University fees interest

[bumblebee61]

My daughter has just told me that she is being charged£200 interest a month on her University fees debt. She graduated a year ago. How on earth can this be right? She earns minimum wage and struggles to survive. She can't pay back the fees as she isn't earning enough yet, but is being charge all this interest. How can she ever climb out of this horrendous debt? I am so upset.

Sounds about right - it's 6% and I assume she's got a £40,000 loan.

Why are you upset? It's not like she HAS to pay any more than the standard repayments - which are zero if she doesn't earn enough.

Was that not all explained to you when DD took out the loan?

It's 6% isn't it. Extortionate when you consider they're sold as 'cheap' loans

Oh yes and it starts from day 1. Lots of people don't know before taking out the loan.

While she's on the minimum wage she doesn't have to pay the interest or the loan.

I took out student finance for my undergraduate, PGCE and postgraduate. If they ever offer student finance for PhDs then I'd take that too. I value my education very highly, but I unfortunately was not born into a family who could ever afford uni fees.

I can't imagine my loan will ever be repaid in full on what I earn. Nothing I can do about it, so there's no point in worrying.

It's disgraceful how high the Interest rate is , considering bank rate is 0.5% and the fact it's charged from day one.

It obviously become a money making scheme rather than to cover costs of uni.

It's a stupid system which doesn't work as very few people will ever pay the money back. I only now at 29 earn enough to pay off the interest I get charged every month, so my debt isn't going down at all. Add to that the fact that I have just had a baby and am likely to go back, and stay, part time means I will drop below the amount where I pay any back at all again.

Having said that it hasn't held me back anywhere in life, mortgage, car finance etc and I wouldn't have the job I have now without a degree, so I don't let it bother me.

However big the loan is or the interest makesno difference to how much she has to pay.
If she earns less than£23000 she has zero to pay back.