[Closed] Student loans/Maintenance loans etc . Anybody in the know?

Sounds about right, I recruit graduates and they some of them have ~£50k of loans from 4 year courses, most of them seem to accept it as the cost of going into the profession (Engineering in this case) and most generally view it as a graduate tax for the foreseeable future in their career.

The size of the maintenance part of the loan depends on your income(s). If you have a fairly well paid job, you are expected to support to a greater, or much greater degree.

~£50k of loans from 4 year courses, most of them seem to accept it

This makes me really sad!

To be fair they only start paying back the loans one they're earning a half decent whack and after 30 years what is outstanding is written off...so a good chunk of people won't pay the entire loan off and some might not even pay any of it off, and those who do pay it off will likely be earning enough of a salary that the monthly payments won't be noticed.

Just started my PGCE SCITT. Fees loan straight to course provider. Maintenance load paid in 3 amounts at the start of each term to me. I think the min is around £4K but you can apply for more say £9k. Pretty sure this isn’t means tested or at least that is what the paperwork said. I also applied for adult learning and child care grants which is tested against household income.

I had a student loan in 1992 for my final under graduate year -£600 ish 🤗

It's a lot but it's also not the kind of debt you really have to think about and budget for, since it comes straight out of your salary. My repayments only go up if my salary goes up and afaik it doesn't affect my credit score, at least it doesn't show on reports.

They're 2-3x more now than mine from 10 years ago, and higher interest too, but I suspect the net effect is less people will actually pay them off.

It’s a lot but it’s also not the kind of debt you really have to think about and budget for, since it comes straight out of your salary.

This makes me even sadder

Just pointing out it's not this huge financial burden having a private loan for the same amount would be, or the way US student debt appears to be.

Whether it's right to charge students so much is another question but no one is being forced to meet repayments they can't afford.

It’s a lot but it’s also not the kind of debt you really have to think about and budget for, since it comes straight out of your salary

I guess that depends if your degree has been useful in procuring you a well paying job.

It's certainly would have made me think twice about going to uni.even now I'm not sure I took the right path (mech eng) I probably should have done an apprenticeship. I am fortunate that i got a decent paying job and being Scottish and of 08 alumni managed to scrape through without the mega loans.

From a quick calc on the you Gov website it looks as tho we're going to be about 1500 quid short of paying just the first year hall fees. Hopefully if that maintenance fee is paid in three then so is the accommodation anybody know if that's the case? However these halls are all catered plus you get 28 quid a week on a card to use in the campus cafes which to be fair seemed really nice, at least that way we know she is eating properly at some point during the week. In lamens it would appear you pay 9% out of your wage for everything your earn over 25k.

Sounds more like a hotel than halls.

Whats wrong with living off porridge for a month after you spent all your cash on drugs!!!

Martin Lewis has a good article about student loans. Basically he says it should be viewed as a tax, that mortgage lenders don’t factor it in to affordability calcs, and not to worry about it.

It should be called a Graduate Tax. But that’s a whole other discussion.

Tuition Fees is £9250 PA (because the market system for fees worked so well….not)
Maintenance Loan is Accom/Food. You can choose how much to take. Most accommodation providers (certainly Uni owned ones) will charge at the start of each term. The ‘food card’ for first year undergrads is a good thing if it’s administered well (and has a rollover if you don’t use it in the same week).

Note some unis (and esp private accommodation providers badged as uni accommodation) might make you move out at the end of each term. This is a massive PITA by all accounts.

My daughter is worried about the debt, although it’s easier to think of it as a tax you pay for HE rather than a massive loan hanging around your neck. We’re paying her first year accom. She’s gone for the min maintainability loan. I did say to her ‘you are there to have fun as well so don’t get too uptight about spending stuff on going out etc’.

I’m so ancient, I was the last year to get a full grant and have fees/accom paid for. My daughter refuses to believe such a time existed. Still we did live in a condemned block of flats!

Shame the government didnt make a graduate tax seeing as thats how its viewed. Instead they made a graduate tax that rich kids are exempt from!

No2 son went to uni and had the loans as we were not big earners and couldn't afford to fully fund him, he has now been working as a primary teacher for three years and because of the low salary pays off around £500 a year off the loan. The interest on the loan is 1500 a year so it's effectively increasing even though he's working.

Although uni was a great experience for him and made him grow up I would be wary of going to uni unless the earning potential afterwards was good, apprenticeships are a very decent alternative.

Seeing his loans statements makes me feel sick!

t’s a lot but it’s also not the kind of debt you really have to think about and budget for, since it comes straight out of your salary

I guess that depends if your degree has been useful in procuring you a well paying job.

Er no. Everyone calm down and do what the man above says about martin Lewis.

