Student loans.

[FlorinCollector]

So i've had mixed opinions from family and friends on this. Im in 4th year of uni and I have managed not to take a loan for this is my last year. However my first three years i did. Total student loan debt =£14,500. I phoned up and set the account up the other day to check balance and have put £25 already into it and am trying to put a fiver a day to it. However should you pay this kind of debt off early? One of my friends who went to get a car said they didnt even take student loans into consideration of debt. If you have any advice on if it is worth paying off early id appreciate your input.

thanks

Joseph.

[BackyardBullion]

8 minutes ago, JCRJM said:

So i've had mixed opinions from family and friends on this. Im in 4th year of uni and I have managed not to take a loan for this is my last year. However my first three years i did. Total student loan debt =£14,500. I phoned up and set the account up the other day to check balance and have put £25 already into it and am trying to put a fiver a day to it. However should you pay this kind of debt off early? One of my friends who went to get a car said they didnt even take student loans into consideration of debt. If you have any advice on if it is worth paying off early id appreciate your input.

thanks

Joseph.

Joseph - in my opinion a student loan is not debt. This will be different for different peoples opinion and I respect that.

But for me as this is not a debt that can ever be "called in" or you can have your house or property seized it really isn't a debt. You pay it back when you earn and when you earn only over a certain threshold (I forget now). 

I hear people moaning that they will never be able to pay off their student debt - that is a good thing in some ways - it means it will never need to be paid. But for people who do earn lots in their lives it is paid off and paid off much quicker.

I have heard friends moan about their student loan repayments when they start earning good money. A friend of mine is a very successful recruitment consultant and for the first few years out of Uni he was earning about £50k and moaning every month about his student loans...I simply had to remind him that if he was earning £18k a year and not paying anything on his loan he would have considerably less money in his pocket. This was all about 10 years out he now earns big bucks in the city and that student loan is long gone. 

For him though he couldn't look after his money so he would spend it when he got it and the loan payments would just come out of his paycheck. 

If you were earning that kind of money early on out of Uni then it would probably be best to pay it off sooner so that you dont lose so much on interest. 

Having said that you will probably not get a cheaper loan for the rest of your life so it might be worth holding onto the capital as you earn so as so save for a deposit on some property. 

Hope that helped - I think I rambled on for a bit there...

Bottom line - it is not debt as you dont technically have to ever pay it back. If you earn lots of money in a well paid job, probably worth paying it off early or if you are wanting to keep the cash for a rainy day or for a deposit on a house keep it. 

 

 

[FlorinCollector]

1 minute ago, BackyardBullion said:

Joseph - in my opinion a student loan is not debt. This will be different for different peoples opinion and I respect that.

But for me as this is not a debt that can ever be "called in" or you can have your house or property seized it really isn't a debt. You pay it back when you earn and when you earn only over a certain threshold (I forget now). 

I hear people moaning that they will never be able to pay off their student debt - that is a good thing in some ways - it means it will never need to be paid. But for people who do earn lots in their lives it is paid off and paid off much quicker.

I have heard friends moan about their student loan repayments when they start earning good money. A friend of mine is a very successful recruitment consultant and for the first few years out of Uni he was earning about £50k and moaning every month about his student loans...I simply had to remind him that if he was earning £18k a year and not paying anything on his loan he would have considerably less money in his pocket. This was all about 10 years out he now earns big bucks in the city and that student loan is long gone. 

For him though he couldn't look after his money so he would spend it when he got it and the loan payments would just come out of his paycheck. 

If you were earning that kind of money early on out of Uni then it would probably be best to pay it off sooner so that you dont lose so much on interest. 

Having said that you will probably not get a cheaper loan for the rest of your life so it might be worth holding onto the capital as you earn so as so save for a deposit on some property. 

Hope that helped - I think I rambled on for a bit there...

Bottom line - it is not debt as you dont technically have to ever pay it back. If you earn lots of money in a well paid job, probably worth paying it off early or if you are wanting to keep the cash for a rainy day or for a deposit on a house keep it. 

