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?

The interest rate does change. However the repayment rate doesn't.

And your example is for those at uni now on plan 2 loans. Those that start from 2923/24 will be on new terms and condition - 40 year repayment period and around £21k threshold.

This shouldn’t be a reason to not go to university. It should be seen as a graduate tax only paid back out of earnings.
The government can and do regularly change the income tax system but no one would use this as a reason to not have a job.

Obviously anyone earning enough that they're paying £1k a month under the current system is phenomenally wealthy; to suggest that sort of salary is representative of the middle class is pretty tone deaf. If people with normal salaries were expected to pay that amount the economy would go into meltdown and no government is going to risk every single 30 something graduate defaulting on their mortgage simultaneously.

I earn around the national average and pay around £60 a month. It comes out before I get it so I dont't see it to miss it. If I lost my job or had to take a big pay cut I wouldn't pay it at all. There is no incentive for any government to make the repayments unaffordable.

It's not a normal debt, OP, and if you choose to prevent your daughter from taking this opportunity you will be doing her a disservice.

YY to the person who said about apprenticeships
Much better option, but not easily available
I've just told her I carnt afford the repayments if she struggles in the future
She's pretty upset tbh

you really seem to have very little understanding of the student loan system and you need to stop talking to your daughter about it until you do. She had no reason to be upset.

repayments are made automatically from her salary when she earns above the threshold. If she ever drops below that threshold she will automatically stop paying.

there will never be a circumstance where she struggles to repay them because of this.

Her salary, when paid into the bank, will have already had any repayments taken out. She will not need to ‘find’ or ‘struggle’ to find her repayments. Please encourage her and be proud of her, rather than doom and gloom about loans when your interpretation of them isn’t even correct.

Careful over that bumpy bridge …

Why would you cover repayments? If she earns over the threshold she has to budget for it (it is automatically deducted from salary), just like any other student taking SF.

He, he, he PP
I'm not a troll AND FWIW not middle class
Me and DD pretty overwhelmed tbh
It's such a lot of money
An amount that I can't dig her out from
At school there pretty blaze about the whole thing....

Most of the info you need is here. Worth reading or watching and understanding, although most parents & students tbh do so before actually applying for university. I do understand the worry of the massive amounts of debt they're racking up, but you really do need to understand the process properly rather than scaremongering.

www.moneysavingexpert.com/students/student-loans-2023/

There is a thread full of posts telling you that you have not understood how student loan repayments work.

And yet, during the course of the thread, you inform us that you have given your daughter completely inaccurate information, upset her and - no doubt - persuaded her not to take up a university place.

I do not believe you.

Awful, awful.

OP stop talking to your DD until you understand this better. Repayments are taken directly from hercsalary when she earns over the hreshold, yoi dont need to pay anything for them

He should also be getting a job while at uni to fund her day to day living

Fair enough crk
I came on here because there's often people who will help
People who have been in a similar position
From what I can tell the government CAN change terms and conditions
But
Mostly they don't, and you stay on your plan
Still £££££
She's gone out now, so I'll leave it a bit

If your DD finishes her degree, she will repay loan, not you. Before my DS went to University we had various meetings to explain how student finance works, I’m sure the Student Finance website will explain how you repay the loan.

You don’t need to dig her out from any debt.
it’s a tax, taken at source prior to receiving her salary each month. She will not miss it because she’s never had the extra. If she never earns over the threshold she’ll never repay it.
it does not impact your credit score.
yes it may be irritating when you see your payslip deductions, but what you need to remember is often the reason for the large number on your payslip is because you have benefited from the Uk higher education system.
intrest rates change in line with inflation, repayment percentage does not.
stop discouraging your daughter from a chance at a better career because you don’t understand the student loans system.

fyi to be paying back 1k a month you need to earn circa 150k p.a

@SadBut she won't start repaying it til she earns about £27k and even then it won't be a fortune . Really not something to worry about before she has even gone to Uni . I have nothing to do with my sons repayments , not my business .

OP you're not understanding that student loan repayments are taken out of salary, like tax. And only over a certain amount which I think is around £27k.

If you have little experience of university then it can seem intimidating to take on what sounds like a lot of 'debt' but it isn't a regular debt AT ALL. Nobody can suddenly say 'actually we know you're only on £16k at the moment, but we want you to start repaying' it doesn't work like that. If it did there would be riots.

It doesn't affect your credit score.

I paid off my BA student loan but have never managed to pay off my post grad loans, and am unlikely to as I'm full time carer to disabled child. They'll be written off.

YY to pausing and understanding the system first. You should think of it much more like a tax than a loan. Are you saving money to pay your DD's income tax when she is an adult? No, obviously not. Neither will you need to pay her SL. I

You aren't reading what people are saying, or the Martin Lewis link. It's not like a regular loan, it's a graduate tax, taken at 9% of salary once she goes over a threshold. If she takes a loan of £10K or £100K she will pay the same each month (obviously the £10K will be paid off sooner). There's no bailing her out, it doesn't work like that.
I wish they would call it a graduate tax rather than a loan.

What are you on about? If she isn't earning enough to make the repayments, THERE WILL BE NO TEPAYMENTS TO MAKE. You're really not trying to understand are you?

I’ve been on (seemingly) hundreds of similar threads. The OP almost invariably responds with immediate relief and delight when the system is explained to them.

They don’t refuse to acknowledge any knowledgeable advice and instead - mid thread - inform posters that they have just given their child completely inaccurate advice, upset the child and probably dissuaded them from going to university. Hee hee …

It’s very unusual behaviour.

Without wishing to come across as mean, if your DD is bright enough for uni, she should be bright enough to be reading up on all this for herself and working it out.

It depends what you mean.
The interest won't effect how much (monthly) she pays back as that will be set as 9% of everything over the threshold so it won't matter what the interest rate on the loan is. The only thing that will effect how much she pays back per month will be her salary-i.e. when salary increases she will pay more

BUT the interest rates will have an effect on how much the total loan is and therefore how long she takes to pay it back. E.g interest on 20k at an average of 1% will be lower than 20k with a 10% interest rate so thr total will be repaid faster. However I believe the new student loan which will start this year in England is "better" in that way as the interest rate is only limited to the RPI rather than RPI plus 3%

The other thing that will effect how much she pays back is the threshold and again that could change -as in its going to be lower for new students than current ones. Its unlikely that the government could lower it further than the agreed amount but what they can do is not raise it in line with wage inflation. So for example student loan repayment will currently only kick when she earns over 25k. Previously governments have increased this threshold in line with wage inflation but they don't have to do this.

Money saving expert has probably one of the clearest guidelines to it all. However the key thing to bear in mind is that most people won't ever repay their whole loan so to some extent its irrelevant how much the total amount is or how much the interest rate....thus the explanation that it's more like a graduate tax than a traditional loan.