University Offers coming in....time to apply for finance

[topsyturvy]

The university offers are coming in, DC's have worked hard to get these, and now meeting the offers will be the challenge.

But the scary part of student finance and the interest rates they will be charged is a worry.

Saw this news, could not believe they will be charged 6.4% for student loan, or maybe more as inflation rises. Feeling worried for the next generation.

https://www.bbc.co.uk/news/education-46866346" onclick="window.open(this.href);return false;

[scary mum]

You probably need to read Martin Lewis on the subject.
Yes, the interest rate is ridiculous, and starts from the moment they start their course. However, it helps to think of it as a graduate tax.

[Tinkers]

I saw a newspaper article following the BBC article the other day, but had to find it again.

https://www.mirror.co.uk/money/rich-stu ... s-13857859" onclick="window.open(this.href);return false;

This explains (with figures) why paying upfront is basically not a good idea. (Martin Lewis contributed to this as well.)

[SteveDH]

My DD has just finished uni... well finished last July
She has a debt of 60k
if I plug her wages etc into this

https://www.student-loan-calculator.co.uk/

she will pay back a total of 36k

so at present no point making extra payments etc, unless it looks like her wages will rise faster then the predictions.

at the end she has a debt of 140k.. so that bit is scary..

[MrsChubbs]

Def look at Martin's info. Now it has been added to national debt it is likely to get reviewed but probably not in time for most our DCs.

[KB]

+1
Please, please look at it as a graduate tax and not a debt.
There's a clip of ML on Question Time having quite a rant at politicians who deliberately misrepresentvthe student finance situation for their own ends.
Thinking and talking about it as debt can put some young people off going or encourage parents to pay fees out of savings. Its possible in a few cases this might not be the wrong choice but anyone thinking along these lines should do much reseach and definitely look at what ML has to say!

[bridge]

Rich students save by paying fees up front.

https://www.bbc.co.uk/news/amp/education-46866346" onclick="window.open(this.href);return false;

[Tinkers]

Rich students save by paying fees up front.

https://www.bbc.co.uk/news/amp/education-46866346" onclick="window.open(this.href);return false;

They only think they save money. They don’t usually tbh (unless they are vey exceptionally highly paid when they graduate) and if they do the sum they would see why.

[mike1880]

85% of current students will not repay their loan.

The current system is basically a way for the government to force taxpayers to hand over cash to the government's friends:

1) Government hands taxpayers' money to university.
2) Government tells student they now owe the government £60,000.
3) Government sells the debt to the government's friends for a knockdown price.
4) Government's friends collect 10% of former student's earnings over £20k(ish) for the next 30 years.

So at the end of the day the taxpayer is still funding the university system, just as they always have, while the government's friends have a lucrative, reliable income stream for the foreseeable future. Who wouldn't want to be a friend of the government?

[topsyturvy]

Thank you for all the useful information.

My questions is if one looks at this loan as tax, then if a student does well, can he or she pay it quickly rather than paying it over 20 years time.

As a loan of 6.4% (with possibility of going up), if a student ends up making more contribution in the initial years can close this payment early than taking it to 21-27years (as per money supermarket guy)

Ofcourse, assuming the job they will get will be the upper threshold where they will need to pay.