If you don't get a well paid job then you don't pay it off, simples.

I have just started a second degree, and bluntly it is a tax, most will never pay back what they have borrowed. If you want to go to Uni do it, don't worry about that side of things, The other side is having enough money to live on, but that has been an issue for decades. I worked out that on my current salary, a bit above average, the degree would cost me about £40 a month until I retire. it really isn't a great deal of money.

Martyn Lewis speaks a lot of sense on the subject without getting sucked into the arguments around it.

Does marital status affect maintenance grants? Seem to remember people joking about tactical divorces?

She’s gone for the min maintainability loan. I did say to her ‘you are there to have fun as well so don’t get too uptight about spending stuff on going out etc’.

Unless she plans on earning a big wedge when she graduates then I think this is a bad idea.
The amount you pay back each month is calculated on how much you earn, not how much you borrow. So if you don't plan on earning loads then it makes sense to get the biggest loan you can. Even if it is just to shove in the bank to use to pay off the loan.... Crazy huh...

As above read Martin whatsisname

Yeah we had that conversation. She said she’d find a job to make more spending money. She’s read the right advice but it’s her call...

Were you at my open day?

OK, here's the thing about the current student loan regime. Most people will never repay it all, and so therefore should try to never repay a penny, because every penny that you pay back is wasted if it gets written off.

Also, if that's not daft enough- the increase to £9000 is actually costing the taxpayer money because of the lower repayment rate. It's an absolute disgrace tbf. Literally the only reason today's kids are paying £9250 is to hide part of the national debt, so that it can be written off under some other government's watch in the future. GRGAHGAHRGH.

Anyway. Sorry. Genuinely the only sensible thing to do is to just grit your teeth and embrace it for the total shitshow it is, or, move to Scotland 3 years ago.

and bluntly it is a tax

Bluntly it isnt because some dont pay it.
Getting people to think ofbit as a graduate tax means the colossal ****ers that dreamt it up have pulled the wool over your eyes.

Bluntly it isnt because some dont pay it

Don't take this the wrong way but that is as wrong as most of the nonsense you have posted on this topic.

Are you really naive and stupid enough to think that the definition of a tax is something everyone pays?
You poor deluded fool. Only little people pay tax, and some of the mediums.
Various people on this thread are trying to educate the mediums so they don't pay unnecessarily.
Breathe, take a step back and listen to what people are writing
Oh, and read Martin whossnames posts, please.

Don’t take this the wrong way but that is as wrong as most of the nonsense you have posted on this topic.

I dont and its not a tax and thinking of it as a tax is daft, I couldnt give a monkeys what Martin Whatsit says. By all means consider it a tax if you are paying it but it clearly isnt a tax and I wont consider it a tax because its not, you've been conned

So as I see it, fees are, as above, 9250 a year, that's a given and will be borrowed. I'm not a high earner monthly but recieve a bonus. How this works for us I don't know, i believe the "household income" will be based on previous years p60 figures and not current monthly wage slips like a mortgage would.
We cant really afford it, but we will afford it because this one is definitely worth investing in. No bullshit here, on the walk out of the uni back to the van we discussed, money, apprenticeships, jobs etc, her exact words were, "dad , I'd stay at school if I could, I just love learning new stuff". Thankfully we're talking a chemistry masters as a subject, which she needs three a's for and will hopefully lead her in to a great job. Oh and the gym was ace too 😂

I did a 12 month post grad course 30 years ago, cost about 1 years starting salary. That was london costs and London salary, all in. Best investment I ever made, salary doubled in 2 years.

So go for it, live on beans, i very nearly did not do it as i could not see the return and had what i thought was an ok job. Point is it seems a lot of cash upfront but I reckon I got it all back via extra salary by year 5.

out of interest, anyone know what proportion of parents pay the fees for their kids these days? Back in my day it was common (but it was only a grand a year) - trying to work out if I should be attempting to keep the amount these days (probably over £100k for 2 kids, once my 3 & 0-year-old reach uni) back or just let them lump it with debt

5lab, no idea but I am saving for my son but wont have enough. I think he'll take the loans and keep any savings I have for a house deposit later. Hopefully he'll not go to uni and I can spend it on me!!!!!

The repayment threshold is currently £25,725 year.

I.e. if you earn £25k/yr after graduation, you won't have to pay back a penny.

You repay 9% of your earnings *above* the threshold. So if you earn £27,725/yr, you pay back 9% of £2k annually - this works out as £15 a month.

As others have said, after 30 years, any unpaid loan is written off at no detriment to the borrower. And if your salary drops - e.g. if you take a career break - your repayments will cease once you drop below the threshold.

