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Should I pay off my student debt early (or go to uni?) Watch

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    Hi everyone,

    I've finally managed to secure a job for the first time since last june. the wage isn't too great (19.8k a year doing data entry). I have about 6k savings and 21k debt.

    I've not got an MSc and think getting one might help me get a graduate job, but at the same time my student debt from my undergrad is making me feel insecure, so I was wondering what should I do?

    Should I pay down my student debt with my savings and wages from the job and try get this to £0 asap and so be debt free, and then worry about doing an MSc and uni, OR should I save wages and my savings and do a msc, hopefully get into a better job and then pay down my debt whilst in this new job? Bit of a dilemma because I can't really do both I think.

    I'm slightly leaning towards paying my debt off so I have one less thing to worry about in life. What do you all think?
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    (Original post by rock_climber86)
    Hi everyone,

    I've finally managed to secure a job for the first time since last june. the wage isn't too great (19.8k a year doing data entry). I have about 6k savings and 21k debt.

    I've not got an MSc and think getting one might help me get a graduate job, but at the same time my student debt from my undergrad is making me feel insecure, so I was wondering what should I do?

    Should I pay down my student debt with my savings and wages from the job and try get this to £0 asap and so be debt free, and then worry about doing an MSc and uni, OR should I save wages and my savings and do a msc, hopefully get into a better job and then pay down my debt whilst in this new job? Bit of a dilemma because I can't really do both I think.

    I'm slightly leaning towards paying my debt off so I have one less thing to worry about in life. What do you all think?
    I would do the MSc, you will probably be able to find a better job and pay off the debt. What if you get stuck in the job you have now? Is it one you can see yourself doing for your whole life?
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    (Original post by Dannyisnervous)
    I would do the MSc, you will probably be able to find a better job and pay off the debt. What if you get stuck in the job you have now? Is it one you can see yourself doing for your whole life?
    Deffo can't do this job forever. I could probably happily trudge along or apply for a job internally that is stimulating, but don't think i could do data entry forever . My dream is to be an exploration geophysicist, but i only have a bsc atm with little seismic experience. Thinking uni might help get a job but no guarantees due to the tough job market, so it's a super tough call!

    I'm soooo confused!
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    With the way student finance works, it rarely makes sense to pay anything more than the minimum required.
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    (Original post by rock_climber86)
    Deffo can't do this job forever. I could probably happily trudge along or apply for a job internally that is stimulating, but don't think i could do data entry forever . My dream is to be an exploration geophysicist, but i only have a bsc atm with little seismic experience. Thinking uni might help get a job but no guarantees due to the tough job market, so it's a super tough call!

    I'm soooo confused!

    Don't pay off your loan! Do a master's and get yourself a well paid job in geophysics. THEN.....if you are still bothered by the debt, you can pay it off pretty quickly. It will probably still not be worth doing that.....the monthly payments to the SLC shouldn't be a problem. If someone has a good lump sum, they're better off using it towards a deposit for their first home.
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    Thanks for the advice guys; my friend said the same thing. I'm gonna just bank the money and save for an MSc .
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    (Original post by rock_climber86)
    Hi everyone,

    I've finally managed to secure a job for the first time since last june. the wage isn't too great (19.8k a year doing data entry). I have about 6k savings and 21k debt.

    I've not got an MSc and think getting one might help me get a graduate job, but at the same time my student debt from my undergrad is making me feel insecure, so I was wondering what should I do?

    Should I pay down my student debt with my savings and wages from the job and try get this to £0 asap and so be debt free, and then worry about doing an MSc and uni, OR should I save wages and my savings and do a msc, hopefully get into a better job and then pay down my debt whilst in this new job? Bit of a dilemma because I can't really do both I think.

    I'm slightly leaning towards paying my debt off so I have one less thing to worry about in life. What do you all think?
    For heaven's sake, you are not in debt. You have no obligation to pay the "loan" off and will make no contributions on earned income below £15,000. Go and do the MSc.

    Seriously, surely if you have a job you should know how repayments work by now, and that you are not in debt and you certainly do not have to worry about it. 9% of income above £15,000, written off after 30 years is not a debt, it is a graduate tax.
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    (Original post by scrotgrot)
    For heaven's sake, you are not in debt. You have no obligation to pay the "loan" off and will make no contributions on earned income below £15,000. Go and do the MSc.

    Seriously, surely if you have a job you should know how repayments work by now, and that you are not in debt and you certainly do not have to worry about it. 9% of income above £15,000, written off after 30 years is not a debt, it is a graduate tax.
    is it really written off in £30 years? Even if you were under the £3k a year tuition fees?


