Student loan - where is the transparency?

[peepsypops]

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?!

Graduating in 2012 with £21k on plan one and currently owing £25k seems off.

I graduated in 2012 after borrowing about 18k and despite working for a few years under the threshold, plus 2 mat leaves it’s currently about 11k on plan one.

I've been having the same conversation with my husband lately.

We're early 30's and when we were young it was kinda drilled into you what a soft loan student debt was. I'm sure all the information was available to us if we took it upon ourselves to research properly, but money management or sense isn't at its finest when you're 17/18.

The scale of the commitment and loan you take on as a student should have been made so much more aware to us. I never remember anyone talking about it in any serious sense. I feel completely conned and extremely annoyed.

I'm now of the mindset that Uni is a con, and most people really don't need a degree for the job they're doing. Lots of unis and degrees are pointless and rely on immigration to keep them going.

It's mostly a disgusting money making scam, wish I had never gone.

It's not a graduate tax because it's not applied to all graduates.

It's a tax on graduates who were not fortunate enough to have a rich mummy and daddy pay their fees for them.

It's a tax purely on less well off people, who are trying to improve their life chances, whilst those who are already well off don't have to pay. Makes me seethe.

Yes I'm with you OP. I have a plan 1 loan and a plan 2 loan as I re-trained. In hindsight I didn't actually need to go to uni at all, I could've re-trained on the job (although when I asked someone in that field they initially said no, even though the answer was yes, just not in the immediate local area) and of course never use my first degree. But at 18 I didn't have a clue what I wanted to do. I've not even remotely made a dent in the loan. I do feel somewhat resentful that plan 2 gets written off after 25 years but plan 1 we pretty much pay forever. Yes plan 2 cost more but actually if it's getting written off after 25 years that seems a better deal. My parents haven't worked in years (yes I know they should and no I don't agree with their lifestyle choices but that's not in my control) so I ended up getting maximum loan for my first degree so it's ridiculous how much I now need to pay back.

How are people seeing this info? I've got a very old one from 2000 which I pay a small amount to every month. I feel like it must be over now but have no way of checking? Do I just trust the government to stop taking it from me when I've paid?

I also had an overpayment from a later course handed to debt collectors, which I pay every month, but again, get no balance statements for.

No you don't trust them. If you Google student loan repayments there's a portal for you to log in. My ex overpaid accidentally as they didn't tell him he'd finished paying it.

I wouldn’t pay it off now. Your savings are for yours and your families future, for those reasons you’ve given. If it were me, I would continue to save. Increase your income when you can and it should be paid off in, say, 10 years?

Were you not earning when you lived abroad for five years? Why didn’t you continue to make repayments during that time?

@daffodilandtulip you can go online at Student Finance and see, my DS did for his, but unfortunately both mobile number and email address they held was old, so he had to phone them to reset their data base. I understood that after 25 years, Student Loan gets written off, so you should contact them to see that this is the case with yours as you are nearing 25 years.

I don't think it does get written off after 25 years if it's from 2000. I think those last until you're 65.

I think from 2006 it's written off after 25 years. And plan 2 is 30 years.

Sorry but I just don’t think we (as in the group getting loans under Plan 1) can complain much!

Yes, it's all relative as later plans are horrendous. Repayment over 30 or 40 years, interest rate extortionate, starts to accrue from Day 1 and minimum borrowing is close to 30k.

Too many people are going to Uni at 18 when other routes are available. It seems to be the default position rather than a decision based on a proper assessment. Many students drop out, retake years and incur high costs which will make them indebted for 40 years. Some Unis have lowered grade requirements just to get "bums on seats" so the quality of education will decline.

Student loans from August 2023 are only wiped after 40 years.

It was 30 years but Sunak extended to 40.

UK has the most expensive tuition fees in Europe, if not the world, areas where we are short of skilled workers i.e Health need to have free tuition, as they were until the Tories removed this.

@helford so? It really doesn't impact your life and to be honest given the quality of education it's a small price to pay

When you do buy a house, have a go at living abroad for five years and not paying your mortgage....

That's interesting! I have consistently paid it from my income so maybe you've earned more than me and then tackled the balance whereas I've just not even covered the interest. I'm a teacher.

Seems completely credible to me even with regular payments, because of compounded interest.

For plan 2 loans the interest is currently 7.3%. You need to be earning over 80k to pay off the interest alone. Most graduates on plan 2 are just accruing ever increasing student debt - https://www.bbc.co.uk/news/uk-68534953

The Mummy and Daddy you put down may have actually been sensible and making savings and sacrifices for years to build up a lot for university fees. In order that their children do not have to cope with never ending felt repayments which continue to go up due to interest rates. It's not always rich people who went to university without having to take student loans. You sound very bitter

It totally depends on your career path and earnings. The bigger the delay the between starting education and earning a 'good' wage, the more unlikely you are to pay off your loan. The people I know who have done postgraduate qualifications (and so delayed earning) or who have had career changes are now over 50k in debt (on plan 1) and losing a significant chunk of income to SLC every month while the debt amount keeps growing.

In the olden days, when student loans were new, every penny of pay over a low threshold was taken and loans were paid off within a year or two. Graduates just carried on having the spending power of students for a couple more years rather than having their full salaries. It was much better, in my opinion.
I was automatically paying something like 7.5% and realised it would take years so paid off much higher amounts each month to clear it quickly. Whilst the interest rate was lower than almost any other loan, it was still money being thrown away. So much better to clear it fast if you can.

To fund your children going to uni without either the approximately 9k loan for fees or additional 9k maintenance loan does make you pretty rich compared to the majority of the country.

With regular payments the balance really shouldn’t be 4k more than the initial loan 12 years after graduating on a plan 1 repayment unless it’s only been paid for a tiny handful of years during that time.

I’ve also been on the same plan, on a fairly low to average salary, graduated the same year as the poster and have absolutely made a dent in the balance.

You're right I am bitter. And it depends on your definition of rich. As someone who grew up on the edge of poverty, a family who were able to save up Uni fees for their kids, no matter how big the sacrifices required, are rich.
Making the kids who come from poverty pay more in 'tax' for the rest of their working lives, than the kids who don't, is not OK. It's a scam that penalises unlucky kids, no matter how much potential they have. Its backwards.

That's insane! How many years did you study to get to that amount?
Is that with making repayments too?

If we got rid of university fees it would just decrease the quality of teaching and availability of places.

well off families or families who follow a budget to save for their children would still support their kids in another way (such as helping onto the property ladder leading to lower monthly housing payments).

Unless we became a communist state there isn't any way of avoiding family money impacting quality of life.