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Thread: Student loans

  1. #1
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    Student loans

    With one of the kids probably going to University next year I wanted to get up to speed with student loans and what the options may be these days.
    Are there different types; are they means tested; do parents need to apply or all via the student?

    Anyone been through this recently and is happy to share their experience and insights would be great.
    Thanks

  2. #2
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    Haven’t done this for a few years but pretty sure it hasn’t changed
    It’s parent means tested- there was a portal where parents filled in their income/ monetary details etc
    As our household income on both occasions was below £43k both my 2 received full student loans for tuition and accommodation
    If it’s your 1st at uni they used to get a ‘free’ bursary too - I think around £1.5k
    Both mine are ‘working their way’ through their £50k debt
    I’m sure someone with newer knowledge will have some better input- good luck

  3. #3
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    Mine have just both finished - thank god. They apply and it is two parts, the tuition fees that get paid directly to the university and then the cost of living part which is the means tested bit. I believe if parental income is below a certain point you can apply for a higher figure for cost of living but of course that is a higher loan. In reality the cost of living hardly covers the accommodation costs now. So you as a parent are left to pick up the slack otherwise they will have loans outside of the student finance system that have much more onerous pay back conditions i.e. a bank loan. Just look on it as an additional income tax that they may never pay anyway (as it stands) if their salary is low enough. As a note if they enter a course which is a BSc-Msc (i.e they only graduate once with the MSc) then the loan covers that as a single loan. If they do a BSc that graduates then do a MSc it is a different loan of around £10.25K per annum that has to pay for their fees and living. Often universities will give a discount for doing the MSc at the Uni they did the BSc of 20% which makes a big difference. As with any internet advice check the current status of what I have written :-)
    Last edited by reecie; 25th November 2021 at 18:19.

  4. #4
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    I remember the stepsons loan only covered his rent in term time we had to pay rent for all the holidays for his private rented student hovel and it cost a lot

  5. #5
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    Think reecie is correct.
    Mine is in his third year. Tuition is always paid in full and the rest is means tested. His rent in shared house is £438pm which we pay. Think he gets around £4.5k for living expenses as a loan (think the max in addition to the tuition fees is around £8k).
    He’s doing his Masters next year and I believe on tuition fees are payable.

  6. #6
    Proper scandal

    The govt gets 17/18 year olds to sign their life away with these loans. When loans were introduced, the interest was v low. Now it's towards 6% I believe, accrued from the day your first loan cheque is issued. Not unusual for London graduates to have 70k of debt when they graduate at 21.

  7. #7
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    Quote Originally Posted by Snowdon View Post
    Proper scandal

    The govt gets 17/18 year olds to sign their life away with these loans. When loans were introduced, the interest was v low. Now it's towards 6% I believe, accrued from the day your first loan cheque is issued. Not unusual for London graduates to have 70k of debt when they graduate at 21.
    That's a shockingly high rate of interest if correct given where we've been ever since 07/08.

  8. #8
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    Quote Originally Posted by Snowdon View Post
    Proper scandal

    The govt gets 17/18 year olds to sign their life away with these loans. When loans were introduced, the interest was v low. Now it's towards 6% I believe, accrued from the day your first loan cheque is issued. Not unusual for London graduates to have 70k of debt when they graduate at 21.

    The interest rate quoted above doesn't seem quite right? https://www.gov.uk/repaying-your-stu...n/what-you-pay

  9. #9
    Quote Originally Posted by Snowdon View Post
    Proper scandal

    The govt gets 17/18 year olds to sign their life away with these loans. When loans were introduced, the interest was v low. Now it's towards 6% I believe, accrued from the day your first loan cheque is issued. Not unusual for London graduates to have 70k of debt when they graduate at 21.
    https://www.theguardian.com/educatio...and-is-189700?

    ‘Interviewees felt that the 5.6% interest rate was too high and unfair, and worried about the government’s ability to change repayment terms retrospectively, which could result in unmanageable payments. For instance, at the moment repayments do not start until a graduate earns £27,000 but there are reports this could be cut to £23,000. One graduate said they felt they were “moving one step forward and then two steps back”.’

  10. #10
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    I did my degree after spending many years in industry. I found the whole university experience to be an absolute farce. My degree could have been done in half the time if the educational establishments followed industry standards. Far too much timewasting by lazy students and college staff, who seemed more interested in pleasureseeking than education! I didn't even bother to attend the degree "ceremony" and had mine posted to me. I worked from home and commuted sixty miles a day, rather than take out loans to line the pockets of unscrupulous landlords (housing and pubs!). I was always first into lectures too! Most of the lecturers were late or missing! My course had many ex industry students and we couldn't believe how much time was just wasted! If they started at 8 and finished at 4.30, took "normal" holidays etc., course times could be halved!

