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Original poster

Student loan - where is the transparency?

90 replies

peepsypops · 22/10/2024 20:34

Full disclosure - I was a silly student who very much believed the "it's not a loan in the normal sense" and "it's more like a tax" so I took what I was eligible for back in 2004-2008.

Since then, I've worked consistently however my salary was not excessive ever (cabin crew) and I then moved out of the country for 5 years. I returned to the UK in 2022 working in an office role so I recommenced paying back the student loan aside from a mat leave I had which removed me from repaying again.

I have checked my balance and I can't believe how little I have actually paid off in that time (2008-2016) and I have been repaying for let's say 18 months now since moving home.

I checked the statements I can see and the interest is mental - 4.3%. According to the rules I will be paying this back until I'm 65 whereas if I started uni two years later it would be scrapped after 25 years? Why the difference? In real terms I get an approx £150 deduction per month and the balance is just never going to go down in any real way. I do have the funds to clear it however this is really set out of a bigger house deposit to upsize/general rainy day fund/life savings.

Should I just suck it up and accept this coming out of my wages every month?

How has the interest changed SO much?! If my mortgage rate did that I would be notified at the very least and I have never been?

Also on the SLC page, I can only see evidence of statements in 2016 and later - where can one access data pre-2016?

FWIW I am more than prepared to repay obviously BUT it's not even making a dent in it! It just seems like a con as this is not what I signed up for initially?!

OP posts:
Bjorkdidit · 23/10/2024 05:12

Whether it's worth paying off your student loan depends on which plan you're on, but Moneysavingexpert.com can be relied upon to give comprehensive advice on the points to consider in most circumstances.

Have a look at

https://www.moneysavingexpert.com/students/student-loans-repay/

Check you're looking at the right section, that the years and Plan number match.

But for you it might be a consideration based on interest rate, I don't understand why you think 4.3% is 'mental', that's quite low and likely to be lower than any other debts unless you have credit cards on a special deal or an old fixed mortgage before rates went up.

You could also beat that rate with savings, effectively covering what you're paying in interest if you need to save for a house deposit or similar.

cofefefela · 23/10/2024 05:22

whereas if I started uni two years later it would be scrapped after 25 years? Why the difference? In real terms I get an approx £150 deduction per month and the balance is just never going to go down in any real way. I do have the funds to clear it however this is really set out of a bigger house deposit to upsize/general rainy day fund/life savings.

this was infuriating to read.

The people who started university after you have to repay significantly more as fees increased significantly. You need to repay pennies in comparison so have significantly more favourable terms in your plan.

You also have the funds to repay it too! Logically you should prioritise repaying your debts before padding out your “fun” funds.

PuddlesPityParty · 23/10/2024 05:46

cofefefela · 23/10/2024 05:22

whereas if I started uni two years later it would be scrapped after 25 years? Why the difference? In real terms I get an approx £150 deduction per month and the balance is just never going to go down in any real way. I do have the funds to clear it however this is really set out of a bigger house deposit to upsize/general rainy day fund/life savings.

this was infuriating to read.

The people who started university after you have to repay significantly more as fees increased significantly. You need to repay pennies in comparison so have significantly more favourable terms in your plan.

You also have the funds to repay it too! Logically you should prioritise repaying your debts before padding out your “fun” funds.

Thank you for calling that out!

ChaqueJour · 23/10/2024 06:13

Meh I get you. I worked part time for a lot of years, now a higher earner and they are taking a small fortune from me every month, but I also have a child at uni herself to support! She gets less loan because of my earnings, with no mind given to the fact they are taking a small fortune from my pay every month. The system needs an overhaul.

Namechangencncnc · 23/10/2024 06:23

cofefefela · 23/10/2024 05:22

whereas if I started uni two years later it would be scrapped after 25 years? Why the difference? In real terms I get an approx £150 deduction per month and the balance is just never going to go down in any real way. I do have the funds to clear it however this is really set out of a bigger house deposit to upsize/general rainy day fund/life savings.

this was infuriating to read.

