Ooh I see. Does interest start while still in uni or when you leave ? (I assumed it would be after leaving). [P.s. Kudos for making that, that's quite cool](Original post by lerjj)
I had a feeling it was 3%. That's not looking good for me
Here's a screenshot, I don't think I did anything wrong:
Basically the gist is that if you model salaries as increasing, say 3% each year (i.e. a geometric increase, rather than a fixed £3k raise which seems less natural) then your salary has to increase dramatically to overcome a 3% interest rate on a 46K loan by 20 years. Specifically, you don't start decreasing the loan until 6 years out of uni, and by 20 years out you would be earning almost £140K. The debt remains above 46K until 13 years out of uni - all of it is then paid off quickly because your salary has gotten insane by this point using this model.
Now, there's a couple of things which might be wrong with that simulation, but basically if you want to take out a 46K loan, you need to be earning a lot of money. A lot of students won't be earning that much I wager.
I think that this sim is accurate enough that I ought to be worried by the results, although it's inaccurate enough that obviously you shouldn't use it for forecasting.
That's true, but then it is still wiped after 30 years - I think the general assumption is there will be many people who will not pay it all back. (Especially with the lower payback system)
And it's not like it affects any other loans etc.
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