Student loans - loads must get written off??

[dave123456]

I guess there were a few years of large loans financing rather meagre qualifications. don't know much about it now however one would assume the increased cost of the actual education will focus the borrowing a little more on what it should actually be financing now - seems a fair amount of debt was merely 3 years rather excessive living without a job for a fair number.

[Sheepshanks]

Welshbeef said:

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.

errr...read your previous post again. The bit about your missus.

[Eddw86]

Just to balance it out myself and the majority of my social circle who went to university will have paid back the student loan well before the term ends - I personally graduated in 2009 with £19k, likely to have it all paid off at 30. I imagine careers or areas of the country where salaries are low will struggle though and whilst it's frustrating knowing the Govt effectively set up a system to only return 55% I personally wouldn't have the salary and life I have now without going to university.

Never saw any point in overpaying and wherever I've worked they've deducted it automatically. Can't wait until it is paid off as it will be the equivalent of a decent pay rise in my net pay!

[Cyder]

I graduated in 2010 with around £20k of debt and went straight into a job. I reckon another 4-5 years and I'll have it paid off and I'll certainly be happy to have a few extra quid to play with!

However I'm relatively lucky to be earning a reasonable salary with plenty of overtime to inctease my monthly payments. It must be tough for those leaving uni and getting into roles paying low £20k's with no room for progression as some of my mates did.

[romeogolf]

An awful lot of hearsay and rumour abounding on here.

1) It's the responsibility of the employee, not the employer, to declare they have a student loan. Once they have done this it is the responsibility of the employer to declare/deduct the loan. If you are not repaying the loan and get caught there's a fine involved, unless you have evidence to show that you informed your employer of the loan and that they did not make the relevant changes.

2) The system has been designed for around half of all loans to be repaid. This is not a flaw or a design error. It was considered the fairest way of funding the education, and subsidising it for those who cannot afford it. Nothing is paid up front to allow those from less wealthy backgrounds to attend. Repayments are only made once the student is earning enough to warrant them.

3) The loan does not count as a debt and does not show on a credit report. The only time it would be considered for a credit application is the terms of a mortgage when the lender considers all income vs all out going. As the loan is an expense which cannot be avoided it is included as an outgoing in the same way as childcare costs etc. It is not considered an outstanding debt.

[b0rk]

Mercury00 said:

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

A company director can take dividend and not pay income tax if they have a good tax accountant. The basic rouse is to pay yourself just below your personal allowance then take difference upto the higher rate tax band as dividend, this could be the equivalent of a £55k PAYE salary.

[Sheepshanks]

b0rk said:

Mercury00 said:

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

A company director can take dividend and not pay income tax if they have a good tax accountant. The basic rouse is to pay yourself just below your personal allowance then take difference upto the higher rate tax band as dividend, this could be the equivalent of a £55k PAYE salary.

Dividend income counts for student loans though.

How much money the business makes isn't necessarily connected to how much his income is.

Some small business owners seem to like bullst about what they're getting away with, when in reality behind the scenes their accountant is keeping them legal.

[Tiggsy]

as above, a director taking divs won't avoid student loan payments....and his div's are still on taxed company profits. So there's an NI saving but its not the "he's getting away with no tax" situation people think.