take a loan with high interest rate.

I think most young people do not even consider things like interest rates and how much they may end up re-paying, and it’s the ones from the low income backgrounds that end up paying the most. The whole student loans system needs an overhaul. I know of a few people who really struggled as the government said their parents should contribute 6k ish a year for their uni, but they didn’t. Jobs in student towns are not as easy to get anymore and these students really struggled.

Many parents not even aware until a year or two before that they are expected to contribute for their child’s uni, and of course do not have the money saved. It’s all a bit of a mess.

I couldn't give a crap tbh there are larger issues to worry about, but this is one of those OP's that remind me of attention-grifting on the night shift to keep people on site.
Bland, pointless, shite.
My guess is bored tabloid vermin. (or a bot, same thing really, lol)

Educated people bring value to the whole of society.

It's horrendous the amount of debt that students are in these days.

University should be for pathways to careers which are genuinely impossible without a degree. Like medical and scientific careers

But employerrs need to stop wanting degrees when they needed.

The realities of these loans should be made apparent to students. My DS took a loan for the fees. I paid the accommodation and living costs. On leaving uni with a masters he has borrowed £36,000. He is lucky that he has a professional job and has been paying 9% interest ever since, totalling just under £300 per month. Quite a deal people will think. 5 years down the line he now owes £70,000....and is still paying monthly. His bill will rise if he gets a pay rise but seemingly so will his debt. As he will probably work his entire life, it won't just be written off and had we taken a bank loan he would be well on his way to paying it off.

It didn't 'guarantee' anything. I know an Oxford maths graduate who was made redundant in the 90s and whose career never really recovered. And he's not alone.
Fed up of the 'X generation never struggled' narrative.

@moose62 that’s shocking

There was an NHS Dr on th radio a few weeks ago who explained it perfectly.

The interest is so high that many (most?) loans continue to increase even if you are making payments every month. Most people feel they have no chance of ever paying it off. So whilst it's reassuring to have the safety net of the loan being written off, there's very little incentive to work harder in the meantime.

Junior doctors don't feel there's any point in taking on locum shifts when a good chunk of that extra money goes into the bottomless loan pit. In all sectors there's not much point being ambitious and going for those small early career promotions. It's utterly miserable trying to motivate yourself to be ambitious and to work hard because you will hopefully start to see the benefits at some point in your mid-late forties.

If you're ever going to have a career break of any length then there's no point working hard to get a good chunk of the loan paid off in advance, because it will grow so rapidly in the time you're out of work.

I do think there are a lot of people who go to university now whose life chances don’t benefit from going. Unless you have decent A levels and want to work well while you are there it is pointless going. Students also need to think about the usefulness of the degree they are doing and the University they are going to. Not all degrees are the same.
This country is going to have a terrible shortage of plumbers, electricians etc in the next few decades. Youngsters need to think about apprenticeships instead.

This! My sympathies...

I am plan 1 and will have paid mine off this year. It was £20k. I work in a professional role. I really benefited from years of very low interest rates.

My sister graduated 3 years after me, but with 30k. She is a teacher. Those 3 years meant that she didn’t have the low interest rates I did for as many years. She had also earned just slightly less than me (so whilst I currently earn 60, she gets 50). Her loan still stands at 30k because of the interest whilst line is almost gone.

my cousin graduated with £60k and just to to pay the interest, she’d need a starting salary of about £65k….. she’s a teacher. Therefore her loan is £90k.

Any situation where a persons starting graduate salary is less than they’d need to cover the interest is not going to work.

It’s clearly not a fair system and something needs to be done. Might be better to be an interest free loan with fixed payments to be met regardless of income. Like a normal loan.

But thats the unfairness of the system, its basically, as Reeves would say "Price Gouging"
Students told TH's would increase each year, instead the Tories froze them for 10 years, now to be frozen yet again.

Plus, there is no competition (for the vast majority) its the SLC or you don't get to go to University, meanwhile, the very wealthy do not pay any interest at all, their parents pay.
Yet again, giving a huge tax advantage to the rich.

Talking of RICH, its a bit rich of Badenoch to have a go at the current Govt over this, when it was her party that trebled tuition fees and introduced plan 2 loans and then froze thresholds.
She was in Govt for 5 years and did nothing at all to ease the debt burden.

The problem is due to shitty interest rates I still owe more than I did 10 years ago and I’m paying 200 per month. Working in the NHS where I needed my degree to access my career.
The original interest in around 2022 was at 1% and then it shot up to around 9% for a couple of years. This literally added thousands to the balance that I now just can’t pay off because my £200 is only just touching the capital.
I have no problem paying back what I borrowed but it will be multiples of that. I’m also considering getting a loan to pay it off so I won’t be stuck with it for the next 20 years!

This isn’t exactly right- high earners will pay more overall because their repayments are higher and they will pay off the entire loan, while middle earners won’t. Middle earners will feel the burden for their entire working lives (40 years on plan 5- since 2023) but higher earners will actually pay more. They’ll still have more money though- so will the middle earners than those on minimum wage.

Don’t do that! you will pay more overall

I got a loan to do my MSc a few years ago. I continued to work a 0.70 timetable (school) while I did the qualification. I don’t think I’m a shirker or a whiner. I’ve had continuous employment since I was 21 (I’m mid-40s) - never travelled, never had a break.

I feel ripped off on a plan 1 loan so honestly I get how they feel and that must be so much worse. Totally lied to and a lot of it was around Liz truss budget the interest rate went crazy on it. Always told it’s good it’s low interest total, it won’t affect your ability for a mortgage…erm yes it did changed how much I could borrow. I think the way it was explained back then was poor and it’s still continuing

Do you have a degree and have you finished paying off your student loan, if so?

The logic of your argument would "Make sure you chose a degree that pays below the threshold.
That way, you avoid ever paying back the loan and the higher taxes that go with higher pay.

My DD is band 6 NHS but she is barely better off then when a band 5, due to higher loan repayments, tax, ni and pension... she as so many do, owes around 10k more than when she graduated 5 years ago.

Now to be even worse off, (Thanks Mr Streeting) as the pool cars they had to visit patients in rural areas, will be cut, the expectation is "Use your own car but we wont pay for the Business insurance or the repairs when you hit a pot hole oh and we've cut the mileage rates, despite 10% increases in fuel"

The reality is, therapists wont use their own cars and patients will have to wait even longer.