Uni debt... how much and are you worried?

I was in the last set of students to get the ~£1200 per year fees before they went up over £3000. Lucky. :D

My student debt only came to £11000 and I've already paid it off.
 
I think mine is about £16k now... it was about £18k before (4 years x £4k/year, plus a little interest over the time).

The way to look at it isn't debt, but really just an extra few percent on your income tax.
 
I have an £8k Uni loan outstanding - although I graduated in 2005 and back then Uni fees were only £1k per year, not the (£3k) national students have to pay at the moment (re-bloody-diculous).

FYI incase you didn't know, our debts are SHRINKING:

http://www.moneysavingexpert.com/loans/student-loans-repay

It is the absolute best "loan" you will ever get in your lifetime - DO NOT pay it off unless you can afford to do so i.e. you own a family house completely paid off and you're living a cushty life. The student loan doesn't affect applications for other loans, it is the lowest rate out there for loans of £8K+, in fact its the best loan out there except for parents!.

If you start paying off £££s after you get your first job over and above the minimum taken from your wages each month, you will be kicking yourself around the time you start planning that big-ass wedding or looking at getting your own lovenest.

And if you consider state pension (laugh, anyone?) will be ground to the dust by the time we retire, you're better off saving for an early retirement if the £10k+ wedding or £300k family house aren't of interest to you!

PS: Just don't worry about it, even though I know thats hard because its the biggest debt you have right now and you feel "dirty" for being in debt (I felt the same way!). Once you've been in the working world a couple of years and (older) age starts creeping up on you along with all the other milestones and much more serious expenditure (which comes with serious penalties for not meeting repayments - think repossession/getting booted by the landlord/getting red bills!) - you will realise that the student loan is nothing to worry about.
 
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Graduated in 2008 with £14k debt.

Whilst its at 0% I'm saving to pay off half of it come next September. Should make a small amount from the interest in a savings account that way, although its likely to be a pittance.
 
Ciba said:
Graduated in 2008 with £14k debt.

Whilst its at 0% I'm saving to pay off half of it come next September. Should make a small amount from the interest in a savings account that way, although its likely to be a pittance.
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Where on earth do people get the 0% interest from? It might be while you're studying but dont be naive enough to think theres not interest after you finish your studies.
 
"Around 400,000 outstanding student loans held by 20 and 30-somethings are shrinking. This is because, from 1 September 2009, the interest rate on these loans became negative - so you'll owe less next August than you do right now - and millions more have become interest free."

"Every September the SLC’s annual interest rates (see the Interest Rates For Beginners guide) for the next academic year are set. These are based on the inflation rate - which measures how quickly prices are rising - for the previous March.

The specific inflation rate used for student loans is the Retail Price Index (RPI). This includes the cost of mortgages, and as UK base rates had been slashed to a historic low, March 2009’s inflation was at MINUS 0.4%, meaning average prices over the previous year were falling - called deflation.

Due to this, loan costs for those who started higher education before 1998 are now MINUS 0.4% for the next year too. That means if you owe £10,000 in September and repay nothing, it'll still shrink to £9,960 in August. For everyone else, student loans are becoming interest free (0% interest).

Why are the two loans set at different rates?

In our opinion, the answer is quite simply because the Government has failed to honour its pledge to holders of the new type of loan.

While interest-free loans sound great, actually you've been diddled. This March's inflation was -0.4% (deflation) so the interest rate should drop to that for ALL loans. However the Government used a technicality and created a new clause preventing 1998-onward loans from matching deflation (read more about post-1998 loan rate ).

Student loans have always been set using inflation and while 0% loans sound cheap, it means former students' purchasing power is being eroded, as with deflation (prices dropping) loans costs should be shrinking by the same rate.

Financially, the impact’s small: even on a £10,000 loan, it’s only £40/year difference. But the real concern’s the principle. Now we’ve slightly uncoupled ‘inflation’ and ‘student-loan interest’ who knows where it’ll go in the future?"

See the link I posted above.
 
peetee said:
Where on earth do people get the 0% interest from? It might be while you're studying but dont be naive enough to think theres not interest after you finish your studies.
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No, the interest rate is set at inflation. The interest rate is currently 0%, but it should actually be -0.4%
 
Ok, i got it wrong, they are interest free, its the inflation you pay, not the interest.

But if the inflation is negative it doesnt mean the loan shrinks for the majority of us, as we are part of the new loan scheme, we're not really being diddled though are we..
Its current interest rate is 0%, but do we expect inflation to be in the minuses forever? No. It will be positive again someday, and then we will be paying interest again.

