Student loan worries

[SadBut]

Hi DD is looking to go to university. One unconditional offer
Three offers below her expected grades
REALLY worried about her loans
Can the conditions of the loans be changed by the government AFTERWARDS?
I've seen where the terms of the loan have been changed from Some one paying £20-£30 a month going to £89 per month!!!
Can they do this?

Who is worried? You or your daughter?

She apparently wants to go to university. Which presumes 3 things:

She has been working hard at school.

She enjoys academic work and doesn’t want to take up a vocational apprenticeship.

She has no apparent outstanding artistic or entrepreneurial skill that would launch her into a successful career without a degree.

All of these combined suggest that the quality of her adult life without a degree would be conspicuously worse than her life with a degree.

Think of the training in critical thinking she’ll miss out on.

Think of the friends (presumably equally ambitious) she won’t make.

Think of the independence she won’t be gently introduced to.

Think of the jobs and training opportunities she’ll be locked out of or compelled to find less attractive routes into without a degree.

(Obviously the above is all based on the assumption that she’s hoping to study a ‘proper’ subject at an at least reasonably well thought of institution. Not sure where the cut off point is for ‘this degree is not worth having’.)

Surely, all things considered, the exact terms of a student loan which won’t kick in for at least four or five years (if ever) should be quite low down on her list of priorities?

I'm trying to be realistic for my DD
I strongly feel for such an enormous debt she needs to have a plan to pay it back
My big concern is she'll take the debt on (she can get the whole amount for both fees and housing) but then the government can change repayments.
I'd be VERY happy for her to get a degree apprenticeship, but they're really rare, and often for existing staff from what I can see

Honestly £1000 PER MONTY
OMG 😱
Thankyou so much Angelkitty
Exactly my worry

So she's earning £200,000 per year. I would call that a good payback on your university education.

Student loans come out of your pay automatically so she will never have to think about paying it back. You pay 9% of earnings over 25k or possibly higher. The pp paying 1000 a month must earn over 100k a month, or be on a payment plan they chose to pay the loan early, so not a worry. This is not something to be concerned about. Although if you are low earners she will probably need a pt job whilst at uni.

10k a month obviously. 100k a Yr.

You have to be earning a significant salary to pay £1k pm. You pay nothing until you earn £25k www.gov.uk/repaying-your-student-loan/when-you-start-repaying . They can vary this afterwards though.

I think you have to think of it as an extra tax once earning so much once working and not as a loan. If she doesn't go to Uni yes wont have this but will her earning potential be the same in the long run?

Ignore Angelkitty. As the previous poster says, her daughter would have to be earning an enormous sum to be repaying anything close to £1k per month!!

It’s best to view the student loan repayment as a kind of tax. It only starts to be repaid once the graduate is earning a reasonable salary. Terms may vary - like tax can vary. But your daughter is still best to go to university and aim high in her career afterwards.

And this is your first response …

🤔

I graduated 5 years ago, earn around 60k pa and pay £241 a month

Sounds like a bargain to me given my previous salary pre-degree

Second response! But still … A wholly unreasonable response from any informed parent who has taken to e trouble to read all the available information on student loans.

Paying £1k per month would mean you’d clear the loan pretty quickly but I’d be encouraging my dd on £200k to over pay more now while she is young to clear it even quicker and get rid of it

"They can vary this afterwards though " that's the thing
Whatever I read now (I don't find it particularly well written, tbh or easy to follow exactly what DD will pay, and how much I'm expected to fund). The fact the repayment TERMS can change is the worry

When the government changes the terms of the loan they do it for new students. The recent unfavourable changes only apply to students about to start, if I understand it correctly. I would hope that this dreadful government wouldn't retrospectively change the ts and Cs of the loan system.

The thresholds at which they pay their loan back won't change retrospectively. The percentage of earnings they pay back over that threshold won't change. The interest charges does change.

If your dd earns £25k a year she will repay roughly £30 a month. About the same as a Pret subscription.

Don't discourage her

They don't change the terms randomly like you seem to think. I believe this year's intake of students will have a slightly different payment system to previous students, but that was announced last year.

It's really nothing to worry about. The loan she receives will be based on parental income (max being £9K, minimum £4Kish). If she gets the minimum and you can't afford to top it up (bearing in mind they don't take into account any other outgoings), then she'll have to get a job alongside studying, which most students do.

Thank so much everyone
Surely it's the interest (that does change) that accounts for how much she needs to pay?
Yes she will get a job
I'm more than happy to give her what I can (but this won't be much )

Don't discourage her

Looks like it’s too late for that

I strongly feel for such an enormous debt she needs to have a plan to pay it back

The OP has already made up her mind - based on apparently zero information.

Thresholds go up (think the next change is something like 27k before paying anything). The loan is fees as well as maintenance, if you opt to take it. If finances are tight a degree apprenticeship may be an alternative option, depending on what she hopes to study. Some unis have bursary schemes and scholarships.

No. Regardless of interest rate and total amount borrowed she will pay back 9% of her earnings over £21k a year. It's really not like a car loan or mortgage at all.

She pays back £30 a month on a salary of £25k if she has a loan of £10,000 or a loan of £150,000. It makes no difference.

In which case her annual salary must be something around £150,000?

Doesn’t seem too bad.

The interest rate on the loan won’t change once she is in the system. What she pays back is dependent on her income more than anything. The current system, you pay 9% of all pre-tax income above £27,295. So say she gets a graduate job earning £30,000 post graduation (which is a very modest estimate, lots get more depending on their subject/career choices) she’d be paying back £23 a month. It’s written off after 29 years, loads of
people never pay the whole thing off now.