Meet the Other Phone. Child-safe in minutes.

Meet the Other Phone.
Child-safe in minutes.

Buy now

Please or to access all these features

Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Paying off student loans??

9 replies

welshrarebit2 · 23/05/2024 11:09

We've paid off our son's student loan as he's studying medicine and likely to end up paying off it entirely but with a lot of interest otherwise. He's currently end of year 3 and so only 1 more year to go before NHS covers tuition costs and a bit of a bursary for living costs etc. So bulk of expense is done. Based on his future earnings we thought this was right choice and leaves him debt-free post-uni.
However, 2nd son is starting mathematics at local uni this sept - couldn't go far due to some disability issues. Very bright also and is hoping to get a decent job once he graduates - is looking at becoming an actuary so I think £30K rising to £50K (maybe even £70K after some years). However, given his job and earnings aren't guaranteed - unlike say medicine - I'm not sure if paying off his student debt is such a wise move for him. His would be wiped after 40years (if any remaining).
I'm old school and never liked accruing debt and would rather pay it down asap. I'm the type who saves up for things before buying them whenever possible. I also want to ensure financially we give both son's equal support - and having them both start out in life with no debt after education just feels right and might help with mortgage applications etc as no other financial commitments.
Anyway, just wondering if anyone had any thoughts etc?

OP posts:
GoogleWhacking · 23/05/2024 11:11

You surely can't do it for one and not the other!! DC2 will end up paying 10% of his substantially lower earning capacity for 40 years but DS1 will be living it up!

Bromptotoo · 23/05/2024 11:14

Student Loan is a complicated way of running a graduate tax.

I'd just let it run but I don't think you can fairly take the 'burden' off one child but leave it for the other.

PoloMum · 23/05/2024 15:13

Alternatively you could offer DS2 the equivalent amount towards a house deposit.

IbisDancer · 23/05/2024 15:24

Yes it is a wise move for both of them.
Your elder DS was on the old plan. Your younger DS would be on the new plan.

The new plan specifically makes education less costly for higher earners- they’d save £20k in repayments.

  • “The highest-earning graduates will repay around £20,000 less as a result of the lower interest rate.”

Most pertinent to your younger DS studying maths, the new plan means lower-middle earners (which is where your DS would be) will pay £30k more in repayments.

  • Graduates with lower-middling earnings will be hit the most by the changes with a lifetime loss of around £30,000. These earners enjoyed large taxpayer subsidies before the reform, but will have to pay back a much larger share of their loans under the new system.

IFS did a full report on the financial impacts of the new student loan plan
https://ifs.org.uk/publications/student-loans-reform-leap-unknown

Student loans reform is a leap into the unknown | Institute for Fiscal Studies

At the end of February, the government announced the most significant reform to the student loans system in England since at least 2012.

https://ifs.org.uk/publications/student-loans-reform-leap-unknown

autrejour · 23/05/2024 16:37

My DS is studying Maths - 2nd year and we will be paying tuition and maintainance for the final year. He will not take the loan. I wish we have done it for the first two as well. I do hope however that with a Maths degree he will be at least middle to high earner 🙏

Defiantlynot41 · 23/05/2024 17:06

This is a good analysis of actuarial salaries in the insurance industry (slightly out of date) - actuaries tend to earn really well

www.goodmanmasson.com/app/uploads/2023/01/Actuarial-Salary-Survey-Results-2022.pdf

Mumski45 · 23/05/2024 21:37

@GoogleWhacking I agree there should be more equal treatment here but why do you think OP's DS2 will have a substantially lower earning capacity. Actuaries are extremely well paid.

Faketanisapain · 23/05/2024 21:39

Equal treatment.

GoogleWhacking · 23/05/2024 21:59

Mumski45 · 23/05/2024 21:37

@GoogleWhacking I agree there should be more equal treatment here but why do you think OP's DS2 will have a substantially lower earning capacity. Actuaries are extremely well paid.

Well mostly the OPs own words. I didn't feel the need to look it up as I'd assumed she would have!

New posts on this thread. Refresh page