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

[prh47bridge]

LauraBridges

Your calculation is correct. And someone on £100k would end up paying the whole loan fairly quickly. Most graduates will never repay the full loan and many will never pay anything.

[AmberTheCat]

Irrelevant to the topic, Laura, but I'm intrigued. How do you know your daughters won't take maternity leave?

[motown3000]

Talkinpeace.

"People" who took loans out before 2012 are safe ,as the Department of Education Categorically ruled out changing terms on loans taken out before 2012.

The Independent 25 November 2013.

The Government sold the student loan book with £900 Million Debt for £160 Million.

" A Secret report for the Government said "In order to make the Student Loan Book Profitable for Private Companies , the cap on interest would need to be increased or removed.

[motown3000]

Thanks PH for Clarifying that point .

[LauraBridges]

I think I put a very high price on psychological issues - feeling you have no debts, letting them all graduate debt free as I graduated even though I accept the point that most women work for pin money most of their lives and live off the earnings of men, and many men do degrees in art and never earn more than £13k a year so will not have to pay anything back ever.

(They might take maternity leave (they are London lawyers) but I would be surprised if it would be more than 3 months so not likely to affect their long term liabilities to pay the student loans had they had them. I took no maternity leaves, just annual leaves. I don't expect they would do exactly the same but I doubt they would give up very lucrative careers to be at home but it is entirely up to them and my sons to make their own choices.

[NurseyWursey]

women work for pin money most of their lives

A bit patronising and sexist don't you think? Your idea of 'pin money' is someone else's decent salary.

[TalkinPeace]

yeah but Laura likes to wind people up with her views on maternity leave

[titchy]

Is it very naughty of me to hope all Laura's children become SAHPs?

[NurseyWursey]

[HootHootTootToot]

Love the predictably inflammatory posts from LauraBridges

[Barbeasty]

The original pre-fee loans were a killer.

You could defer payment if you earned under a certain amount (from memory somewhere over £20k), but once you hit that threshold you paid the whole thing back in 5 years. So a pay rise from £19.5k to £20k could actually mean a cut in take home pay because you paid a % of the loan owed rather than a % of your salary over the threshold.

But at least a missed payment couldn't be put on your credit record (which I discovered when my bank froze my card between paying my 2 loans off in full without telling me)

It makes me really sad that people are convinced they can't afford university because of the size of the fees loans. I think I'd rather they just openly applied a small additional tax rate to graduates.

[TalkinPeace]

but once you hit that threshold you paid the whole thing back in 5 years
which sort of loan was that ....
DHs PGCE loan was not like that at all
he had negative interest on it one year!

[prh47bridge]

Barbbeasty is talking about the pre-1998 mortgage-style loans.

[TalkinPeace]

yup, DH's PGCE was in the early 90's and he certainly did not have to pay it off in 5 years

[prh47bridge]

The rules for repayment of those loans are [http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,3867066&_dad=portal&_schema=PORTAL here]. These loans were introduced in 1990. You didn't start paying until you earned over a threshold (nearly £28k in 2011/12) but once you did pay you had either 5 or 7 years to pay the whole lot. The interest rate was indeed negative in 2009/10.

[prh47bridge]

Sorry - got the link wrong. Try this.

[Barbeasty]

I paid it off too soon then!

I just slipped in with starting the loan in 1998, because I deferred entry for 1 year in 1997 before the announcement that fees were being introduced. I had to get a letter from the university saying I'd applied for deferral early enough! So the last time it was possible to get those loans.

Sorry- I didn't mean to derail the thread!

[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),.

[TalkinPeace]

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

they could always take out the loans and buy an island

[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.

[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.

[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?

[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.

[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.

[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.