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Higher education

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

Despite higher interest rates Martin Lewis says don't pay off student loan early

45 replies

Dunlurking · 18/07/2017 03:38

Despite the increase in interest rates on students loans, Martin Lewis says don't pay off any of the loan early.
www.theguardian.com/money/2017/jul/17/uk-students-loans-interest-rate-martin-lewis
This is reassuring - he says continue to consider it as a 9% graduate contribution/tax. Only those who start on a £40,000 year salary after graduation and continue with large pay increases would benefit.

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awishes · 26/07/2017 21:34

In the most junior hospital trainee post of Foundation year 1 your basic starting salary is £22,636. This increases in Foundation year 2 to £28,076. If you're a doctor in specialist training your basic starting salary is £30,002.

SonicBoomBoom · 26/07/2017 22:18

But that's before enhancements, awishes, which adds considerably to the junior doctors' take home pay. Most FY1s will net £1800 per month, which is a salary of approximately 30k. Not wonderful, but it's a good graduate year 1 starting salary, and goes up relatively fast (compared to nurses, other HCPs, teachers, etc)

Pynk · 26/07/2017 22:39

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Pynk · 26/07/2017 22:43

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GardenGeek · 29/07/2017 17:16

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JoNapot · 29/07/2017 17:19

Agree with posters pointing out that the goalposts will almost certainly change. They have done so already.

picklemepopcorn · 29/07/2017 19:25

I definitely worry about the changing Ts & Cs. It feels really risky to me.

Dunlurking · 30/07/2017 09:24

Most people will have no choice. Ds gets almost the maximum maintenance loan. The only time we could consider helping any more would be when his grandparents die and we inherit, and I believe it would be better for him (and dd in turn) to use the money as a deposit on a house/flat at that stage.

I'm afraid I agree with posters who say mumsnet is a skewed population, and unrepresentative of the UK population. My ill health pension and dh's salary added together give us almost exactly the average UK salaries for a couple (however we have paid off our mortgage, fortunately). In the real world, you live with, and put up with the crap service of the student loan company if you want to go to university.

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rogueantimatter · 30/07/2017 15:20

My DS is going to study in London and before anyone comments that this is a choice blah blah - he has chosen the HE institution that he thinks will give him the best chance of making a living in his chosen field. There's very little work outside of London. He got a £2K scholarship and £4K grant, thanks to being regarded as "exceptionally gifted". He still needs the maximum loan he can get which is £4750 - we're Scottish. We will struggle to top up the extra £1,000 he'll probably need, as his sibling is also still at uni. The Scottish loan system requires repayments from just over £17K and isn't written off for 35 years. It makes me furious. Over a third of the students at his conservatoire will have gone to fee paying schools. At the other conservatoire he considered more than half the students will have come from fee-paying schools. The system is ridiculous.

rogueantimatter · 30/07/2017 15:21

Sorry I know that's a bit deraily.

Out2pasture · 30/07/2017 15:40

A debt is s debt there is no good debt.
Owing money and thinking it's fine is the first step towards credit card hell.
We paid off 3 dc uni costs, not the only family I know of who did.

BubblesBuddy · 30/07/2017 16:39

What difference does it make regarding private schools? I think that's just jealousy really. Are you saying everyone whose child goes to a private school takes places from children like yours? Surely if they are gifted too, they deserve a shot at a conservatoire too? Or is it just poorer people who deserve this chance?

Lucysky2017 · 30/07/2017 17:26

Indeedd and plenty of those in state scholls have mothers who have chosen not to work for 20 years whislt those of us who have been slogging it out full time for 30 years without any long maternity leave breaks and having picked work deliberately which was better paid rather than following some kind of low paid dream job, can sometimes be more likely to afford to ensure the children are debt free.

The utter unfairness is the other way with Scotland - not a penny of fees do they pay up there yet one of my twins (back up choice Edinburgh) will have to pay. How we think it is just fieid in a united kingdom that the Scots to go their universities for nothing and our children taken on huge debts is beyond me. It is not as if our tax rates are half those in Scotland.

