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Higher education

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

Original poster

Student loans - anyone changed their view recently?

163 replies

jeanne16 · 29/07/2017 15:48

Following the recent furore over student loans, has anyone changed their view about whether to try to fund their DCs university via a route other than a student loan?

OP posts:
SonicBoomBoom · 30/07/2017 16:22

But that's when you're losing 50% of your income. Not 9%. That would be daft!

Mindgone · 31/07/2017 12:09

Does anyone know if you can add their student debt to your mortgage?

titchy · 31/07/2017 12:43

Mindgone - why on earth would anyone do that?!

It;s possible of course - IF your mortgage lender agreed to lend to the £50k or whatever then you could use it to pay back the SLC. But you'd be mad. Giving your dc the £50k as a house deposit is a far better use of it financially.

SittingAround1 · 31/07/2017 13:21

The base rate is 0.25% students are being ripped off being charged over 6 %.

I don't know how anyone can think paying 9% of your salary over 21k for 30 years is acceptable.

What's to stop the 30 years being extended to 35? The terms & conditions can be altered anytime.

Mindgone · 31/07/2017 14:57

I think it's a bit of a gamble, because no one knows what the future holds for their DCs. We are hoping though, that ours will finish and pass courses which should lead to well paid jobs, therefore they would pay back multiples of what they've borrowed.

titchy · 31/07/2017 15:49

Except if your child stops working (illness, sahp, ft carer, emigrates, dies - sorry) there'll be no compulsion on them to pay back their loan. You'd always have to pay back your mortgage though.

Only the aspects covered by statutory instrument can change, not the ts and cs themselves.

Oldowl · 31/07/2017 19:17

So if you emigrate to Oz, you do not have to pay your student debt off?

(I must watch Wanted Down Under again!)

What about emigrating to France, post Brexit? Would your loan repayments really stop?

OhYouBadBadKitten · 31/07/2017 19:33

how long do they need to emigrate for?

Oldowl · 31/07/2017 19:54

From that article:

"The repayment threshold for the UK for the period April 17 to March 18 is £17,775. So anyone with an annual salary of over £17,775 is required to repay their loan and they pay 9% of their earnings over this threshold.

If you are living overseas we work out your monthly repayment schedule using the same principles as for those who live in the UK. So, you will repay 9% of your earnings over the repayment threshold for the country you are living in."

Have the T and C changed from £21k??

Original poster
jeanne16 · 31/07/2017 19:58

Dig you look at the detail in that link, you will find there are different threshold amounts depending on the country you move to. So it is 21k in the uk, but different values in other countries. Anyway you will still be liable to repay the loan regardless of where you are living.

OP posts:
boys3 · 31/07/2017 21:01

sorry old misleading link Blush , however the principle is the same as Jeanne points out.

SittingAround1 · 31/07/2017 22:55

Although if you move abroad they have no way of enforcing repayments.

Ifonlyiweretaller · 31/07/2017 23:18

My son would not be earning the salary he does without gaining his degree. So he accepts that he is paying it back pro rata based on his higher income.
The student loan does not affect any other borrowing so he appreciates that he is where he is ( in a good financial position) because of his further education.

SittingAround1 · 01/08/2017 12:48

But it does affect borrowing as it reduces his net income which will reduce how much on a mortgage he can get.

titchy · 01/08/2017 13:39

Not by much sittingaround.

Someone on £40k a year will be paying 9% on £19k a year which is £1710 per year, so a pretty small reduction in salary used for the calculation - probably amounting to a mortgage offer of maybe £6k less than they'd otherwise have got.

GetAHaircutCarl · 01/08/2017 14:02

We're paying so our DC won't have to take any loans.

The rate of interest is ridiculous. And it kicks in immediately, so students will owe more then they borrow almost straight away.
Sure, they might not have to make payments as soon as they graduate, if they're not earning enough, but in the meantime that debt is growing and growing.

And I'm pretty sure that my DC will end up earning over the threshold, so I don't want to saddle them with an extra 'tax'.

AndNowItIsSeven · 01/08/2017 17:07

But it doesn't matter if it grows and grows. If you only ever pay off say 40k it makes no difference if you owe 70k or 700k. It's not like a high street loan.

GetAHaircutCarl · 01/08/2017 18:02

It matters if you are going to earn good sums eventually!

Original poster
jeanne16 · 01/08/2017 19:01

If the 21K threshold remains frozen, and there is currently no sign of this changing, then it won't take too many years before this is having an effect on the amounts students are paying back.

OP posts:
SittingAround1 · 01/08/2017 19:03

Money savingsexpert loan calculator:
3year loan for fees= 3x 9250= £ 27 750

With a 30k salary you end up repaying
£70 950 in total over the 30 years

How is this a good deal?

SittingAround1 · 01/08/2017 19:03

Rich people just pay the fees up front & save £££££

titchy · 01/08/2017 19:09

With an average £30k salary for 30 years you end up paying back £24k....(9% of £9k x 30)

Oldowl · 01/08/2017 19:14

If you earn 30K you will pay 9% of £9000 (30k-21k=9k) each year.

This is £810. So over 30 years, if your wages stay at 30k, you will pay back 810 x 30= £24,300

How did you get £70,950?

AndNowItIsSeven · 01/08/2017 19:20

Get a hair cut not really you would have to be on a very high salary well over 100k to pay it all back. On that kind of money would you really struggle to pay?

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