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Higher education

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

Original poster

Student loan worries

115 replies

SadBut · 13/02/2023 08:23

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?

OP posts:
latetothefisting · 13/02/2023 14:13

FrenchandSaunders · 13/02/2023 13:36

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.

This.
There are a lot of helpful guides to help her understand. Just make sure she DOES understand (even if you dont) as she will be liable for repayments either way (if she meets the thresholds etc) - she can't turn around when she's 30 and say "oh my mum said a poster on mumsnet/her mate linda tols her I wouldn't have to pay this back, if I'd known I wouldn't have taken them out and would have done an apprenticeship."

To be clear even if she takes the loan and then drops out of uni/doesn't graduate she will still be liable for however much she's taken out and if she earns above the threshold will have to pay it back even if she's in a field completely unrelated to the course she took.

E.g she studies law but drops out in her second year and works in tescos on the tills (just as an example of a "straightforward" job). She might completely forget about the loans but 10 years later the minimum wage hits 25k and she has to start paying them back (2xtuition fees and 2xmaintenance plus 12 years worth of interest) and might have to keep paying them back for the rest of her life - so although people refer to it as a "graduate tax" she doesn't have to have graduated to still owe it!

OntarioBagnet · 13/02/2023 14:18

I had my loans in the mid 90s and the repayment terms were indeed changed after I took them out, actually after I’d finished university. It was to do with how interest was calculated rather than how the monthly repayments were done.

But I’d been happily bobbling along accruing something like 0.2% interest and then overnight they switched it from RPI to CPI or the other way round and then it was accruing 4.5% interest. So my overall amount I had to pay back increased significantly.

Seemed unfair they could do that. Anyway I worked part time for 20 odd years and only paid 1k back and then it all got cancelled. 😀

helloisitmeyourelookingfor · 13/02/2023 14:31

@SadBut

Are you confusing it with the American student loan system where you do have to pay it off regardless and it can be very challenging for some people to keep up with payments?

She will not need you help to pay off student loans

If she earns below threshold she does not need to pay -and this includes if she chooses to go part time in the future (or self employed)

LIZS · 13/02/2023 14:32

How was she anticipating funding her higher education? It seems as if this has come as a surprise.

TallulahBetty · 13/02/2023 14:34

To add to the perspective given above. I earn £30k and pay back something like £60pm. I don't even notice it. Honestly - this is a non-issue.

Catoneverychair · 13/02/2023 14:36

titchy · 13/02/2023 11:44

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.

25K, I believe. Looks like I'll be paying it back in my 80s...

TallulahBetty · 13/02/2023 14:38

TallulahBetty · 13/02/2023 14:34

To add to the perspective given above. I earn £30k and pay back something like £60pm. I don't even notice it. Honestly - this is a non-issue.

And when I say 'pay back' - it's deducted before I even get it.

3WildOnes · 13/02/2023 14:42

It's not like a bank loan where you have to make your monthly payment regardless of your income. If she I earning under 25k she won't need to pay anything. Stop holding her your daughter back. You clearly dont understand how the system works so stop confusing and upseting your daughter.

WeWereInParis · 13/02/2023 14:51

SadBut · 13/02/2023 10:44

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

I'd love to be earning enough to pay £1,000 a month!

WeWereInParis · 13/02/2023 14:54

SadBut · 13/02/2023 12:35

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....

You will never need to dig her out from it. Is she loses her job, or doesn't earn enough, she will not have to make any repayments.

anniegun · 13/02/2023 14:56

Wait till you find out that governments also change income tax rates, pension rules, inheritance taxes , national insurance rates , maternity pay, benefits eligibility. Landlords change rents, banks change mortgage rates. Life has a few financial uncertainties you know

Postapocalypticcowgirl · 13/02/2023 15:00

I'm afraid parents like you really do my head in OP. You can't be bothered to get your head around the student loans system, but you're happy to mess up your daughter's future.

It's her life, not yours. Let her make her own decisions. If you like, say you won't help her at uni.

"I can't afford the repayments if she struggles"- well, if she is struggling, she likely won't have to repay as she will have dipped below the repayment threshold.

Most people never pay their student loans off in full, so talking about paying off the capital is pointless.

Apprenticeships are only good for those who want to do them. Most people are much better off with a degree, not just financially but in terms of having had the experience of going to uni and getting to study the subject they love.

In many places, she will do a few years cheap labour via an apprenticeship, and then be left without a job at the end of it. She may find another job, or may end up deciding she needs a degree to progress her career after all. Although earnings in their early 20s can be higher, you also need to think about the long game- how far can she progress in X career without a degree?

