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    (Original post by vincrows)
    It's beyond my ageing brain and English being my second language.
    I'll let much more clever people explain it. Please read this.

    http://www.ifs.org.uk/comms/r94.pdf
    Why are you linking this. It is basic economics that interest above inflation will result in a profit. Admin fees are a result of the (poor) way they have gone about devising the student loan plan.

    The interest rate they charge is greater than the internal rate of return, aka government are profiteering.

    How did they ever manage under the terms of the pre-2012./ syatem of inflation only charges?
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    (Original post by vincrows)
    It's beyond my ageing brain and English being my second language.
    I'll let much more clever people explain it. Please read this.

    http://www.ifs.org.uk/comms/r94.pdf
    Jneill will explain how much it takes to make me open links

    What is your first language?!
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    (Original post by jneill)
    What happens if RPI goes up? Eg to 12% or more. Which is very possible and has happened in the recent past. It was over 25% in the 70s.

    The rate needs to be RPI linked, plus an amount for administration and to cover bad debts (there will be a lot of unpaid loans). That becomes a significant rate, but still not actually profitable.

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    Then that is an issue of the way they have structured student loans for them to require that much interest.

    The big issue is they've tripled fees yet countered this by raising the entry principal to 21k, so while the unis are seeing the same amount of money, the government see more debt which they're trying to secure with unfair interest rates (for a student loan)
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    (Original post by L'Evil Fish)
    That's why I said a calculated amount to make a fair figure. 5 year period intervals or something, I don't like the idea of it just building and building from first term (when you can't even start to pay it back realistically) at a topped up rate.

    If there are so many unpaid loans, then they need to restructure it all someway. What's the point in going to university if you can't get a job.

    We need to create jobs, and get people in them. And not manual labour, high skill trades that university provides. It seems people do pointless degrees and find themselves with no jobs.

    I still think different degrees should cost different amounts, or receive certain amounts of funding to study some. This isn't really popular but I think it fair, problem is how a valuation is made on the degree type
    I agree, particularly the variable cost of different degrees. In fact the idea was only top unis would charge the top rate but the ex-polys didn't play along.

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    (Original post by jneill)
    I agree, particularly the variable cost of different degrees. In fact the idea was only top unis would charge the top rate but the ex-polys didn't play along.

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    I suppose that makes sense, but I was thinking more the degree than where you study it.

    Although it would all come into play.

    Put them into bands I say.

    Specialist degrees (engineering, law, medicine, architecture, accounting)
    Broad general degrees (English, History, languages)

    Then the useless things like Harry Potter studies, golf management etc

    And sub bands maybe

    Although one could argue the specialist degrees should cost more, as they'll be able to pay it back. As opposed to my thinking of they should cost less because we need them more
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    (Original post by Goods)
    I will have a debt of ~50k after my 4 years. That will generate 2500 of interest a year. Thats not what I would think of as cheap debt...

    I just checked and I already owe 260 pounds worth of interest on what I've borrowed...


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    Wtf, that's ridiculous

    :sigh:

    Do you mind me asking how much you took out?
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    (Original post by L'Evil Fish)
    Wtf, that's ridiculous

    :sigh:

    Do you mind me asking how much you took out?
    9000 + 3610


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    (Original post by Goods)
    9000 + 3610


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    You will have taken a debt of £50.4k but once you finish your degree you will owe £57.8k... thats just the interest accrued while at uni (assuming inflation doesn't rise, which it will by Q2, 2016 so you will owe even more, but then thats only to take into account inflation)
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    (Original post by Goods)
    9000 + 3610


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    Eesh

    How often does it go up? That's one thing I don't understand

    Like if the rate is 2%, and you're on 260 rn, do they multiply by 1.02 and divide by 365 and add it on for the day?
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    (Original post by L'Evil Fish)
    Eesh

    How often does it go up? That's one thing I don't understand

    Like if the rate is 2%, and you're on 260 rn, do they multiply by 1.02 and divide by 365 and add it on for the day?
    I *think* it's calculated monthly. So you take the capital plus interest accrued so far and then add the extra interest owing on that to get the new grand total.

    It does look scary. But you don't have to pay it back unless and until, etc etc.


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    (Original post by jneill)
    I *think* it's calculated monthly. So you take the capital plus interest accrued so far and then add the extra interest owing on that to get the new grand total.

    It does look scary. But you don't have to pay it back unless and until, etc etc.


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    SLC can (and probably will have to some years down the line) change the terms of repayment. This is made clear in the student contract...many creditors believe they will not stick to the 30yr write-off, it is because of these terms that they're able to have the debt underwritten
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    (Original post by newblood)
    SLC can (and probably will have to some years down the line) change the terms of repayment. This is made clear in the student contract...many creditors believe they will not stick to the 30yr write-off, it is because of these terms that they're able to have the debt underwritten
    I thought write of was now at 65?


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    (Original post by Goods)
    Again I return to my belief that my parents earnings and education should make no difference to whether or not I as an individual can afford university.


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    Weird. You've just used the main point FOR the existence of bursaries as an argument against them.

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    (Original post by Elcor)
    Weird. You've just used the main point FOR the existence of bursaries as an argument against them.

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    Ive used it generally rather than in a special case. It's an entirely different point.


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    (Original post by Goods)
    I thought write of was now at 65?


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    I think that's under the much older loan system where tuition fees were 1k. For the guys paying 3k it is a 25 year write-off, and for us it is (currently) 30 years
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    (Original post by newblood)
    yeah but when you want to take a mortgage out, it'll affect you then
    Just on this, I agree that mortgage lenders do take the monthly student loan repayment into account when they are working out the "affordability" of a mortgage.

    But, to be clear, it doesn't affect your credit rating.

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    (Original post by jneill)
    Just on this, I agree that mortgage lenders do take the monthly student loan repayment into account when they are working out the "affordability" of a mortgage.

    But, to be clear, it doesn't affect your credit rating.

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    Yeah that's right. A mortgage is the biggest loan most of us are ever likely to take in our lives so I'd say it's pretty damn important that it will affect us then
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    By the way, Student Finance has confirmed that the removal of the government grant will not affect us. We'll be the last year to get them.
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    (Original post by Elcor)
    By the way, Student Finance has confirmed that the removal of the government grant will not affect us. We'll be the last year to get them.
    Interesting. What about deferees? I expect they will be affected.

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    (Original post by jneill)
    Interesting. What about deferees? I expect they will be affected.

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    Whoever begins a degree in 2016/17 onwards will be affected.
 
 
 
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