Question about student loans

[tammybear]

This is more for my dp's behalf, so if you could help out, we both really appreciate it. Dp has had applied for student loans for the three years of his degree which altogether about £3500-4000. How long do they expect you to have to pay off the loan, and does it have to be a certain amount? Dp only works part time at the moment and is suppose to do his third year next year but is worrying he cant afford to pay it all back, as he was told that £10 a month will be added on until it was all paid back. Any advice from other students who have student loans? Thanks xxxxx

If it is a student loan which he applied for through his LEA from student finace direct, or whatever they are called now, he wont have to pay any back until he is earning over a certain amount. It will be deducted from his pay by his employer and passed on to the Inland revenue.

Interest on the student loan is kept in line with inflation. think that means that they work out the rate of inflation each year and that is the amount of interest you pay. I'm very bad and haven't kept my statements but the interest on my loan is nowhere near £10 a month. It's probably not even £10 a year

At the moment the threshold for starting repayments is £10,000. so if your dp is earning less than that he wont have to start paying back his loan. Even if he was earning £20,000 he would only have to pay back £75 a month.

But if your dp's loan is from a bank or something like that ignore everything I said, the interest could be much higher and I don't know when he would have to pay it back.

Not much help am I?

It was student finance direct he got it from, and he only works 12 hours a week and gets about £50 a week! Hes really annoyed about this letter he got about the £10 a week interest, which is why Im asking for him, because as we both understood it, he didnt have to start paying it back til he was finished with his degree and at work.

the £10,000 figure might not be right actually, think that was from last year. but this is what the repayments were last year anyway

income up to £10,000, monthly repayment 0
£11,000, monthly repayment £7
£12,000, £15
£15,000, £37
£17,000, £52
£20,000, £75

but do they still add interest on whether you can pay it back or not?

i'm sure he shouldn't have to pay it back until he's left uni and is working full time. Who was the letter from, that's really strange.

interest gets added on as soon as the loan is paid to you and keeps getting added until you pay the whole thing off. So he will be being charged interest already but its really not very much.

well he thought it was suppose to be basically interest free (not putting much on) but this letter says other wise. have asked who it is from as he didnt say, so will let u know when he tells me.

quite confused now, say you only earn up to £10,000pa for the rest of your life, does that mean you never have to pay off your loan?? {confused looking emoticon}

Yep - if you constantly earned less than the threshold for repayment, you could feasibly (and legally) never pay it back.

Really? thanks for that joash

beansmum - did you get your loan from SFD? and how much interest are you getting put on yours? xxx

yep, got my loan from SFD. I will have to go and search for my statements, then will let you know how much interest I've been charged. The interest rate is the same as the rate of inflation so I suppose I could work it out but it's my day off, no maths today!

Your dp should have had statements sent each year telling him exactly how much interest has been added.

did you find out where that letter about the £10 came from?

I have been searching everywhere but cant find my statements, I've had my sister searching for hers too but she's about as organised as me!

I will keep looking but I think the interest is about 2-3% added daily. I could be completely wrong though.

Thank you so much beansmum. Dp is busy at the moment so I can't find out where the letter came from. Will let you know when I do. Thanks again. xxxx

it was from SFD beansmum. it said its about £8 something he'll be charged

i'm really stupid! £8 per month is about 2.5% of £4000 so thats right, for some reason my head was working in 100's not 1000's and I got all confused. sorry.

But your dp definitely wont have to pay any back until he's earning enough to be able to afford it. Hope i didn't confuse you as much as I confused myself!

feel really embarrassed now!

oh dont worry about it beansmum! i do it all the time So that sounds about right then?

yep - sounds about right. i know it sounds like loads but I wouldn't worry about it, your dp wont have to pay anything back until he can afford it.

i'm going to have a lovely £18,000 loan to pay back when I'm finished and I'm not worried at all!

glad you're not but dp on the other hand is going on about he cant do his third year as he'll be in so much debt! he can be such a drama queen sometimes (dont tell him i said that! )

thanks beansmum, u been a great help!