Student loans - loads must get written off??

[SkinnyPete]

Burgmeister said:

someone earning c.£20k today is likely to be earning much more than that in 10-15 years time. Is it therefore likely that they'll just pay the majority of their loan back at the later stages?

Possibly, but still probably better to pay off the mortgage instead.

Anyone know of a simple student loan repayment calculator, rather than doing it manually?

[Phateuk]

Burgmeister said:

Swings and roundabouts.

I went to uni, began in '05 and graduated in '08 with a desmond. 7 years later the loan is almost fully repaid based on monthly PAYE deductions alone.

Once you reach a certain earnings threshold the monthly payments shoot up quite quickly.

someone earning c.£20k today is likely to be earning much more than that in 10-15 years time. Is it therefore likely that they'll just pay the majority of their loan back at the later stages?

I suppose it depends on the field they work in, my salary has virtually doubled since my first post-grad salary, in other professions it seems much more difficult to move up in salaries.

I think these days with such a large cost of going to uni, it's important to check the career prospects following on from the degree (admittedly I didn't and just happened into a decent career). When I went it was the early/mid-2000s period where everyone was advised to go and it was very easy to get onto courses; several people I went to uni with are still earning little more than minimum wage 10 years after graduation..

[cold thursday]

Student Loan Repayment Calculator

http://www.thecompleteuniversityguide.co.uk/studen...

[Sarkmeister]

I graduated in 2004 with around £19k of debt. At the time I did some fag packet maths and managed to work out that I would be around 50 when I paid it off. I'm 34 and have one more £220 payment to make (now by direct debit) then I'm free.

I assume I underestimated my future salary, or made a mistake in the numbers. Either way, I'm happy it's gone, as it'll be like a reasonably sized pay rise....

[rotarymazda]

If you do go over the payment threshold, is there anything stopping you salary sacrificing into pension and then withdrawing it at 55+. (30+ year write-off).

So no repayments, and you can collect the salary you earnt later.

Edited by rotarymazda on Thursday 29th January 08:08

[SkinnyPete]

rotarymazda said:

If you do go over the payment threshold, is there anything stopping you salary sacrificing into pension and then withdrawing it at 55+. (30+ year write-off).

So no repayments, and you can collect the salary you earnt later.

Edited by rotarymazda on Thursday 29th January 08:08

Yes you can do that, in fact I do although not to the extreme of going below the threshold.

[Phateuk]

SkinnyPete said:

rotarymazda said:

If you do go over the payment threshold, is there anything stopping you salary sacrificing into pension and then withdrawing it at 55+. (30+ year write-off).

So no repayments, and you can collect the salary you earnt later.

Edited by rotarymazda on Thursday 29th January 08:08

Yes you can do that, in fact I do although not to the extreme of going below the threshold.

I do that as well, although as above - not to below the threshold.. wouldn't fancy spending my entire working life under £17k or whatever the threshold is

[Type R Tom]

Are you above PAYE? Only reason I ask is that I thought the % they take from you over the min salary was from gross not net pay.

[SkinnyPete]

Type R Tom said:

Are you above PAYE? Only reason I ask is that I thought the % they take from you over the min salary was from gross not net pay.

What do you think happens to your gross salary when you sacrifice it?

[Type R Tom]

SkinnyPete said:

Type R Tom said:

Are you above PAYE? Only reason I ask is that I thought the % they take from you over the min salary was from gross not net pay.

What do you think happens to your gross salary when you sacrifice it?

Not sure what you mean? My tax, NI and pension contributions were the same each whether I paid my loan back or not. Are you saying that by paying more pension, these payments “come first” and therefore you are left with insufficient salary to meet the threshold?

[SkinnyPete]

Yes.

If you sacrifice your salary your student loan repayments are reduced, as is your income tax and NI. In my case I get 100% of my employers NI saving added to my pension pot.

[Mercury00]

My girlfriend's boss is in his mid thirties and she says he isn't paying it because he doesn't earn enough. Problem is he lives in a posh, expensive part of Cumbria and I think they put down that the business makes no money or something like that so his salary is low enough to fly under the radar. I don't know whether it's true, but it's a piss boiler if so. My girlfriend has been left uni maybe six years and is manager of an 'emporium' and she hasn't started paying hers back either. Oh well, at least they had the experience of student life

[Type R Tom]

I didn’t borrow a huge amount, just enough to pay my fees and a bit left over for other costs as I lived at home. I was also “lucky” to get a relatively well-paid job quite quickly after graduating so I paid mine off quite a long time ago, by the end I was paying over £150 per month. What does annoy me slightly are the people who aren’t paying it back, 2 examples within my social group. The first was a girl that did drama degree and then got pregnant not long after graduating and basically hasn’t worked properly since. The second was a mate who did PE degree and then for various reasons has ended up as a baker at ASDA. Both have over £15k worth of debt, both have not paid a penny.

It reminds me of a “left hand right hand” situation; the government sent everyone off to uni and at the same time created a loan system that wasn’t fit for purpose. They must have known this was going to happen. Just seems a bit unfair to me.

[bladerrw]

The funding model for student loans assumes only about 55% of debt will be repaid.

[kiethton]

The bar stewards at the SLC took nearly £500 from me yesterday, the robbing barstewards! Seeing the 55% repayment rate is a bit off when you see s like that being deducted monthly

[MartinQ]

I graduated in 2003 with probably north of 25k. I should have finally paid it off a couple of months ago, but since they only update the balance every April, I've got to keep paying in until then to get it back.

[Welshbeef]

Currently and ever since the inception of student loans its been the cheapest loan you can ever have (ignoring credit card 0% super balance Tfs) so paying the cheapest loan off early seems an uneducated choice.


I can understand the logic if I want it cleared but why rush you pay more...


Mine was paid off years ago but my wife still has a lot - she doesn't work though and really I cannot ever seeing her earning more than the min threshold so it will be written off.


Personally I think all student loans should be grants but needs to pass min entry requirement for he course - even though I had to pay (pre tuition fees era here)

[Type R Tom]

Has the loan system changed with the increase in fees? People must be borrowing a load more now and only 55% paid back that is a huge amount of money being lost

[Welshbeef]

Type R Tom said:

Has the loan system changed with the increase in fees? People must be borrowing a load more now and only 55% paid back that is a huge amount of money being lost

There shouldn't be loans - the system is flawed these people will generate wealth and also maintain/increase the UKs standing at a macro level. Well worth the investment IMHO and tiny numbers in the Budget sense

[Type R Tom]

Welshbeef said:

Type R Tom said:

Has the loan system changed with the increase in fees? People must be borrowing a load more now and only 55% paid back that is a huge amount of money being lost

There shouldn't be loans - the system is flawed these people will generate wealth and also maintain/increase the UKs standing at a macro level. Well worth the investment IMHO and tiny numbers in the Budget sense

Are they? People who go to uni, borrow money and never earn enough to pay it back aren't contributing any more than if they hadn't gone. If anything possibly less as they worked 3 to 5 years less than someone doing the same low paid job from 16, my mate the baker in ASDA is a prime example. That's probably a different debate though.