Stop trying to stress her out and put her off uni and let her live her own life.

WhatInFreshHell · 13/02/2023 15:02

Please read up and understand this more before you speak to your daughter again. You've upset the poor girl now.

Postapocalypticcowgirl · 13/02/2023 15:04

FrenchandSaunders · 13/02/2023 13:36

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.

TBF, when you are say, 17, and your parent is constantly telling you how terrible student loans are, and what if this, what if that, it can be difficult to believe what you read about it online.

After all, at 17, most people trust their parent's financial advice over what they read on the internet.

I've unfortunately seen this with more than one student during my time as a teacher- if the parent is constantly saying things like "what if you lose your job, what if you can't pay it back, what if, what if" it can be difficult to believe what everyone else is telling you about student loans.

It's very unfair.

Fairysilver · 13/02/2023 15:06

Surely it's the interest (that does change) that accounts for how much she needs to pay?

No.
They don't work like that.
The repayments are entirely based on how much you earn, not what you owe.
So if you borrowed a million pounds but earned below £25K you pay NOTHING.
If you borrowed £1million and earned £30K you pay around £60 a month.

The poster who's DC earns £200k and pays £1k a month - she should pay the loan off. The very, very highest earners are better off paying off the loan. Which on £200k you could do in a short time.

3catsandcounting · 13/02/2023 15:08

For clarity OP, my DS started his graduate scheme job 6 months ago, on a salary of £31K p.a, meaning his loan repayments kicked in immediately. His repayment is around £20 a month. He barely notices it.

titchy · 13/02/2023 15:09

25K, I believe. Looks like I'll be paying it back in my 80s...

Lucky you with a large enough pension that means you'll be above repayment threshold...

GordonShakespearedoesChristmas · 13/02/2023 15:11

SadBut · 13/02/2023 10:44

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

So you'd worry if your daughter was on £150-£200 THOUSAND per year?!

Don't be silly.

LIZS · 13/02/2023 15:13

I'm surprised a year 13 has got an unconditional offer, but perhaps she can investigate any additional funding there and at any others offering conditional places such as scholarships and bursaries.

TizerorFizz · 13/02/2023 15:35

@LIZS Unconditional if firmed is still around. Bums on seats places. Ditto the below predicted grade offers too. I suspect the DD in question has pitched her choices too low!

The op doesn’t seem to have availed herself on any information. Or doesn’t understand it. It’s obviously going to be a bigger sum every month if you earn more. DD has just paid off her 2014 loan. Old system of course. But it’s gone. It’s clearly worth going and the tax is progressive. Hopefully the DD is more clued up.

Xenia · 13/02/2023 15:51

If you get an unconditional it means it is a place you should not touch with a barge pole and instead go to the hardest place you can manage with the highest grade requirements.
On the loans I paid the fees so mine do not have loans, but depends on likely earnings. My daughters are lawyers in London so on more than £100k and as we thought that likely in these rare cases if parents can afford it no loans may be wiser as you pay 9% above the threshold eg ifyou are on £100k that is about 9% of 75k.

If she is likely to year about £30k or in a family where women stop full time work when babies come and never work that much again then the loan is not so bad and in fact tax payers in effect fund the 3 years of university for those who will never pay it or any of it back.

TizerorFizz · 13/02/2023 15:57

@Xenia
That is why there are changes for 2024. It’s too expensive when too many pay little back. There is a need to ensure degrees lead to decently paid work. Or parental expense and government funding is wasted.

RedHelenB · 13/02/2023 16:06

SadBut · 13/02/2023 10:44

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

But how much would she need to earn per year to pay that amount back ?
The good thing about the loan system is it dies with you, and if you earn less than the threshold ( under about £27 000) you don't have to pay it.
Ultimately its your dds decision but I wouldn't let the loan system put her off.

HazardaGuest · 13/02/2023 16:14

TizerorFizz · 13/02/2023 15:57

@Xenia
That is why there are changes for 2024. It’s too expensive when too many pay little back. There is a need to ensure degrees lead to decently paid work. Or parental expense and government funding is wasted.

Your post implies there is no societal gain in education other than increased earnings.

YorkshireIndie · 13/02/2023 16:15

Just think of it as an extra tax that you only pay when you earn so much. If you earn below the threshold you stop. If you move abroad it stops etc

To pay £1k a month means that you are earning ££££££

We could be in America where student loans are harsher

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