do you still have to pay back ALL of maintenance loan if you don't use all of it?

Hi so if I'm entitled to receiving more maintenance loan, but if I don't use it all, do i still have to repay ALL of it (including interest)? my dad is scared that i'll have to repay back a loan i might not use.

Reply 1

PQ

Clearing and Applications Advisor

21

Most people don’t repay their loans in full. The debt is wiped before they repay everything.

Reply 2

normaw

Clearing and Applications Advisor, Universities Forum Helper

19

Original post by annqbellex

Hi so if I'm entitled to receiving more maintenance loan, but if I don't use it all, do i still have to repay ALL of it (including interest)? my dad is scared that i'll have to repay back a loan i might not use.

Why don't you think you will need all of the loan? Uni accommodation can be between £5,000 to £8,000 per year, and then you have to live, buy food, travel expenses, etc. If you think you can manage on less, then you can ask for the amount to be reduced through your student finance account.

Students starting uni in 2023 (and beyond) will pay off more of their student loans than their predecessors as the new Plan 5 loans have a repayment term of 40 years (it was 30) and a lower earnings threshold of £25,000. I recommend that you (and your parents) read the following article on student finance. There is a table in it that shows the average amount you are likely to pay back based on graduate earnings:

https://www.moneysavingexpert.com/students/student-loans-2023/

(edited 1 year ago)

Reply 3

PQ

Clearing and Applications Advisor

21

FWIW - even if you do expect to repay in full - additional loan doesn’t increase the amount you repay each month. It just increases the number of months/years that you make those repayments.

I would always recommend taking out maximum loans. £1000 in your savings as a new graduate trying to find affordable housing, set up your career and life is going to be far more valuable to you than an extra £50 a month to repay when you’re in your 40s or 50s

Reply 4

artful_lounger

Universities Forum Helper

21

Original post by annqbellex

Hi so if I'm entitled to receiving more maintenance loan, but if I don't use it all, do i still have to repay ALL of it (including interest)? my dad is scared that i'll have to repay back a loan i might not use.

As above, there's really little benefit in taking less than the full loan. Also the repayment structure is not like bank loans - you won't have bailiffs knocking on your door for repayments...

I would recommend reading this article (and sharing it with your parent(s)): https://www.gov.uk/government/news/8-things-you-should-know-about-your-student-loan--2

Reply 5

katerrina

3

As said above, getting extra loan doesn’t increase the amount you pay for each month, it just increases the length of repayment. However, the repayment is scrapped after 30 years, from the point you graduate, also bare in mind that you only start repaying once you reach the threshold of earning 27k a year and it starts of with something like 50£ a month so it’s not bad. I would suggest you just save the money you don’t use and put it in premium donde or ISA or something, can save up and gain interest on it. Also, you never know what circumstances you’ll find yourself in, it’s always good to have a bit of extra cash on the side.

Reply 6

normaw

Clearing and Applications Advisor, Universities Forum Helper

19

Original post by katerrina

As said above, getting extra loan doesn’t increase the amount you pay for each month, it just increases the length of repayment. However, the repayment is scrapped after 30 years, from the point you graduate, also bare in mind that you only start repaying once you reach the threshold of earning 27k a year and it starts of with something like 50£ a month so it’s not bad. I would suggest you just save the money you don’t use and put it in premium donde or ISA or something, can save up and gain interest on it. Also, you never know what circumstances you’ll find yourself in, it’s always good to have a bit of extra cash on the side.

From this year, the new plan 5 loans have a 40-year repayment term and a lower threshold of £25,000.

do you still have to pay back ALL of maintenance loan if you don't use all of it?

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