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Higher education

Talk to other parents whose children are preparing for university on our Higher Education forum.

Original poster

Graduated 2015 - shock of loan cost!

165 replies

goingmadinthecountry · 17/05/2016 18:29

Dd1 graduated last year and her fees loan (didn't have maintenance loan) has increased already from the £27,000 for fees to £30, 160! Obviously lots of people are in the same boat but I'm truly shocked at the amount of interest already. Next year's MSc will be another £10500 before living expenses. Can't see her buying a flat anytime soon!

I think it's the amount of interest that's shocked me the most.

OP posts:
Original poster
goingmadinthecountry · 17/05/2016 18:45

And it's going up £100 a month!

OP posts:
vickibee · 17/05/2016 19:11

Bit is preferable to think of it in terms of a graduate tax once employed, most people never pay it back in full and it is written off after thirty years

Leopard12 · 17/05/2016 19:34

I'm trying not to think about mine, I'm leaving a 4 year course this year an have maintenance loans so it's around £50k!! Just look at the monthly repayments not the amount or interest, most people won't pay it all back

wizzywig · 17/05/2016 19:36

Do the masters part time and get a job

FibbyMcFibFace · 17/05/2016 19:42

...and if you do pay its back it's because you have a well paid job. So that's a good thing isn't it Smile

Boltonlass1972 · 17/05/2016 19:44

My son is 15. When he goes to uni will he be able to get loans for everything? I have no savings!?

FibbyMcFibFace · 17/05/2016 19:53

Bolton lots and lots of kids go to University without any parental help. It's not easy but it's doable. The thing to watch out for is that the rules for loans keeps changing so you will have to see what the terms of the loans are when your son is ready to go to university.

If you want unbiased information about student loans then have a look on MoneySavingExpert website Remember that the information will probably be for this years and next years loans.

senua · 17/05/2016 20:02

It is preferable to think of it in terms of a graduate tax once employed, most people never pay it back in full and it is written off after thirty years.

You know how the Millennials moan about Baby Boomers, how they are I'm-all-right-jack and it's so unfair that Millennials can't afford housing. The Millennials' DC are, in turn, going to moan about their blasé attitude to student debt and the fact that the DC will be picking up the tab when all these loans have to be written off.
There will be inter-generational grumpiness.

Original poster
goingmadinthecountry · 17/05/2016 21:18

She's worked this year to pay towards MSc and her travel over this summer - has already planned a part time job in London for next year. Touch types and has done audio typing for office angels so no fear of hard work.

That's not my point.

This is the first cohort of students on the 9k fees. Also the first to have the base rate + 3?% rate. Interest is accruing faster than she can pay it off at the 6% or whatever over 21k.

I'm not looking for sympathy at all - this statement just brought it home to me what a farce we've made of university education.

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goodbyestranger · 17/05/2016 21:22

goingmad thank your lucky stars you haven't bred a medic.

SellFridges · 17/05/2016 21:28

I was part of the first cohort to pay fees and have no maintenance grant in 1998.

I have earned above the average salary for 8 years, and over the threshold for paying back student loans for 12 years. I now earn over double the threshold for paying back my loan. And I STILL haven't paid it off.

I agree with those who said it should be considered a graduate tax. I can't see many people paying it back.

Original poster
goingmadinthecountry · 17/05/2016 22:05

goodbye, exactly. Lots of her friends are still vet students.

I was 49 when our mortgage was paid off; we have no credit card debt. We are giving our children a view of debt that is far too laid back.

Incidentally, I also went to RG university plus PG year.

OP posts:
Original poster
goingmadinthecountry · 17/05/2016 22:12

Not all Masters courses work part time. I'm doing a do it in your sleep one at my local university over 2 years. Doesn't lose me any sleep or stretch me. Dd's course only runs in 1 place in the country - places very hard to get. She's still at the clever end. Not all universities are the same.

OP posts:
Original poster
goingmadinthecountry · 17/05/2016 22:15

Sorry - that was a reply to wizzywig who suggested she do it part time. She will be working part time to help support it and has saved 4k towards it by working this year as well as funding 2 months of trvel.

As I said before, my gripe is about the madness of young people expecting debt rather than what my dd actually owes.