I17neednumbers · 30/07/2017 19:34

On the future changes to terms and conditions I do think JC has changed the political environment for the moment so that it would be very risky electorally for a con government to do this.

It would not be a good starting point for the next election campaign to have increased the interest rate or abolished the write-off.

But. 30 years is a long time in politics, so you could easily forsee a time when the ts and cs are changed in the future to the disadvantage of the borrowers.

rogueantimatter · 31/07/2017 09:31

Plenty of mothers have been slogging it out full time for 30 years but can't choose to have picked work deliberately which was better paid and still can't afford either fee-paying schools or much in the way of help with their children's living costs at uni, let alone pay their fees - £9,250 in some cases this year.

I completely agree with the Scottish system being unfair in comparison to the rest of UK. It's a scandal that English students have to pay to go to Scottish unis, unlike everyone else in the EU. My point is that the most disadvantaged students in UK are those Scottish students who study in England as they have to pay English fees and have a more onerous loan system than English students.

What difference does it make regarding private schools? I think that's just jealousy really. Are you saying everyone whose child goes to a private school takes places from children like yours?

No, because my child is apparently "exceptionally gifted" so he can go because he got a scholarship and an award, but he is also exceptionally lucky to have had heavily subsidised instrumental lessons and specialist teaching in a free, Scottish state school. This is not an option for many English children in the same financial circumstances as him. Without that he would have been unlikely to get in. Having an expensive instrument gives those children who can afford it an advantage, as does having lessons from the best and often most expensive teachers. The conservatoires recognise that they are not as socially diverse as they ought to be to get the best talent and have recently started outreach work to try to support children from less well off backgrounds. The current loan system with its uncertain terms, scandalous interest rate and absence of grants for even the most financially disadvantaged students is not helping their cause. Some of the regional music groups my DS has been in have had no children from the most deprived council area in the region. Are there no talented children in that area? There are extremely talented students who have to drop out because they can't afford to live in London.

What about the children in state schools who have mothers who cannot choose to work for twenty years? They exist you know. Not everyone is fortunate enough to have good health and healthy, able-bodied children. Didn't you read Dunlurkin's post for example?

Working hard and making good choices is not enough on its own to ensure loan free access to HE. Like most other things in life there's an element of luck. You are presumably fortunate enough to be able -bodied and to have children fortunate enough not to require full time or extensive care.

While I'm on the subject, very few people are fortunate enough to have the brains to get a well paid job in medicine, law, engineering or the city.

My free advice for bubbles and Lucy is to count your blessings.

Dunlurking · 31/07/2017 10:28

rogue I'm with you on the huge costs of getting a child to conservatoire standards. Both my dcs cost exorbitant amounts in fees for music and dance lessons in their time. And they were nowhere near required realistic standards for auditioning (well ds was, but chose not to). We're down to just 2 lessons a week now, thank goodness. Once it was 7.

I was one of the fortunate getting a well paid job in medicine, but anyone can get ill. I'm lucky to have a respectable pension at a relatively young age. Anyone's circumstances can change - the £40, 000+ a year isn't guaranteed for life. Anyone doing medicine would have to find a huge amount of money to avoid a student loan. And there's no time to find jobs while you are a student. Just get the loan.

I17need that is a really good point that the Con party probably won't dare change the t&cs in the near future.

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Dunlurking · 31/07/2017 10:30

Sorry that should be "no time to do p/t jobs while you are a student"

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Dunlurking · 31/07/2017 10:35

Sorry, that should be "no time....if you are a med. student"

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JoNapot · 31/07/2017 10:36

Rogue I can't disagree with anything you have said there.

The longer term / lower threshold on the Scottish loan means that when we looked into (with just a back of an envelope series of calculations I should add!) many Scottish students who study in Scotland and only take out the loan for maintenance will end up paying more than a student with a seemingly much more massive loan in England!

Dunlurking · 15/08/2017 18:15

Well this isn't going to persuade students to vote Tory anytime soon. Interests rates confirmed to be going up to 6.1% www.bbc.co.uk/news/education-40936283

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