 

 

Thanks for that mate. Yeh thats what i was trying to understand if it is really classed as debt or not. In that case if i have some spare money at the end of the month ill put to it but i will also stop worrying about it. 

[BackyardBullion]

1 minute ago, JCRJM said:

Thanks for that mate. Yeh thats what i was trying to understand if it is really classed as debt or not. In that case if i have some spare money at the end of the month ill put to it but i will also stop worrying about it. 

Remember I am not a financial adviser...best to also get proper advice perhaps from the Student Loans Company too 

[FlorinCollector]

Just now, BackyardBullion said:

Remember I am not a financial adviser...best to also get proper advice perhaps from the Student Loans Company too 

Yeh when i told the guy on the phone i was still at uni and wanting to pay it back he sounded confused a bit. He was telling me you dont start paying back till a year after you graduate. As I do product design at uni still not too sure on how great the chance of a job in that industry is. 

[Oldun]

http://www.moneysavingexpert.com/students/student-loans-tuition-fees-changes

[breaktwister]

You are in right track with wanting to keep debts low, but really the only time you should be thinking of paying a student loan off early is when you are earning double the average salary (meaning you will likely have to pay off the loan fully at some point) and when you cannot find any other investments with an ROI greater than the rate of interest on your student loan.

 

[valentsilver]

On 25/09/2017 at 15:14, BackyardBullion said:

Joseph - in my opinion a student loan is not debt. This will be different for different peoples opinion and I respect that.

But for me as this is not a debt that can ever be "called in" or you can have your house or property seized it really isn't a debt. You pay it back when you earn and when you earn only over a certain threshold (I forget now). 

I hear people moaning that they will never be able to pay off their student debt - that is a good thing in some ways - it means it will never need to be paid. But for people who do earn lots in their lives it is paid off and paid off much quicker.

I have heard friends moan about their student loan repayments when they start earning good money. A friend of mine is a very successful recruitment consultant and for the first few years out of Uni he was earning about £50k and moaning every month about his student loans...I simply had to remind him that if he was earning £18k a year and not paying anything on his loan he would have considerably less money in his pocket. This was all about 10 years out he now earns big bucks in the city and that student loan is long gone. 

For him though he couldn't look after his money so he would spend it when he got it and the loan payments would just come out of his paycheck. 

If you were earning that kind of money early on out of Uni then it would probably be best to pay it off sooner so that you dont lose so much on interest. 

Having said that you will probably not get a cheaper loan for the rest of your life so it might be worth holding onto the capital as you earn so as so save for a deposit on some property. 

Hope that helped - I think I rambled on for a bit there...

Bottom line - it is not debt as you dont technically have to ever pay it back. If you earn lots of money in a well paid job, probably worth paying it off early or if you are wanting to keep the cash for a rainy day or for a deposit on a house keep it. 

 

 

good advice, great point there ! 

[Markh]

Money loaned is a debt. What if they  change  the policy / amended the T/C. I'm not saying they will, just could. It's obviously already making you mindful that's it's there... paying it down would be peace of mind.

[ilovesilverireallydo]

On 25/09/2017 at 16:08, breaktwister said:

You are in right track with wanting to keep debts low, but really the only time you should be thinking of paying a student loan off early is when you are earning double the average salary (meaning you will likely have to pay off the loan fully at some point) and when you cannot find any other investments with an ROI greater than the rate of interest on your student loan.

 

Extra vote on this. 

[FlorinCollector]

I have currently put a direct debit of £10 a month and if i have spare money i put to it as well so not much but as i am in my final year at uni i will up it afterwards. so slowly getting there but it is my only debt so will try to get it off as soon as possible. since saving in precious metals my spending money has reduced significantly

[TheByzantine]

[TheByzantine]

also, for your student loan to be so low I assume you studied in Scotland? Having done 3 years in england for my Undergrad I ended up with essentially £30k, yet I wholeheartedly agree with backyard on this. Also no financing company ever takes student loan into the equasion, thankfully.