The people who started university after you have to repay significantly more as fees increased significantly. You need to repay pennies in comparison so have significantly more favourable terms in your plan.

You also have the funds to repay it too! Logically you should prioritise repaying your debts before padding out your “fun” funds.

Will they repay significantly more ? Or will we all just be paying £300 a month until forever. I have a plan 1, 2 and a postgrad loan so I don't know the answer to this!

Op, yes you have to suck it up, what else could you do?
When I graduated in 2012 I owed approx 21000 plan 1 and now owe 25000 plan 1. I have been employed as a teacher since completing my pgce and have always paid, including on both maternity leaves.

My plan 2 there are no statements for online but after teaching full time since graduating I owe around £7000- I only took 9000 for the fees.

My postgrad is at 7.3% and fortunately I only owe a few hundred.

Yikes.

Spacecrispsnack · 23/10/2024 06:32

The transparency is where you started actually. Student loans aren’t designed to be paid back by most - they are essentially a graduate tax. They’re built as a loan so they’re more difficult to avoid.

lastgreat · 23/10/2024 06:49

How much is your balance? I was on the same plan and paid mine off earlier this year. It was only in the past 18 months that my salary went up and I started paying off a significant amount (about £220 a month). It seemed like it was barely going down for years then it ramped up suddenly. Even on 4.5% you should be paying off more than interest.

lastgreat · 23/10/2024 06:50

I wouldn't overpay it though. It's not counted like a regular loan for mortgages etc. You kind of just have to suck it up

itwasnevermine · 23/10/2024 06:51

It isn't a normal loan though.

You pay it back via essentially a tax and you just get on with it. It's wiped out in a few years.

Original poster
peepsypops · 23/10/2024 07:01

lastgreat · 23/10/2024 06:49

How much is your balance? I was on the same plan and paid mine off earlier this year. It was only in the past 18 months that my salary went up and I started paying off a significant amount (about £220 a month). It seemed like it was barely going down for years then it ramped up suddenly. Even on 4.5% you should be paying off more than interest.

11k remaining and my salary is 40k currently although pay varies slightly depending on certain activity the previous month so they take varying amounts.

OP posts:
Original poster
peepsypops · 23/10/2024 07:06

cofefefela · 23/10/2024 05:22

whereas if I started uni two years later it would be scrapped after 25 years? Why the difference? In real terms I get an approx £150 deduction per month and the balance is just never going to go down in any real way. I do have the funds to clear it however this is really set out of a bigger house deposit to upsize/general rainy day fund/life savings.

this was infuriating to read.

The people who started university after you have to repay significantly more as fees increased significantly. You need to repay pennies in comparison so have significantly more favourable terms in your plan.

You also have the funds to repay it too! Logically you should prioritise repaying your debts before padding out your “fun” funds.

My question was not designed to infuriate anyone - apologies.

Naturally I know that those who graduated after have a lot more to repay and yes of course I feel lucky I didn't go to uni at a time were the fees were heavily increased but I didn't mention any of that because it's not relevant to my actual question which is would I be better off repaying it or not.

I'm also not being a twat about my funds to repay - like most in this world I'm trying my best to put together a decent deposit for a house for my child (and hopefully more children) in the future. I have also been made redundant before during Covid and am mindful of having a reserve therefore it makes me feel uneasy to remove 11k of savings to repay this hence why I was asking for other opinions on what they would do. I'm sorry but if that infuriates you then I can't help you.

OP posts:
Original poster
peepsypops · 23/10/2024 07:07

By house for a child I mean buying a house for our family now in the immediate future.

OP posts:
harvestdesigns · 23/10/2024 07:14

Yeah my student loan is now over £100,000 😂 It’s accumulating over 800 per month in interest alone now, I’ve stopped checking it 😂

shockeditellyou · 23/10/2024 07:17

Can we stop calling it a graduate tax? If we designed normal taxation in the same fashion as student loans, there would be riots,

HazelWicker · 23/10/2024 07:18

Yeah consider yourself lucky fees were lower. I got to uni in 2011 literally right before fees were hiked. I would have paid mine off within 25 years so I cleared it when I had the money to given how much interest was going up. You should just pay it off if you will within the 25 years, otherwise you've just got to put up with it. The interest rates are never hidden, you can always check it. But the difference is you don't have to repay your loan if you don't earn enough but you do always have to pay your mortgage.

