The Student Room Group

Student Loans

I'm currently in Y13 and I'm really worried about student loans, how will I pay them back? And what if I go broke? Is it long term and is it hard?
Reply 1
Original post by Anonymous
I'm currently in Y13 and I'm really worried about student loans, how will I pay them back? And what if I go broke? Is it long term and is it hard?

In most cases, your student loans are effectively an additional tax. If you're employed (and you earn enough for the repayments to kick in), then your repayments are simply deducted from your wages before you get paid -- in exactly the same way as income tax and national insurance are deducted.

There's plenty of information here: https://www.gov.uk/repaying-your-student-loan

If you don't earn enough for repayments to start, then you don't pay anything. And loans taken out under the current system are cancelled after 40 years.

Student loans are not cancelled by bankruptcy (if that's what you mean by "go[ing] broke").
Hi there,

Student loans are a common part of higher education and many graduates successfully manage their repayments. So here are a few factors you should consider:

1.

You will start repaying your student loan from the April after you finish your course.

2.

Graduates make no repayments if they earn below a certain threshold (currently £27,295). However, if your income goes over this threshold, you'll have to repay a percentage of your earnings (either 6% or 9% depending on your loan plan).

3.

The repayment period is currently at 30 years. Therefore, any outstanding balance is written off after this period with no adverse consequences for the graduates.

4.

Student debt can be a burden, sometimes affecting your quality of life and financial choices.

5.

Nevertheless, you can always reach out to your universities and ask about grants or scholarships to support your studies.

I understand your concerns about student loans. Therefore, it would be best if you consider seeking financial advice or researching repayment options based on your current circumstances.

I hope I managed to help!

Best of luck,
Melanie
LSBU Rep
Reply 3
Original post by LSBU Student Rep
Hi there,
Student loans are a common part of higher education and many graduates successfully manage their repayments. So here are a few factors you should consider:

1.

You will start repaying your student loan from the April after you finish your course.

2.

Graduates make no repayments if they earn below a certain threshold (currently £27,295). However, if your income goes over this threshold, you'll have to repay a percentage of your earnings (either 6% or 9% depending on your loan plan).

3.

The repayment period is currently at 30 years. Therefore, any outstanding balance is written off after this period with no adverse consequences for the graduates.

4.

Student debt can be a burden, sometimes affecting your quality of life and financial choices.

5.

Nevertheless, you can always reach out to your universities and ask about grants or scholarships to support your studies.

I understand your concerns about student loans. Therefore, it would be best if you consider seeking financial advice or researching repayment options based on your current circumstances.
I hope I managed to help!
Best of luck,
Melanie
LSBU Rep

When you say "The repayment period is currently at 30 years" you're referring to "Plan 2" student loans, which are for students whose course started between 1 September 2012 and 31 July 2023. These have a threshold for repayments at £27,295 a year, and you pay 9% of earnings above that threshold. These loans get written off after 30 years. See sections 5.2 and 6.9 at https://www.gov.uk/government/publications/student-loans-a-guide-to-terms-and-conditions/student-loans-a-guide-to-terms-and-conditions-2024-to-2025

OP is in year 13, so has not yet started their university course. When they do start, they'll be taking out a "Plan 5" loan. For these loans, repayments start at £25,000 a year, with repayments of 9% of earnings. These get written off after 40 years. See sections 5.4 and 6.9 at https://www.gov.uk/government/publications/student-loans-a-guide-to-terms-and-conditions/student-loans-a-guide-to-terms-and-conditions-2024-to-2025
Original post by Anonymous
I'm currently in Y13 and I'm really worried about student loans, how will I pay them back? And what if I go broke? Is it long term and is it hard?

HI there,

As others have said, you won't pay any loans back until your earnings are over a certain threshold, so don't worry about being unable to pay them. Even then, you pay them back in relation to your earnings so you won't pay more back until you earn more.

It is long term, and as far as I am aware you will be paying it back for 40 years after you graduate ( I think you are in the year where it is changing to 40 years), however after this time it gets wiped off even if you have not paid it all off yet.

I would recommend having more of a look into this and see if it is something that you want to do. The websites that have been sent in by others are great for looking into the loan system. You can also look online to see how much loan you will be eligible for and this will help you to understand how much you will have to pay back in total.

It might also be worth talking to your teachers at school/college about this or your family as they may also be able to explain it to you in a way that makes sense to you!

I hope some of this helps,

Lucy -SHU student ambassador.
Original post by LSBU Student Rep
Hi there,

Student loans are a common part of higher education and many graduates successfully manage their repayments. So here are a few factors you should consider:

1.

You will start repaying your student loan from the April after you finish your course.

2.

Graduates make no repayments if they earn below a certain threshold (currently £27,295). However, if your income goes over this threshold, you'll have to repay a percentage of your earnings (either 6% or 9% depending on your loan plan).

3.

The repayment period is currently at 30 years. Therefore, any outstanding balance is written off after this period with no adverse consequences for the graduates.

4.

Student debt can be a burden, sometimes affecting your quality of life and financial choices.

5.

Nevertheless, you can always reach out to your universities and ask about grants or scholarships to support your studies.

I understand your concerns about student loans. Therefore, it would be best if you consider seeking financial advice or researching repayment options based on your current circumstances.

I hope I managed to help!

Best of luck,
Melanie
LSBU Rep

There are a lot of errors in this. :rolleyes:

The current loan plan is plan 5 (it came into effect for students starting in Autumn 2023), which has an earnings threshold of £25,000 and a repayment term of 40 years. Repayments are 9% of any earnings above the threshold (not all earnings).
(edited 4 weeks ago)
Original post by Anonymous
I'm currently in Y13 and I'm really worried about student loans, how will I pay them back? And what if I go broke? Is it long term and is it hard?


In addition to the advice given to you by martin7, I recommend you read the following article to give you a better understanding of how student finance works:

https://www.moneysavingexpert.com/students/student-loans-england-plan-5/

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