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sablepoot · 17/05/2016 22:18

It's a bit late now, but she might well have been better off taking the maintenance loans too and saving/spending the money. It wouldn't affect her repayments, they are based on earnings not amount owed, so unless she's expecting to go into a very high paying job and not have any career breaks/periods of part time working/periods of unemployment (in which case she just might pay off the loan before it expires anyway) then her repayments will be the same and the extra maintenance loan would have been free money.

NewLife4Me · 17/05/2016 22:20

I'm just hoping that a gov get in and scrap fees altogether by the time my dd is ready to go, or I doubt she'll go.

We can't afford it and I doubt she'll see through the debt.
It's ok to say don't look at it as debt and you only have to pay it back when you are working etc.
You still have to pay it back and some people can't work on a monthly way like this.
I can't my dh and kids don't think like this and the stress would be more than she'd want to take.

I know it's what she wants to do, she's even chosen her courses and she wants to go to London. It isn't going to happen bar a miracle.

Spam88 · 17/05/2016 23:25

NewLife4Me, I don't really understand what you mean when you say she wouldn't be able to cope with paying it back? It just comes out automatically and it's almost negligible compared to tax, national insurance and pension. Surely having to pay a student loan is preferable to not pursuing the future she wants?

OP, I can still remember my horror when I received my first statement and saw how much interest I'd accrued, and that was before it increased!

jeanne16 · 18/05/2016 06:37

I have engaged in numerous conversations, online and with friends, saying that the interest charged on student loans is horrendous. We don't pay RPI plus 3% on our mortgage. I am always told variations on 'it's free money' ( really!) to its just a graduate tax. Well extra tax of 9% per year is massive.

Unless you think your DC will never hold down a job or earn very much ( remember the 21k threshold for paying the loan back is not frozen), then if you possibly can help your DC by avoiding the student loan, then you should.

AyeAmarok · 18/05/2016 07:06

Meh, it's really not a big deal.

It won't stop her buying a property, don't be daft.

It's simply a little bit extra that will come off her salary each month along with her tax, national insurance, pension and anything else that her employer offers like flexible benefits.

If she doesn't earn over 21k she won't pay anything and it won't matter. If she's earning 30k (a good salary for someone a few years after graduating) she'll have about £60 a month come off her wages along with tax etc.

It's really no biggie (I've got one, hasn't stopped me doing anything).

SummerSazz · 18/05/2016 07:12

I think its the blasé attitude of, oh well I'll never have to pay it back, that I most worrying.

Smacks of a lack of responsibility and drives a debt culture IMO

Original poster
goingmadinthecountry · 18/05/2016 07:58

If she earns £30k and pays £60 per month, the debt will still increase because the interest is nearly double that even with inflation at its current low rate. It was 7/8% just before she started her degree! 2012 starters were doubly stuffed with the 9k fees AND the interest rate rise.

Dd2 has the maintenance loan but doesn't use it - maybe that's what dd1 should have done. Hindsight is a great thing.

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AyeAmarok · 18/05/2016 10:27

If she earns £30k and pays £60 per month, the debt will still increase because the interest is nearly double that

Yes, but, even so. No matter how much it goes up it's still only ever needing to be repaid at 9% of earnings over 21k.

Anyone who decides not to go to university to do a course they really want to do because of the student loan debt after is either not looking into it enough or planning on doing an utterly pointless degree (although there would still be a rationale to doing it if it was something you loved).

It's really not that big a deal.

vickibee · 18/05/2016 10:27

it is near impossible to pay it off unless you have avery high paying job, I had a small student loan in the 90's and have paid mine back in full but it was less than £6000

Mindgone · 18/05/2016 10:50

I think it's shocking too. I looked up my DS's future career earnings and put it into an online student debt calculator, it said that he would end up paying back over £100k!!!

NewLife4Me · 18/05/2016 11:08

it is a big deal to those who don't like debt and prefer to pay as they go along.
That was my point above, that some people can't cope knowing they have that much debt.
I think this is a good thing rather than an attitude of it's only debt and you pay it back slowly.
The fact still remains it's a lot of money to owe and a lot of interest that could take most of your working life to pay back.
It is also the last thing you need when starting out, then you may have a family and the timing is wrong for debt.
We have brought our children up to believe that debt besides a mortgage is a bad thing, especially if you have interest to pay back.
It was the way we were raised and something we really believe.
Our children seem to be the same, so my comment about dd was meaning she'll find it hard getting passed the mentality of having debt and wouldn't surprise me if she'd do anything rather than have student debt.