Student loan is scary"

Watch
melliottme
Badges: 14
Rep:
?
#1
Report Thread starter 3 years ago
#1
My daughter is looking to do a do a 4 year language degree so this morning I looked at the costs etc and what a fright.
On the assumption that fees do not rise and that the RPI remains at 3.1% this is what I calculated the cost for the fees ONLY.
Year 1: £9250 and cost of 3.1% = £9536.75
Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14
Year 3: £19369.14 + £1387.50 (15% of fees payable when studying abroad) = ££20756.64 + 3.1% = £21,400.10
Year 4: £21,400.10 + £9250 = £30,650.10 + 3.1% = £30,600.25

Until April after you graduate the interest is RPI 3.1% for 2017/18 but is variable and thereafter it will be RPI + 3% added each year and for 2017/18 this 6.1%.
The interest would jump to £1866 the first year and unless she walks into a job of about £40,733.34 she would not be able to repay any actual loan and interest is added onto interest.
To repay £1866 per year at todays rates the repayment from her salary would need to be £155.50 pm just to stand still and any future mortgage / loan would be reduced due to the repayments.
The money that many will pay will be eyeeatering by the time you are 50 and will still 'owe' momey that will be 'written off'

I truely feel that todays students are being punished yet Are the UK's future.
1
reply
Pleasantri
Badges: 14
Rep:
?
#2
Report 3 years ago
#2
Whilst I understand your concern, your daugher will be paying that debt off with extremely generous terms (more generous than mine).
0
reply
Arianax
Badges: 20
Rep:
?
#3
Report 3 years ago
#3
Well, you can always pay the fees yourself.

All students are in this position, unfortunately certain careers require a degree.

I don’t know the career opportunities for languages.

Plus, it gets wiped off after 30 years.
0
reply
Yaboi
Badges: 17
Rep:
?
#4
Report 3 years ago
#4
I really need to check how much ive got left
0
reply
claireestelle
Badges: 22
Rep:
?
#5
Report 3 years ago
#5
(Original post by melliottme)
My daughter is looking to do a do a 4 year language degree so this morning I looked at the costs etc and what a fright.
On the assumption that fees do not rise and that the RPI remains at 3.1% this is what I calculated the cost for the fees ONLY.
Year 1: £9250 and cost of 3.1% = £9536.75
Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14
Year 3: £19369.14 + £1387.50 (15% of fees payable when studying abroad) = ££20756.64 + 3.1% = £21,400.10
Year 4: £21,400.10 + £9250 = £30,650.10 + 3.1% = £30,600.25

Until April after you graduate the interest is RPI 3.1% for 2017/18 but is variable and thereafter it will be RPI + 3% added each year and for 2017/18 this 6.1%.
The interest would jump to £1866 the first year and unless she walks into a job of about £40,733.34 she would not be able to repay any actual loan and interest is added onto interest.
To repay £1866 per year at todays rates the repayment from her salary would need to be £155.50 pm just to stand still and any future mortgage / loan would be reduced due to the repayments.
The money that many will pay will be eyeeatering by the time you are 50 and will still 'owe' momey that will be 'written off'

I truely feel that todays students are being punished yet Are the UK's future.
If you see it as a graduate tax then it seems much less harmful. Also both myself and my husband have students loans and we've looked at a couple of AIP's for mortgages recently, as the payments are so low for him and nothing for me, it's doing next to no harm to our chances if any of getting a mortgage. You have to earn over 30k a year to even pay 1k back a year,i think you'd need a starting salary of above 45k to have any chance of paying the whole things back.
Take a look at this article and it wont seem anywhere near as scary.
http://www.moneysavingexpert.com/stu...ges#multiThree
1
reply
SirMilkSheikh
Badges: 11
Rep:
?
#6
Report 3 years ago
#6
You've done the math. You could learn several languages for that price privately and still have half to put into an index fund paying dividends of 10%+

The juice simply isn't worth the squeeze as your daughter will inevitably find out after graduating.
3
reply
999tigger
Badges: 19
#7
Report 3 years ago
#7
(Original post by melliottme)
My daughter is looking to do a do a 4 year language degree so this morning I looked at the costs etc and what a fright.
On the assumption that fees do not rise and that the RPI remains at 3.1% this is what I calculated the cost for the fees ONLY.
Year 1: £9250 and cost of 3.1% = £9536.75
Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14
Year 3: £19369.14 + £1387.50 (15% of fees payable when studying abroad) = ££20756.64 + 3.1% = £21,400.10
Year 4: £21,400.10 + £9250 = £30,650.10 + 3.1% = £30,600.25

Until April after you graduate the interest is RPI 3.1% for 2017/18 but is variable https://www.thestudentroom.co.uk/sho...8742&page=3and thereafter it will be RPI + 3% added each year and for 2017/18 this 6.1%.
The interest would jump to £1866 the first year and unless she walks into a job of about £40,733.34 she would not be able to repay any actual loan and interest is added onto interest.
To repay £1866 per year at todays rates the repayment from her salary would need to be £155.50 pm just to stand still and any future mortgage / loan would be reduced due to the repayments.
The money that many will pay will be eyeeatering by the time you are 50 and will still 'owe' momey that will be 'written off'

