Student Loans Debt!

[Ge0rgina]

Hi guys,

So a friend of mine's son is going to university in September of this year. She asked me my opinion on how much his student loan debt is going to affect him throughout his post-uni life and honestly I wasn't sure!

I used this: www.helpwithdebtconsolidation.co.uk/you-vs-the-nation/index.php

He's going to owe around £35,000 of debt and according to this tool, if he wants to pay it back in 10 years it'll cost him £656 a month! That's a crazy amount of money! Am I missing something here?

Thanks

[TalkinPeace]

complete myth unless they have properly notified the uk tax authorities and there is an appropriate reciprocal agreement

[mummyofteens]

Can someone please confirm or not whether it is true that if graduates move abroad to work, there is no arrangement whereby student loans can be collected or is this a complete myth?

[LauraBridges]

Not just credit card debt but what you pay into a pension and for life insurance. I can understand why that is relevant as you have less to spend but objectively the person with loads of credit card debts is probably a worse bet than someone spending the same on pension and life insurance who would have more choice about ceasing that spending.

My 20 something daughter and her husband completed her first purchase on Friday so all this has been very relevant. She has no student debt but if she did they would have a bit less cash available to pay a mortgage. If we do a sum £100k - £23k x 9% = £7k repayments a year (had she graduated when the fees were £9k PA) that would be quite a lot and also a lot of young lawyers also then have 2 years of post grad debt too.

Anyway I think the conclusion of the thread is that in most cases it will be worth taking on the loan rather than the mother paying in the rare cases where them other can afford to (but I will still probably pay for the youngest two simply because I can and it's a bit less than school fees anyway and they might well earn similarly to their sisters in their 20s) and I graduated debt free so I would like them to be in the same position. My father's view was he would pay for a very good education (and we only got the minimum grant by the way 30 years ago and the parent even in those days then was not obliged to make it up to the full grant although mine did. And then my parents' view was they paid for the best education they could for us and then you were on your own and that works quite well for many. I am happy to replicate it with my own children.

[OnGoldenPond]

Yes student loan repayments will be included as an outgoing on a mortgage application which is correct as they are a real cost which reduce your take home pay so should be taken into account in affordability calculations.

However as the repayments are not onerous in relation to income they should not make a big difference to mortgage applications. If you can't afford your mortgage repayment without excluding student loan repayments from the calculation then you can't afford the mortgage!

The big difference with student loan debt as opposed to other unsecured debt us that the outstanding loan balance is not included in your total borrowings to work out your gearing level. Credit card debt would be included and would reduce the amount that a mortgage lender would be prepared to advance.

[LauraBridges]

On a mortgage article I read yesterday it was talking about the new rules from April (very tough rules). The change includes if you are a wise person who invests in a pension and life insurance that reduces your "income". If you don't spend on that but on something else they don't ask about no the forms you are classed as having less money and can borrow less. Thus you get the ridiculous position a wise mortgage broker wrote that the sort of person who will be good with repaying debt who has pensions and insurance is less likely to be loaned as much money as someone who is profligate. This is the problem with tick box rules rather than intelligent application of common sense by a local bank manager/building society. The student loan repayment I am sure it said was part of the questions asked just as my daughter as asked about all sorts 2 years ago even cost of your gym membership, never mind childcare costs which were certainly not asked about when I had them to pay when you applied for a mortgage. It was 3x salary or 5x if you were young in a very high paid profession and that was it.

[LauraBridges]

I have never tried to hide anything. Not my choice.
I never boast. I just want women to know what misery they cause to themselves, their children and their lives and other women when they make unwise choices to sacrifice their lives on the altar of male careers to clean and dust at home.

Anyway this rather off topic. It does seem that most students will not pay the current student loans back unless the rules are changed later which I would not put it past a future Government.

[NurseyWursey]

I've just remembered who Xenia is, I first thought of that Channel 5 programme! I agree, sounds like Xenia.

[fideline]

If Laura isn't Xenia, I will break off from my floor-sweeping to eat my pin money.

[TalkinPeace]

no, she gave away where it was once by boasting about it being used for an advert
bless her little cotton socks

[AllMimsyWereTheBorogroves]

I thought it was a Scottish island, but I could easily be misremembering.

Cautionary tale about paying the fees upfront: someone I know did this for one of their children, who then proceeded to fail the first year exams not once but twice. If this charming but indolent young person fails the re-takes at the third attempt (this summer, after a year spent in employment without having attended any lectures), that's £9k down the swanee for that family.