Original poster
peepsypops · 23/10/2024 07:24

My issue with the interest rates is it was like 1.5% and now it's up up up since Sept 2022.

OP posts:
Era · 23/10/2024 07:27

You are right that it’s a loan/debt and we shouldn’t be encouraging anyone to view it as a tax. However interest rate wise you’re having laugh. DC was paying 8% last year!

Namechangencncnc · 23/10/2024 07:28

harvestdesigns · 23/10/2024 07:14

Yeah my student loan is now over £100,000 😂 It’s accumulating over 800 per month in interest alone now, I’ve stopped checking it 😂

Best not to look!
At one point they sent me statements in the post but that doesn't ever happen anymore.

itwasnevermine · 23/10/2024 07:30

peepsypops · 23/10/2024 07:24

My issue with the interest rates is it was like 1.5% and now it's up up up since Sept 2022.

So what?

You're not being chased by debt collectors. You're paying it off and whatever isn't paid off is written off.

Completelyjo · 23/10/2024 07:30

where is the transparency?

Interest rates over a certain period of time are pretty transparent though, it’s no one’s fault you don’t understand that.

If you took £30k out on a credit card and only paid the minimum would you expect to have made much of a dent in a few years?

moggle · 23/10/2024 07:33

peepsypops · 23/10/2024 07:24

My issue with the interest rates is it was like 1.5% and now it's up up up since Sept 2022.

It will go down again I think now inflation has come right down.
we had near zero interest rates for years- I have the same loan as you (started 1999) and many years on minimal or no payments and by 2022 my total had still gone down slowly - students now have had 7% plus rates and they will always be higher than we had.
sorry but apart from the 25 year cancellation we have it a lot easier than the students who came after us. It may seem unfair but it’s a lot less unfair than students now. The totals I see on news stories and Reddit are mind boggling.

Unexpecteddrivinginstructor · 23/10/2024 07:34

peepsypops · 23/10/2024 07:24

My issue with the interest rates is it was like 1.5% and now it's up up up since Sept 2022.

But all interest rates have gone up. This happens when you take a mortgage out too. When we took our current mortgage out the rate was 1.64, just remortgaged at 4.29. This is not to do with the student loan but it is just basic finance.

Current students will have massive loans and you will probably need to contribute to your child's uni maintenance too. On top of that the university sector is still underfunded because all of their costs have increased too.

moggle · 23/10/2024 07:36

Because of how the interest was structured on our loans - so closely linked to true inflation rates- the amount we owe hasn’t really changed in real terms since we left uni. Sorry but I just don’t think we (as in the group getting loans under Plan 1) can complain much!

tuberole · 23/10/2024 07:36

Plan 1 is pretty affordable comparatively, you must just have been a pretty low earner, you benefitted from very low interest rates for the first decade or so. Plus you haven't paid anything for a 5 year gap by the sounds of things? I paid very little in the first 10 years because I had kids young, maternity leave, part time entry level work etc, but my career picked up in my 30s and I'm paying it off pretty rapidly now, should be paid off by the time I'm 37, nowhere near the 25 year cut off plan 2 has.

When you start earning more you'll make a sizeable dent.

WhitegreeNcandle · 23/10/2024 07:43

Wow. As someone who went to uni in the late 90’s and whose children haven’t hit uni yet I’m horrified by these interest rates. No wonder their schools are pushing degree apprenticeships - there can be very very few degrees that are providing a good ROI.

No answers I’m afraid OP. The only thing I did was back in the early 2000’s I went all Dave Ramsey (before I knew who he was) on my admittedly very small student loan. Worked an extra job, over paid it and cleared it as I don’t like any form of debt if I can avoid it.