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PostPosted: Wed Jan 16, 2019 11:03 am 
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Joined: Fri Mar 02, 2012 9:33 am
Posts: 243
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. :shock: :roll: :shock:

https://www.bbc.co.uk/news/education-46866346


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PostPosted: Wed Jan 16, 2019 11:13 am 
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Joined: Mon Mar 15, 2010 2:45 pm
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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.


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PostPosted: Wed Jan 16, 2019 2:41 pm 
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Joined: Mon May 16, 2011 1:05 pm
Posts: 6797
Location: Reading
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

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


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PostPosted: Wed Jan 16, 2019 5:48 pm 
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Joined: Wed Feb 28, 2007 11:30 am
Posts: 463
Location: Harrow
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..


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PostPosted: Wed Jan 16, 2019 6:07 pm 
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Joined: Tue Jan 22, 2008 6:36 pm
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Location: High Wycombe
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.


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PostPosted: Thu Jan 17, 2019 7:35 am 
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Joined: Tue Mar 04, 2008 2:28 pm
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+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!


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PostPosted: Thu Jan 17, 2019 9:44 am 
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Joined: Tue Feb 12, 2013 12:38 am
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Rich students save by paying fees up front.

https://www.bbc.co.uk/news/amp/education-46866346


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PostPosted: Thu Jan 17, 2019 10:01 am 
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Joined: Mon May 16, 2011 1:05 pm
Posts: 6797
Location: Reading
bridge wrote:
Rich students save by paying fees up front.

https://www.bbc.co.uk/news/amp/education-46866346


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.


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PostPosted: Thu Jan 17, 2019 11:41 am 
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Joined: Sat Sep 27, 2008 9:51 pm
Posts: 2549
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?


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PostPosted: Sat Jan 19, 2019 2:52 pm 
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Joined: Fri Mar 02, 2012 9:33 am
Posts: 243
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.


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