It's really nothing to be concerned about. Having a loan, or not repaying it, won't affect your credit score or your ability to get a mortgage.

It’s really nothing to be concerned about

I, as someone who got a grant, heartily disagree!!

As far as the 'end user' is concerned it walks like a tax and quacks like a tax....

Low earners don't pay it, in the same way that (very) low earners don't pay income tax.

I'm 18 years into my Type 1 loan repayments. 'Tax' is a fair analogy; I see the repayment on my payslip each month, I don't notice the loss because I never had it in the first place. At some point in my 40s it'll stop but for now it's not really worth thinking about.

Are the two bundled together as your entire “student loan” when it comes to paying back directly from your salary? As it stands she could be looking at a debt of 60k at 22 years of age

That's about the size of it. Repayments are planned to kick in around £26,500 for the current cohort, so someone on £30K will pay £26 a month. Which won't break the bank, but also won't even cover the interest. (I'm on the old loans so my repayments are higher).

Student debt is one of my bugbears - nurses will have debts they literally can't earn enough to pay off. And medium-high earners have grounds for complaint - George Osborne scrapped the 50p tax because it's not fair on £150K earners to pay 50% marginal tax. But £45K earners born after 1990ish will have a 49% marginal rate for up to 30 years, and due to the way the interest is structured, they might not even be paying back enough to cover the interest. They just kicked the burden down to the younger generation (who didn't have the vote yet) to satisfy the daily mail.

Now it's 10 years down the line, the government of the day are all writing their memoirs or coining it working for Facebook, and we have a ridiculous system where the gov't will soon have lent over £1tn (!), knowing that most of that will never be paid back (!!). What a farce.

Also, it's not a tax.

There are various complicated reasons to do with the government and public accounts, but a key one is - you are obligated to repay your loan even if you move abroad. It's essentially not possible to tax non-doms, so if student loans were reconstituted as a tax, it would create a massive incentive for brain-drain.

Martin Lewis (when he's being a bit more techy) suggests it would be better repositioned as a 'graduate contribution system', not a tax - which is a far more helpful way of looking at it.

, won’t affect your credit score or your ability to get a mortgage.

it won't affect your credit score, but it is taken into consideration for affordability calculations. If you were earning £50k, it has the effect of dropping your income by around 4%. This is taken into consideration by some lenders, and would probably reduce the total amount you can borrow if you're constrained by salary multiple (instead of LTV, or similar).

a ridiculous system where the goverment will have soon lent out over a trillion quid, fully expecting that only a small part of that will actually ever be paid back. What a farce.

Or, it's a well targeted public subsidy in the UK skills base tnat ensures those who benefit the most (in salary terms) from the opportunity provided by student loans contribute the most, and those who don't go onto well-paying jobs are protected from the expense.

it won’t affect your credit score, but it is taken into consideration for affordability calculations. If you were earning £50k, it has the effect of dropping your income by around 4%. This is taken into consideration by some lenders, and would probably reduce the total amount you can borrow if you’re constrained by salary multiple (instead of LTV, or similar

You're right, of course - I meant more that some people are concerned that if they don't repay their loan b/c they don't earn enough it appears as a bad debt (which it doesn't).

Or, it’s a well targeted public subsidy in the UK skills base tnat ensures those who benefit the most (in salary terms) from the opportunity provided by student loans contribute the most, and those who don’t go onto well-paying jobs are protected from the expense.

to an extent. But the highest earners don't pay the most - because they pay off the loan before it has a chance to accrue too much interest. It's the folks on 40-60K that will be paying the most. And I don't think it's fair to impose the same debts on e.g. a nurse - the salary scales for nursing literally don't go high enough to repay the tuition fees. I don't see that as fair.

I've not fully read through the thread but a few comments from my experience;

There was talk about privatising student loans a while back, it's alright saying most wont pay it back but 30 years is a long time and a lot can change.

My brother has since emigrated to Canada, that changes the repayment details. I don't know the full extent but I know it's cost him a lot.

I enjoyed my time at uni but with hindsight I probably would have been better off in an apprenticeship and working up to a degree. I don't feel like I use a lot of my Mech Eng degree, it didn't particularly set me up for a career in industry and practical experience in the work place would have been more beneficial, it has opened doors for interviews though.

to an extent. But the highest earners don’t pay the most – because they pay off the loan before it has a chance to accrue too much interest. It’s the folks on 40-60K that will be paying the most.

Good points. And those from the very wealthiest backgrounds - whose parents' can pay their uni costs up-front - won't make any additional contribution at all. But of course it's not just student loans that face that sort of problem...

I had a student loan in 1992 for my final under graduate year -£600 ish

Me too, was the first year they introduced them IIRC...