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?!

Yes it was, plus the maintenance loan, plus all the interest accruing

I've been paying a plan 2 loan at the same time. this has affected it as it's a combined payment.
I also pay a postgrad payment but that's an additional one

@Mindymomo well after 65 password resets, you are right. Thank you. However, I am now super pissed off that the debt agency they sent my overpayment to, that has taken £10 a month for the past six years, has only been recorded as £5 a month. I have no record of who this company is or how much I'm meant to still owe through them, as I'm still making other payments the usual way. Don't understand a thing.

I'm in a similar boat with a Plan 1 loan (post 2006) and a Plan 2 loan. Do you know if the plan 1 aspect still gets written off after 25 years or are we essentially waiting the full 30 years after Plan 2 kicks in to write it all off? My two loans are a good few years apart so I'm really hoping it doesn't go from 30 years from Plan 2.

No I think the plan after 2006 1 is done after 25 years from first payment and the plan 2 is 30 years after the first payment.

And now it’s 40 years from first payment. The fact that it’s from first payment is something people forget too. Now that there is no retirement age this could mean people repaying for literally their whole working lives and certainly means more will be paid off. Even if you don’t hit the threshold until you are 30 you could still have 40 years of payments

I graduated 2008 and pay back £160, so presumably earn in the same region as you. I borrowed £18k and will be making my final payment this month. Your problem isn’t the loan, it’s the fact that you moved abroad for 5 years and took time out for maternity. Those were choices you made.

This is on you though. You knew you had a loan even knowing a low interest rate and chose not to keep track of it. The Student Loans Company send annual statements to whatever address you registered with, again it's on you if you haven't updated that information.

As for whether you should pay it back if you own £11k now presumably you took out £9k, it hasn't increased massively are you likely to ever be a high earner? If so just pay it back before it increases or put the money in an account that is higher than 4.5% and use the interest to pay it off or similar. Or take a bank loan out (you won't find one aslow as 4%) and pay it off with that and then pay that loan back which seems pretty daft to me but may suit you.

My loan is somewhere near £35k as I have Plan 1 and 2, I earn £32k, and unlikely to ever pay it all back so don't worry about it. I'm mortgage free already as I bought a small flat so I'm not concerned with the payments being taken into consideration for a mortgage.

Exactly. The change between Plan 4 and Plan 5 of extending the repayment period and lowering the starting threshold meant they effectively doubled the average/typical cost to graduates and hardly anybody noticed.

The Student Loans Company send annual statements to whatever address you registered with, again it's on you if you haven't updated that information.

They haven't done this for years, the statements aren't even in my online account. The only thing I'm able to do is log in to get my overall balance. There's no transparency for me in terms of what has been added in interest or taken out.

When you log in online it doesn't just give you the total amount, it tells you the interest and the payments.

It's a badly designed website but it's definitely there as I saw mine yesterday (I checked it off the back of this thread)

@DancingPhantomsOnTheTerrace thanks, I'll take another look, last time I checked there was a repository for letters and statements but it was blank.

Mine only tells me repayments for this year. No statements on there since 2016.

Were you earning when you lived abroad for five years? If you were then you were contractually obliged to inform them and keep paying. Hopefully they won’t take legal action against you for not doing that, but they certainly do often.

Your five years abroad is part of the issue. This is a loan, with interest, which obviously compounds over time. You stopped paying it at all for five years, and now you’re surprised how much you owe? What do you think would happen to a credit card or bank loan if you did that!

If you want to work out the actual figures to tell whether you’re better to pay it off or keep paying the minimum, you might find the moneysavingexpert forums helpful. Just don’t tell them about having not repaid when abroad.

Just logged in and I do have statements now! Also under finally £10k 🥳