I know the situation with the student loan repayment itself. Above 21k .. 9% of difference between what you earn and 21k. That's not a problem at all logically. A 51k salary would mean paying back 2.7k in the year which is nothing to worry about.
But I recently logged into the student finance repayment website and the interest shocked me. As I have a £5000 bursary which has been taken off my tuition loan, I only owe back £4000 for my first year. Yet logging in just over a month ago I already owed back £4150. So if I was to owe the original £9000 then the interest by now would be near £500 already. That is crazy and scary.
I already owe about £6000 from doing a year of University back in 2009 and I have not even accumulated 1k in interest yet in 6 years.
Now my question is this - how is the interest calculated? What is RPI? Is it variable or fixed? Website said I think it was 5.5% RPI. Has anyone anywhere made calculations as to potential interest repayments years down the line and the totals?
Because the rate it is growing at at the moment ... I can only estimate that you might end up with repaying more interest than the student debt itself! Which would mean hugeeee debt. If that's the case I might be better off paying off my £4150 debt now in one go and alleviate some of the potential future interest accrual.
There must be some calculations somewhere to provide some information?
Thanks.