[FlorinCollector]

Just now, TheByzantine said:

also, for your student loan to be so low I assume you studied in Scotland? Having done 3 years in england for my Undergrad I ended up with essentially £30k, yet I wholeheartedly agree with backyard on this. Also no financing company ever takes student loan into the equasion, thankfully.

Yeh in Scotland if i had to pay for the actual course i doubt i would have been able to go. Saying that after the 4 years i dont feel it will have been worth going but who knows will find out soon.

[SharpMind]

On 13/11/2017 at 23:53, JosephM said:

Yeh in Scotland if i had to pay for the actual course i doubt i would have been able to go. Saying that after the 4 years i dont feel it will have been worth going but who knows will find out soon.

to be honest I hate the moment I decided to take a student loan as recently I had to pay it off and I missed the money... Lol, if I knew 4 years ago that I would have such a situation I would never take the loan.. Just imagine - I had to take another loan to pay off my student loan or I would get into great troubles... But thank heaven I found these (Letfinance) that provided me the loan that was enough to pay off student loan that I found on the site with a lot of examples of loan companies https://credit-10.com/dk/kviklan/ . By the way, now I am free of loans as I was able to pay off that loan too (I am really thankful to God/Heavens or any supernatural thing that helped me take the loan from those guys)

[Tn21]

Uni was a huge mistake for me, If I could do things again I would not go and instead go straight into employment. Lots of great opportunities are now available for youngsters. 

Student loans has been on my mind recently aswell,  the likely hood of the loan not being repaid is slim. Unless you sit at home and do nothing. As it stands they are taking money from my wages which I'm totally fine with. 

Last year I paid back around about £300+ however that was enough to cover the interest on the loan and reduce the amount by the smallest amount. 

Midway though my working life and slightly behind on my dreams and goals I will be actively trying to reduce my student loan debt and not just meet the interest repayments. 

 

[FlorinCollector]

@Tn21 i agree i think the newer style loans are more than likely going to be paid back within your working life. I have watched a lot of videos about it and im more relaxed about the repaying it early. 

Currently off my wages im paying £100 a month. 

[vand]

Realistically a student loan is like an very low rate interest-only mortgage with infinite rollover that is only triggered when your earnings reach a certain level, at least with inflation as it is right now.

It's still debt, albeit debt that is loaned on very favourable terms.

I think the payback policy on this is a good one. Higher education is a pathway to enhanced career earnings, but the earnings threshold acts as a safety net for those who are never able to realise a that goal, protecting workers while they are in low pay. 

Whether or not you pay it all off or not will depend on the success of your career, as well as your attitude to debt. Mathematically there is a strong argument against paying it off at the slowest possible rate, but from a behavioral point of view and instilling good financial discipline I think there is a case to have a plan to pay it off a bit faster.

[Pipers]

RPI (2% lets say) plus 2.4% on a quick sum it doubles every 13 years.  The Rothchilds are not in it for the students.  Also you cannot discharge the student loan debt through bankrupcy

https://www.citizensadvice.org.uk/debt-and-money/debt-solutions/bankruptcy-2/bankruptcy-explained/bankruptcy-overview/

Going to Uni should be an education decision with career in mind.  IMO it would be a waste of time going to University if the course you were taking was going to give you poor financial returns in the long run.  If you look at the Universities as busineses instead of givers of education then you will start to see a different story.

Ask yourself this, you leave Uni and the only job you can get is a low paid job.  Fine you say i don't have to pay the loan back, then after 10 year you get a promotion or you start your own business things go well the loan debt has doubled!  The Government has changed the law as most people will never make the payments so now the Government have pushed the maximum time to pay the debt back to 40 years!  Its now RPI plus 4%, the money you are paying for the student loan could be spent on your pension or on a nicer home!!

OH but Martins Money Says its alright!!!!