Dont get me wrong, its a brilliant loan, but only if you're using it for something worthwhile, if you're going to waste it then you're getting in needless debt, and you will be paying interest on it, just because currently people are not doesnt mean it will stay that way forever.
 
peetee said:
But if the inflation is negative it doesnt mean the loan shrinks for the majority of us, as we are part of the new loan scheme, we're not really being diddled though are we..
Its current interest rate is 0%, but do we expect inflation to be in the minuses forever? No. It will be positive again someday, and then we will be paying interest again.

Dont get me wrong, its a brilliant loan, but only if you're using it for something worthwhile, if you're going to waste it then you're getting in needless debt, and you will be paying interest on it, just because currently people are not doesnt mean it will stay that way forever.
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But the good point being that it IS at 0%, although this is obviously more exciting for people who've had their student loans a while (oooooh!) ;)

I think the majority of people have student loans because they have needed them to pay for tuition and rent, not because they've been spending it willy nilly. Paying it back is absolutely the sillyest idea since it is the best loan you will ever get in your life barring your parents! Unless you are filthy rich of course, or have parents willing to fund you your entire adulthood, then it makes good sense. ;)
 
peetee said:
Ok, i got it wrong, they are interest free, its the inflation you pay, not the interest.

But if the inflation is negative it doesnt mean the loan shrinks for the majority of us, as we are part of the new loan scheme, we're not really being diddled though are we..
Its current interest rate is 0%, but do we expect inflation to be in the minuses forever? No. It will be positive again someday, and then we will be paying interest again.

Dont get me wrong, its a brilliant loan, but only if you're using it for something worthwhile, if you're going to waste it then you're getting in needless debt, and you will be paying interest on it, just because currently people are not doesnt mean it will stay that way forever.
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But interest at the rate of inflation is meangingless. Any saving account in the world will pay you more interest than what you will loose on the lone.
IF you have a spare 2K to pay off some of the loan you are much better off putting it in a standard savings account. If you can afford an extra £100 a month to pay off the loan you are much better off putting it into a savings account.

There is just no logical reason at all why you would try to pay it back faster than you have to. If you win the lottery then fine, you can pay it off merely to state you are debt free. However, financially, even if you won 100 million £ you are better off not paying the loan.
 
As a break down, I have a ~12k loan. At least 1-2K is interest (nad since it is inflationationary interest can be ignored). 2K was from an illegal Gradute endowment they have since stopped. And I recieved a little over 8.5K in loans. I spent about 5K for living costs. So I got about 2.5K free loan which I didn't need. This sat in my ING earning interest so actually I was paying back the loan by doing nothing but letting the excess earn interest higher than the loan rate. By not paying back the loan over the last few years i've earned a decent wad of cash. I also have the startings of a deposit for a house that can give me lower mortgage rates. Its a win win situation.
 
peetee said:
im not saying pay it back, im saying get the extreme minimum you can get away with to start with.
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Why? what is the advantge?

The more loan you get over what you require the more money you can throw in a savings accoutn or put down as a deporit for a mortgage lowering you morgae payments.

The amount of money you repay on your loan is based on monthly pay not on the loan amount. The costs don't change depending on loan size.
 
Finished uni in 2001, got a letter through this week saying that my debt was now only £149!
However that was from April, so it appears I've been paying £150-200 a month since then. So now I'm due a 4-5 months of payments back (plus I expect I'll still be paying out of Septembers pay packet.) A nice rebate of around £800 or so will be nice!
 
Chris1712 said:
I'm guessing going to end up with 20-25k at the end.

Not that fussed tbh, at the end of the day its pretty cheap money and you'll never pay it back anyway. The minimum repayment barely covers the interest last time I checked?

EDIT: Scrap that, the interest it 0% or even negative for some people currently. I don't see how its worth paying more than the minimum aslong as savings accounts offer higher interest than the loan costs.
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peetee said:
im not saying pay it back, im saying get the extreme minimum you can get away with to start with.
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Thats not the attitude, no wonder kids are getting in debt, you have to pay your way in life.

You are no different then then the long term unemployed.
 
peetee said:
im not saying pay it back, im saying get the extreme minimum you can get away with to start with.
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That would only make sense if RPI was a lot higher than interest rates - it isn't!

At the moment the opposite of what you say is true, students should be taking out the maximum loan available, even if they have £30k in the bank.

You talk about the rate going up in future when inflation rises, which is true, but if a situation ever arises where RPI > net interest rate on savings, you just pay it back, simple. Difference being, you'll have pocketed a wedge of interest in the meantime. Don't forget that you get about 5 months warning of any changes to SLC interest rate when the RPI figure for March is announced in April each year.
 
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