Another stupid student.

[Mottie]

Student loans: 'I borrowed £44,000 for university and now owe £54,000'

The new repayment rate for student loans started this month but for some graduates the debt pile keeps growing.

www.bbc.co.uk

Did a degree in economics and works in finance but couldn’t work out what he would be paying back and how much the loan would cost. Phhfftt!

Perhaps the first thing all these university students should be taught no matter what degree they are taking is how much their loan will cost them to pay back so that it won’t come as a shock to them?

 

[Jurassicspark]

A degree in economics and can't solve how much he's got left to pay? Pah! That is some scarcity.

 

[carmanmemoranda]

Shame you misread what the article actually gets at.....



That's because he is one of thousands of graduates in England and Wales who took out a type of student loan between 2012 and 2023 on which interest rates hit a record of nearly 8% earlier this year.

At the beginning of this month, interest was set at a lower level for the coming year. But at 7.3%, it remains comparatively high by historic standards.

Adam, 26, studied in London for a BSc in economics and took out his student loan in 2016.

He now works in finance in the capital and, because he earns a decent salary, Adam has been repaying his student loan for some time.

But the interest he is charged on his loan far outstrips the money he pays back every month.

“I personally think it is a bit ridiculous that four, five years on from graduation I can’t even meet the interest on my debt," he told the BBC.

"It is still going up, month to month.”

 

[opps]

I was lucky that my student loan was effectively interest free. We didn't have tuition fees and the loans were supposed to supplement the frozen maintenance grants. I didn't have to pay back anything until my earnings hit 75% of the national average. Once I did so, they set up the repayment schedule. Years later, after my final direct debit payment, I got a letter from them saying that I owe them a single penny. I phoned them up and asked if they really needed me to pay 1p. The guy on the phone told me that the account cannot be closed until I do so. I explained that the cost of the letter and my phone call means that it is costing them significantly more than my outstanding debt. He agreed. I had to go to my bank and write a check for a penny. The bank staff gave me one of those looks.

 

[crystal ball]

I was lucky that my student loan was effectively interest free. We didn't have tuition fees and the loans were supposed to supplement the frozen maintenance grants. I didn't have to pay back anything until my earnings hit 75% of the national average. Once I did so, they set up the repayment schedule. Years later, after my final direct debit payment, I got a letter from them saying that I owe them a single penny. I phoned them up and asked if they really needed me to pay 1p. The guy on the phone told me that the account cannot be closed until I do so. I explained that the cost of the letter and my phone call means that it is costing them significantly more than my outstanding debt. He agreed. I had to go to my bank and write a check for a penny. The bank staff gave me one of those looks.

I had a red letter from BT years ago demanding a penny I taped a penny on the remittance and sent it back

 

[Notch7]

Perhaps the first thing

Perhaps the first thing Mottie should do is go and do a comprehension course

What is the point of posting something that has no bearing on the article you’ve linked.

 

[gas112]

an economics degree and he doesnt understand that his payments are not enough to cover the interest thus the amount he owes goes up instead of down .
Simple increase his monthly payments above the interest rate nothing stopping him paying more than they ask for
Hopefully he doesnt have a credit card and justs pays the minimum amount requested otherwise there will be another article about him owing far more than he spent

 

[opps]

From the money saving expert site:

- Student loan & interest: £20,000. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.
https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/
- Student loan & interest: £50,000. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.
https://www.moneysavingexpert.com/students/repay-post-2012-student-loan/
- To get silly to prove a point: student loan & interest: £1 billion. Your earnings: £37,295.
As you repay 9% of everything above £27,295 your annual repayment is £900.

I think it is fair to say that the people that thought of the scheme are the numerically challenged ones, rather than the students. Student loans are wiped 30 years after leaving uni, in the above scenario, 30x£900= £27,000, and that is assuming that the graduate starts repaying the year that they graduate. And yes, I am ignoring RPI rises and compound interest. Oh, I did study a joint majors in Economics and Geography.