  11. #11
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    It’s always worth remembering that educating the students is a necessary evil and secondary to the lucrative research work paid for by the universitys’ private clients.

  12. #12
    Quote Originally Posted by tixntox View Post
    I did my degree after spending many years in industry. I found the whole university experience to be an absolute farce. My degree could have been done in half the time if the educational establishments followed industry standards. Far too much timewasting by lazy students and college staff, who seemed more interested in pleasureseeking than education! I didn't even bother to attend the degree "ceremony" and had mine posted to me. I worked from home and commuted sixty miles a day, rather than take out loans to line the pockets of unscrupulous landlords (housing and pubs!). I was always first into lectures too! Most of the lecturers were late or missing! My course had many ex industry students and we couldn't believe how much time was just wasted! If they started at 8 and finished at 4.30, took "normal" holidays etc., course times could be halved!
    I did mine with the Open Uni!

  13. #13
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    Quote Originally Posted by dougair View Post
    I did mine with the Open Uni!
    I didn’t bother at all. Too many taking meaningless degrees and then go on to have careers with no relevance to what they have studied.

  14. #14
    Quote Originally Posted by craig1912 View Post
    I didn’t bother at all. Too many taking meaningless degrees and then go on to have careers with no relevance to what they have studied.
    Define ‘meaningless’ I enjoyed the activity of learning the subject. I did it for interest rather than career…although it is relevant to my career it hasn’t allowed me to progress any quicker.

  15. #15

  16. #16
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    Thanks all. Really useful, have a better idea of the system and process now.

  17. #17
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    Quote Originally Posted by dougair View Post
    Define ‘meaningless’ I enjoyed the activity of learning the subject. I did it for interest rather than career…although it is relevant to my career it hasn’t allowed me to progress any quicker.
    No issue with that. But many students think they “have” to go to University, when in reality they would be better off getting a job and or apprenticeship.

  18. #18
    Quote Originally Posted by craig1912 View Post
    Think reecie is correct.
    Mine is in his third year. Tuition is always paid in full and the rest is means tested. His rent in shared house is £438pm which we pay. Think he gets around £4.5k for living expenses as a loan (think the max in addition to the tuition fees is around £8k).
    He’s doing his Masters next year and I believe on tuition fees are payable.
    Be wary. Postgraduate student finance is £11,570. That is supposed to cover tuition and living expenses. The trouble is for a heck of a lot of masters the tuition fees alone are well over £11,570. For example a masters in finance in Manchester has a tuition fee of £20,000.

  19. #19
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    Quote Originally Posted by rasputin View Post
    Be wary. Postgraduate student finance is £11,570. That is supposed to cover tuition and living expenses. The trouble is for a heck of a lot of masters the tuition fees alone are well over £11,570. For example a masters in finance in Manchester has a tuition fee of £20,000.
    Thanks I didn’t realise that. He was accepted for his Masters today (for next year) I’ll check the fees with him as I’m already resigned to paying his rent.

  20. #20
    Quote Originally Posted by craig1912 View Post
    Thanks I didn’t realise that. He was accepted for his Masters today (for next year) I’ll check the fees with him as I’m already resigned to paying his rent.
    It’s shocking really. We were lucky enough to afford to put our son through his masters, but postgraduate education is effectively shut off for bright kids from a poorer background.

  21. #21
    Student loans are RPI+3% at least while at Uni, and after Uni if you earn a certain amount.

    Given RPI is now 6%, the loans are going to be 9% very soon.

    Even if you are a high earner after Uni, you are going to be saddled with debt forever.

    9% debt when interest rates are 0.1% is criminal. I’m surprised the students are not rioting

  22. #22
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    Quote Originally Posted by noTAGlove View Post
    Student loans are RPI+3% at least while at Uni, and after Uni if you earn a certain amount.

    Given RPI is now 6%, the loans are going to be 9% very soon.

    Even if you are a high earner after Uni, you are going to be saddled with debt forever.

    9% debt when interest rates are 0.1% is criminal. I’m surprised the students are not rioting
    What is the interest rate cap?
    The Department for Education monitors interest rates set by commercial banks using monthly data provided by the Bank of England.

    If the average commercial interest rate is lower than the interest rate you’re being charged on your Plan 2 loan, we’ll apply a temporary interest rate cap, so you’re not disadvantaged. The interest rate will be reviewed after 3 months and changed if necessary.

    The current interest rate is capped at 4.1%.

  23. #23
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    Quote Originally Posted by reecie View Post
    Just look on it as an additional income tax that they may never pay anyway (as it stands) if their salary is low enough.
    I’d question why bother going if you can’t earn £27k at any point after


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