[TalkinPeace]

baking / secret / antoinette
can there be two who have tropical islands ....

Laura my sweet, the name change was great but the posting style is SO distincive

[JumbledAndTumbled]

LauraBridges. It's good to hear that you have good intentions and that you just want to educate all the poor downtrodden women on Mumsnet. I think you would be more effective if you tried to be more empathetic and less condescending.

[AntoinetteCosway]

Ha-I always wonder that too!

[secretscwirrels]

Bakingnovice just what I was thinking......

[Bakingnovice]

Laura are you Xenia?

[LauraBridges]

(I just want women to think about their choices because although there are some who do have a good career, I suspect the majority put their husband's career first and once they have gone part time never ever recover from that to have a career where they might out earn their man and they don't always realise the likely long term results of that decision to stay home).

[AmberTheCat]

While I agree with your aims, Laura, for somehow who claims to want to see women succeed I think you've bought into a very patriarchal view of the world. You seem to see two polarised alternatives - prioritise well-paid work above all else, or accept a life of living off men and cleaning the toilet. That's not the world that I see. My own experience, for example, incorporates pursuing a career that I find exciting and challenging, two maternity leaves of 18 months in total, a six month sabbatical to go travelling, a mixture of full time work and slightly reduced hours to enable me to spend more time with my children, and a salary that enables me to live very comfortably. A description of my partner's experience, incidentally (or perhaps not incidentally), would read very similarly.

I completely agree that we should be encouraging our daughters to aim high. Where I disagree is that the way you've achieved that is the only way.

(Apologies, OP, for continuing to go off at a tangent.)

[JumbledAndTumbled]

LauraBridges. I think you are completely right in so many ways and I think what you have achieved is fantastic. I am 100% behind you with your message, however the way you deliver it is crap and you are most definitely rude at times.

I don't think you realise how you come across.


I think people must be careful not to be influenced by other people's decisions about whether to pay their children's Uni fees upfront. We have three kids in Uni at the moment and another going soon and each time the situation and the conditions of the student loans has been different. You really need to sit down and do your sums with each child. We have payed our kids fees upfront.

[BeckAndCall]

Wow. Like most mumsnetters will end up as teaching assistants on minimum wage. Patronising much, Laura?

There must be a whole swathe of threads and posts you don't read on here, Laura. Those posted by the lawyers, doctors, accountants and company directors, for example. But in any case, no need to treat other peoples choices with such contempt.

[LauraBridges]

I suppose I want to make women sit up and think and smell the coffee,... that taking those few years with part time work ties them to a very low wage for the next 40 years, that they lose hundreds of thousands of pounds by their decisions. However it is relevant to the thread because if the average pay for all mean and women is only about £25k and if many many many women do not earn even that as at 28 they stop earning and go back on £6 an hour if they are lucky, for life, then it would be foolish for their parents to pay and not to take out the student loans. I am certainly not rude. I encourage women to aim as high as they can and if someone needs to clean the toilets at home let it be the man. Women rule (or I wish they did). I am their supporter.

I am also going to have to think about whether to pay the younger children's student fees which will be higher than those of their siblings now it is £9k a year. That is still less than their school fees but if they will never have to pay it back which is the big question then is the loan better? I suspect in our case probably best I just pay the fees.

[HootHootTootToot]

LauraBridges I have never understood why you are so patronising and rude. You are a successful woman, so why do you feel the need to constantly belittle other people?

[AmberTheCat]

Hmm. I think, Laura, there is a large middle ground between 'taking no more than three months' maternity leave' and 'working for pin money and living off the earnings of men'. Most women I know, here in the 21st century, occupy that middle ground.

[phonebox]

I agree with Martin Lewis from Moneysaving - student loans should be re-named as graduate tax, that way people stop thinking of it as a "debt" and stop being put off from higher education merely because they misunderstand the nature of repayment.

[TalkinPeace]

is that what you've told your girls ....

they could always take out the loans and buy an island

[LauraBridges]

So we might be saying boy children who might earn a lot better (if you can afford it) to ensure they do not take out loans but female children who will probably like most mumsnetters end up as teaching assistants on the minimum wage or with jobs once babies come and never really get back on a career track, better to take the loan.

(Obviously I hope it were the reverse and most female mumsnetters aimed for the £100k a year jobs whilst their husbands swept the floors at home),.