 

[opps]

an economics degree and he doesnt understand that his payments are not enough to cover the interest thus the amount he owes goes up instead of down .
Simple increase his monthly payments above the interest rate nothing stopping him paying more than they ask for
Hopefully he doesnt have a credit card and justs pays the minimum amount requested otherwise there will be another article about him owing far more than he spent

From Gov.uk

You can choose to make extra repayments towards your student loan. These are in addition to the repayments you must make when your income is over the threshold amount for your repayment plan. There’s no penalty if you make extra repayments.
https://www.gov.uk/repaying-your-student-loan/make-extra-repayments
You cannot get a refund of any extra repayments you make.
You might not benefit from making extra repayments because your loan will be written off at the end of the loan term.

Depending on his income, he may be wiser to NOT top up his payments. I suspect that the point he was making might have been the absurdity of the repayment system.

 

[gas112]

From Gov.uk

You can choose to make extra repayments towards your student loan. These are in addition to the repayments you must make when your income is over the threshold amount for your repayment plan. There’s no penalty if you make extra repayments.
https://www.gov.uk/repaying-your-student-loan/make-extra-repayments
You cannot get a refund of any extra repayments you make.
You might not benefit from making extra repayments because your loan will be written off at the end of the loan term.

Depending on his income, he may be wiser to NOT top up his payments. I suspect that the point he was making might have been the absurdity of the repayment system.

Yep 25 years before it's written off in the mean time having to declare a debt of tens and tens of thousands of pounds effecting his credit score and possibility of getting a mortgage or other loans etc etc

 

[Brigadier]

Yep 25 years before it's written off in the mean time having to declare a debt of tens and tens of thousands of pounds effecting his credit score and possibility of getting a mortgage or other loans etc etc

Except they don't.

Student loans do not appear on credit scores.

8 things you should know about your student loan

8 things you might not know about your student loan, but definitely should.

www.gov.uk

Although your "affordability quotient" may be affected by the student loan (when calculating what you can borrow).

 

[Notch7]

an economics degree and he doesnt understand that his payments are not enough to cover the interest thus the amount he owes goes up instead of down .

where does it state he didnt understand?

 

[opps]

Yep 25 years before it's written off in the mean time having to declare a debt of tens and tens of thousands of pounds effecting his credit score and possibility of getting a mortgage or other loans etc etc

As someone that went to uni and has spent most of my life decorating, I honestly don't understand the (seeming) animosity towards students that are currently paying towards their degree. After my A'levels I spent about 6 months as a lift engineer's mate. I took a year out after my first year of uni because of glandular fever. I worked for a cabinet maker for 8 months.

I am however going to be forever indebted to my uni/poly because they taught me how to question things and how to learn independently. My first semester, we had to read the likes of Plato/Socrates, Adam Smith and Machiavelli. Initially I didn't understand why (then), now in the world of social media, it makes perfect sense. I was taught how to fact check. If I read something that doesn't seem believable, I will spend significant time trying to verify those claims.

In no way am I suggesting that you do that, but as wider general point, many people seem to simply want to believe whatever fits their rhetoric and will blindly repeat what they see in their social media bubble. It really does worry me (regardless of their political slant).

 

[ellal]

As someone that went to uni and has spent most of my life decorating, I honestly don't understand the (seeming) animosity towards students that are currently paying towards their degree.

I do...

It's mainly spouted by those too thick to attend, and who hate it when others get an opportunity that they couldn't achieve...

And being thick, the same people don't understand that students can't possibly fully understand the repayments in detail because the goalposts are being constantly changed...

It would be cheaper for the taxpayer to have free tuition fees, but then we get the 'why should we pay for them' argument...

I guess they don't wish to pay for the teachers, doctors, nurses etc that they rely upon

 

[gas112]

Except they don't.

Student loans do not appear on credit scores.

8 things you should know about your student loan

8 things you might not know about your student loan, but definitely should.

www.gov.uk

Although your "affordability quotient" may be affected by the student loan (when calculating what you can borrow).

So it still could effect what they are able to borrow for the next 25 years ,