I truely feel that todays students are being punished yet Are the UK's future.
You are looking at it wrong as its not like real commercial debt, its a form of quasi debt where most of it wont be paid off.nor do people come after you for it. Look at the bigger picture and stop freaking yourself out.
1
reply
Yaboi
Badges: 17
Rep:
?
#8
Report 3 years ago
#8
(Original post by SirMilkSheikh)
You've done the math. You could learn several languages for that price privately and still have half to put into an index fund paying dividends of 10%+

The juice simply isn't worth the squeeze as your daughter will inevitably find out after graduating.
Link to such things?
0
reply
melliottme
Badges: 14
Rep:
?
#9
Report Thread starter 3 years ago
#9
(Original post by claireestelle)
If you see it as a graduate tax then it seems much less harmful. Also both myself and my husband have students loans and we've looked at a couple of AIP's for mortgages recently, as the payments are so low for him and nothing for me, it's doing next to no harm to our chances if any of getting a mortgage. You have to earn over 30k a year to even pay 1k back a year,i think you'd need a starting salary of above 45k to have any chance of paying the whole things back.
Take a look at this article and it wont seem anywhere near as scary.
http://www.moneysavingexpert.com/stu...ges#multiThree
Thank you will have a look at the article.
0
reply
SirMilkSheikh
Badges: 11
Rep:
?
#10
Report 3 years ago
#10
(Original post by Yaboi)
Link to such things?
https://www.vanguard.co.uk/adviser/i...uity/?overview
1
reply
Yaboi
Badges: 17
Rep:
?
#11
Report 3 years ago
#11
Link to more to diversify
0
reply
SirMilkSheikh
Badges: 11
Rep:
?
#12
Report 3 years ago
#12
(Original post by Yaboi)
Link to more to diversify
It's all there on the Vanguard site. They have all sorts of different funds from the FTSE 100, S&P 500, emerging markets, bonds, and a mixture of funds including stocks and bonds.
0
reply
Doones
Badges: 21
Rep:
?
#13
Report 3 years ago
#13
Historic dividend yield 1.6%

Unless you mean capital growth, but as with any investment like this past performance is no guarantee of future performance...
0
reply
SirMilkSheikh
Badges: 11
Rep:
?
#14
Report 3 years ago
#14
(Original post by Doonesbury)
Historic dividend yield 1.6%

Unless you mean capital growth, but as with any investment like this past performance is no guarantee of future performance...
That is true.
0
reply
the_queen
Badges: 20
Rep:
?
#15
Report 3 years ago
#15
(Original post by melliottme)
Year 2: £9536.75 + £9250 = £18786.75 + 3.1% = £19369.14

.
why did you put this for Year 2?
0
reply
Doones
Badges: 21
Rep:
?
#16
Report 3 years ago
#16
(Original post by the_queen)
why did you put this for Year 2?
Cumulative debt.

(It's ignoring the maintenance loan though)
0
reply
the_queen
Badges: 20
Rep:
?
#17
Report 3 years ago
#17
(Original post by Doonesbury)
Cumulative debt.

(It's ignoring the maintenance loan though)
Ahh, ok. Thank you!
1
reply
melliottme
Badges: 14
Rep:
?
#18
Report Thread starter 3 years ago
#18
(Original post by Doonesbury)
Cumulative debt.

(It's ignoring the maintenance loan though)
Did not continue as I felt quite depressed.
0
reply
Doones
Badges: 21
Rep:
?
#19
Report 3 years ago
#19
(Original post by melliottme)
Did not continue as I felt quite depressed.
The MOST important thing to keep in mind is it's not a typical loan.

For example, the loan itself doesn't affect the student's credit score (although the monthly repayments are factored into any "ability to pay" calculations when asking for a mortgage, etc).

It's only repaid at all when the student earns above the monthly limit, and they only repay on those earnings above that limit.

And MOST students will not pay the loan off in full. The forecast is something like 60% of students will have debts written off.

It's the same for all students and shouldn't really worry you or your child.

By the way, it's clearly become a hot political issue for the current government given the fright they got at the last GE. So I think it's fair to expect some further reforms in favour of the student in the coming years.
1
reply
X

Quick Reply

Attached files
Write a reply...
Reply
new posts
Back
to top
Latest
My Feed

See more of what you like on
The Student Room

You can personalise what you see on TSR. Tell us a little about yourself to get started.

Personalise

Which of these would you use to help with making uni decisions?

Webinars (63)
12.28%
Virtual campus tours/open days (120)
23.39%
Live streaming events (46)
8.97%
Online AMAs/guest lectures (50)
9.75%
A uni comparison tool (119)
23.2%
An in-person event when available (115)
22.42%

Watched Threads

View All