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    (Original post by rock_climber86)
    is it really written off in £30 years? Even if you were under the £3k a year tuition fees?


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    It's 25 years for those of us who started pre-2012 according to this http://www.arts.ac.uk/fees-funding/m...ymentspre2012/
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    (Original post by Origami Bullets)
    It's 25 years for those of us who started pre-2012 according to this http://www.arts.ac.uk/fees-funding/m...ymentspre2012/
    That's very interesting - thanks for the link. I'm less worried about it now. I can concentrate on the msc + getting a better job now! :eek:
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    I think it would be unwise to use your savings to pay off your debt. Do you think you will fell more secure with 15k debt and no savings for when heaven forbid, something bad happened?

    Student debt is different to other debt- it won't give a bad credit history and you won't be chased for it etc..
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    (Original post by rock_climber86)
    That's very interesting - thanks for the link. I'm less worried about it now. I can concentrate on the msc + getting a better job now! :eek:
    That link says that if you received your loan in or before 2006/07 it's written off when you're 65! I think that unless you had a GY, you had yours in 2005/06?

    Explained further here....

    http://www.slc.co.uk/services/loan-r...off-terms.aspx
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    (Original post by scrotgrot)
    For heaven's sake, you are not in debt. You have no obligation to pay the "loan" off and will make no contributions on earned income below £15,000. Go and do the MSc.

    Seriously, surely if you have a job you should know how repayments work by now, and that you are not in debt and you certainly do not have to worry about it. 9% of income above £15,000, written off after 30 years is not a debt, it is a graduate tax.
    Agreed.

    I have no idea how those on 9k a year fees will ever pay off in 30 years. I was at least lucky with the 3K fees but even with those I doubt I will be able to pay off the loan within the 25 years (or 23 years now which I have paid zero off so far with a year doing an MSc and a year of unemployment).
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    (Original post by NHSFan)
    That link says that if you received your loan in or before 2006/07 it's written off when you're 65! I think that unless you had a GY, you had yours in 2005/06?

    Explained further here....

    http://www.slc.co.uk/services/loan-r...off-terms.aspx
    I just called the student loans company and they clarified it. I was 'lucky' and unlucky at the same time. I started uni in 2005 and dropped out after a year and had a gap year, and so restarted uni in 2007 and was subject to the £3k a year fees. So the SLC told me the loan for 2005/6 would be subject to the "pay until you're 65" t&C's but the 2007-2010 loans would be wiped out after 25 years.

    At the way my life is going at the moment I will be lucky to have paid off my loans in 25 years, so a mini woo hoo! So after 25 years my student debt will be written off and i'll have £7k or something to pay for the pre 2006 fees. I'm going to write to SLC in glasgow for full T&C's

    (Original post by Politics Student)
    Agreed.

    I have no idea how those on 9k a year fees will ever pay off in 30 years. I was at least lucky with the 3K fees but even with those I doubt I will be able to pay off the loan within the 25 years (or 23 years now which I have paid zero off so far with a year doing an MSc and a year of unemployment).
    I'm thinking of going back to do an msc as it's super hard to get a job. Are you telling me your msc has not helped you get a job? :eek: Mega depressing :/
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    (Original post by rock_climber86)


    I'm thinking of going back to do an msc as it's super hard to get a job. Are you telling me your msc has not helped you get a job? :eek: Mega depressing :/
    No it has not helped.

    Well you have say better chances at entry level jobs, grad scheme, etc

    But at a massive cost. You will be viewed as overqualified and your CV will simply be binned in many places you apply. The issue here is that there are so much competition for grad schemes and entry level jobs that you simply don't stand much of a chance.

    It is a frustrating situation.
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    (Original post by rock_climber86)
    is it really written off in £30 years? Even if you were under the £3k a year tuition fees?


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    Yes - nothing to worry about
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    (Original post by Politics Student)
    Agreed.

    I have no idea how those on 9k a year fees will ever pay off in 30 years. I was at least lucky with the 3K fees but even with those I doubt I will be able to pay off the loan within the 25 years (or 23 years now which I have paid zero off so far with a year doing an MSc and a year of unemployment).
    Yes, the government have kicked the can down the road as very few people will pay it off. It doesn't matter to us though as there is no obligation to actually pay any of it off.
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    (Original post by rock_climber86)
    I just called the student loans company and they clarified it. I was 'lucky' and unlucky at the same time. I started uni in 2005 and dropped out after a year and had a gap year, and so restarted uni in 2007 and was subject to the £3k a year fees. So the SLC told me the loan for 2005/6 would be subject to the "pay until you're 65" t&C's but the 2007-2010 loans would be wiped out after 25 years.

