If you inherit money, would you have to pay off student loans?

cleanbluesky · 6 Mar 2006 at 22:27

As title...

HEADRAT · 6 Mar 2006 at 22:28

Snip <next time I really need to read the question>

HEADRAT

happytechie · 6 Mar 2006 at 22:30

no, i'm fairly sure the repayment calcultion is 100% on earnings.

but make sure you are earning enough interest on your savings to offset the interest payable on the student loan.

HT

Psyk · 6 Mar 2006 at 22:39

Does winning the lottery count as earnings? If not then you're filthy rich and you don't have to pay the loan back even though you could easily afford it

Stretch · 6 Mar 2006 at 22:41

Don't think so. I inherited some money since finishing uni and still owe my student loan.

Roduga · 6 Mar 2006 at 22:41

If I had any student loans I'd say no. My system is regular income pays for regular bills and debts. Extra income is a gift and therefore should be spent on enjoyable items.

cleanbluesky · 6 Mar 2006 at 22:49

Stretch said:
Don't think so. I inherited some money since finishing uni and still owe my student loan.

Did you have to pay any?

Okay, lets qualify the question a little. Suppose someone owes X amount to student loans, and they inherit 3 or 4 times X... would the government clear the student loan and then give you the money?

Rich_L · 6 Mar 2006 at 22:55

There are no mandatory deductions from inheritance because of your student loan. You can opt to pay it off earlier yourself though with the money you inherit.

However, you loan repayments are based on your income that year - so whilst the inheritance doesn't count as income, if it is pretty substantial then the interest or what you use it for could count as an additional income, in which case the income from that would be added to your salary and then the usual 10% (I think) of anything over £15,000 deduction would apply.

I think that's right anyway

Arcade Fire · 7 Mar 2006 at 00:10

Rich_L is right, from what I remember from a summer working in a personal tax dept. Interest earned is counted as income, and is taxed as such. Therefore your student loan repayment rate would take that into account.

cleanbluesky · 7 Mar 2006 at 09:55

Thanks Rich_L - top banana

thebrasso · 7 Mar 2006 at 10:10

Stretch said:
Don't think so. I inherited some money since finishing uni and still owe my student loan.

Same here.

My student loan wasn't an option, my credit card and burtons card..and getting a car sorted were more pressing issues.

Arcade Fire · 7 Mar 2006 at 10:13

cleanbluesky said:
Thanks Rich_L - top banana

I'm waiting for the story on BBC News - 21 year old kills parents, claims insurance and inheritance, high-tails it to Mozambique to avoid paying student loan...