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

[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.)

[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).

[Bakingnovice]

Laura are you Xenia?

[secretscwirrels]

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

[AntoinetteCosway]

Ha-I always wonder that too!

[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.

[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

[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]

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

[fideline]

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

[NurseyWursey]

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

[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.

[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.

[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]

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.

[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?

[TalkinPeace]

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