    At the way my life is going at the moment I will be lucky to have paid off my loans in 25 years, so a mini woo hoo! So after 25 years my student debt will be written off and i'll have £7k or something to pay for the pre 2006 fees. I'm going to write to SLC in glasgow for full T&C's
    I'd be very careful about trusting information like this on loan write-off from student finance advisors. When I called to clarify exactly when the 25 year write-off period is calculated from when you have loans for different courses (e.g. a course previously withdrawn from or a subsequent course like a PGCE) I got conflicting information. They said all loans under the same repayment plan (there are two: 'plan 1' pre-2012 and 'plan 2' post-2012) are written off as a lump sum (so if you take a loan out and drop out this loan does not get written off separately from the other loans). The conflicting information (for plan 1 loans taken 2006-2011) was whether this is 25 years after your last loan agreement was taken out (so the April after finishing, say, a PGCE) or 25 years from the April after the course from which you first dropped out and repayments activated for that loan or 25 years from the April after you finally graduated. It is rather worrying that the clarity on loan write-offs when you have loans for different courses is so unclear. There is no clear guidance in the terms and conditions which makes me think that when it does come to around the time these loans should be written off, there may be complications so it may not be as clear-cut as it seems (which is even more worrying for those with plan 2 loans due to the sheer amount of outstanding balance which makes the point these loans are written off - 30 years - extremely important).

    The vital point is whether each loan balance for different courses is dealt with separately or not (I know they are for loans on different repayment plans but are they for loans within the same repayment plan?) Can anyone who took out pre-2012 loans for more than one course tell me from experience (logging into your repayment account at http://www.studentloanrepayment.co.uk) whether the loan balances for the different courses are shown as separate balances or all under the same balance added together? If the latter then there is no way they can tell (with all the interest accrued) what proportion of loan to write-off after 25 years (for the 2006-2011 loans) and what to leave until you're 65 (for the pre-2006 loans). Therefore I believe that if you took any loans out before 2006 then (since existing customers retained their existing rights in the 2006 changes) all your subsequent loans taken out under 'plan 1' (pre-2012) aren't written off until you reach 65.
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    (Original post by TheEd)
    Therefore I believe that if you took any loans out before 2006 then (since existing customers retained their existing rights in the 2006 changes) all your subsequent loans taken out under 'plan 1' (pre-2012) aren't written off until you reach 65.
    Well if i was under plan one i wouldn't have been suddenly asked to pay 3k a year (up from £1150 a year I was paying initially). I was advised to write in for further info. and I got an address. I will seek written confirmation what I was told over the phone was indeed the case and in 25 years if they do try go back on their word I will show them the letter
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    (Original post by rock_climber86)
    Well if i was under plan one i wouldn't have been suddenly asked to pay 3k a year (up from £1150 a year I was paying initially). I was advised to write in for further info. and I got an address. I will seek written confirmation what I was told over the phone was indeed the case and in 25 years if they do try go back on their word I will show them the letter
    All loans taken out 1998-2011 are now called 'plan 1' loans since they have the same repayment threshold (£16365 from April 6th) and the same interest rate. I think that if you log in to your repayment account at www.studentloanrepayment.co.uk that you'll have one balance rather than one for each course and it'll say 'plan 1' next to it. Can you check and tell me whether this is the case as I'm also interested in this.

    There's absolutely no way of them being able to write-off a portion of one loan balance if the loan balances are not divided up and if the loan balances were divided up then nobody would know which balance to deduct repayments from first.

    The following is from the HMRC site (http://www.hmrc.gov.uk/manuals/cslma...5.htm#IDARPISH) under 'New lending is made to students (not from Scotland) and is subject to a maximum 25 year term'.

    "New lending to students who are not from Scotland is subject to a 25-year maximum term, because of the changes to the age entitlement for new maintenance loans. Existing borrowers retain their existing rights for both new and existing borrowing, however."

    •Lending to borrowers who borrow for the first time in 2006-07 is written off if not repaid within 25 years. This applies to students who
    ◦Enter higher education in 2006-07 (whether or not following a gap year)
    ◦Entered higher education before 2006-07, but elected not to draw down a student loan in previous years

    Or who
    ◦Entered higher education before 2006-07 but were not eligible or entitled to receive a student loan in previous years, but who become eligible for one of the loan products in 2006-07

    •Lending to other borrowers is written off at age 65.

    So, since you took out a loan prior to the 2006/07 academic year, all subsequent loans are written off when you reach age 65. It shouldn't make much difference in practice though, as with a larger loan balance (none written off after 25 years) or a smaller loan balance (if some had been written off after 25 years), you'd still need to make repayments of the same amount until you get to 65.
 
 
 
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