Retrospectively Raising Student Loans What The Funicular!!!

[RATTER15]

https://www.facebook.com/279110982277106/videos/536031656585036/

If I'm understanding this correctly; it should be illegal!

[tamborine]

Agree, illegal to alter a loan agreement retrospectively but interest rates can change with notice.

[THECORBYLOON]

I fon't know the wording 9f the sudden loan contract but as I understand it, the loan is repayable only after earnings are more than £21,000 each year. Cameron did promise that figure would rise each year from 2017 but unless that was stated in the contract as opposed to a party's aspiration, I doubt whether any challenge can be made.

[Togo]

It should not happen! Although I wonder if the students who graduate, and go on to contribute to the UK economy and subsequently pay off their loans as agreed, are picking up the tab for the "foreign" students who promptly disappear off the radar on graduation?

[fiction-factory]

>" I wonder if the students who graduate, and go on to contribute to the UK economy and subsequently pay off their loans as agreed, are picking up the tab for the "foreign" students who promptly disappear off the radar on graduation?"

No- students repay a fixed percentage of any income beyond the threshold until such time as their loan value (plus accrued interest) is repaid- although most never have to pay have to back the full amount

[fiction-factory]

Osborne's change was unwise, unfair and unnecessary but fortunately at this stage it doesn't make much difference to the amount that has to be repaid- perhaps around £1 a week although the amount will grow over the coming years if the threshold remains frozen while wages increase.
Despite all Martin Lewis's best efforts many people, including students and parents, misunderstand how student loans work. Maybe the term Loan should be abolished and the funding should be renamed as something like Better-off Graduates' Supplementary Income Tax

[Peter Pedant]

for those not on FB ( me ) here is a guardian link
http://www.theguardian.com/education/2015/nov/25/osborne-student-loan-tuition-fees-university-higher-education-autumn-statement

erm when interest rates rise - the debtors not surprisingly squawk ....as they have to pay more.

BUT boys and girls when the govt intervenes in a market - there is always money to be made....
the loans are such a good deal that even the rich kidz shouldbe taking them out. I mean a lot of the time it is 0% interest and a trigger at £21k before you start repayment

Isnt the number of peope who have repaid fully their student loans, as high as zero per cent of those taking them out ? Much better than an overdraft

the only downside is that it teaches young people that debt is Good when a lot of the time, [bar mortgages ( when debt is still Good )]
Debt is Bad

[Peter Pedant]

agree FF

[Peter Pedant]

oh yeah and if you havent repaid after so many years
then the debt is written off ....

or is that now not the rule ?

can I have a mortgage like that please ?

[Togo]

My daughter finished paying the full amount of her student loan off this January, after working hard for almost 5 years to do so! PP she does not and did not squawk, but she would surely make you do so if she had the opportunity, for tarring her, the ones like her, with your sarcasm brush.

[fiction-factory]

Good news, Togo. Did she repay just from income or was a large lump sum payment also made. If it was the full student loan and was all paid by deductions from earnings she must have been earning a six figure salary, Togo. She must have been on the old scheme when fees were £3000 a year

[Cloverjo]

Surely, he can't change the rules like that. My son signed a contract when he made use of his student loan. I'd assumed the government's was implicit in that agreement.

[Togo]

FF she paid the whole amount off, I think the total when she started paid employment was in the region of £15k to £16k. She certainly wasn't on a six figure salary to start with but did set up a dd to clear it. She also worked during her student days, bar work, events work, college mentoring for new intake etc etc., to keep the total down. She has always been the straight A girl and is formidable. One of the few people on Earth that I would not want to argue with, haha. Neither a shrinking violet nor a bully, so proud of her.

[fiction-factory]

Mosts students never have to pay anything close to the full amount.

For a typical student loan of approx £40000 a typical graduate will never repay it. Using rounded figures a graduate lucky enough to be earning circa £28000pa will pay 9% on £7000 each year, so that's £630 a year. At that rate it would take them 60 years (and that's even before allowing for interest)- but of course the debt is written off after only 30 years.
Thanks for the info , TOGO.

Most students never come close to paying off the full amount.

I agree with Martin Lewis who advises against paying off student loans by DD in addition to the mandatory income based repayments. I would not repay something when the alternative is to probably never have to pay it back.

I agree that it seems wrong, Cloverjo. The change means though that the threshold this year will remain at £21000 instead of being increased in line with wages to around £21400- so students over the threshold will repay an extra 9% of £400 = £36 a year

[fiction-factory]

My "Thanks for the info , TOGO." should have been at the start of that reply- don't know how it jumped into the middle

[Cloverjo]

Thanks, fiction-factory. I should be able to do the sums myself, but am grateful to you. My son will find the extra £36, I'm sure.
It still feels wrong that they can do this, though.

[fiction-factory]

If his earnings go up each year and the threshold is fixed at £21000 he will find it's costing him more each year, Cloverjo.
I don't understand why Osborne did it.

[Cloverjo]

What a *****. (I put my own asterisks in).

[Togo]

You only needed 4 asterisks Cloverjo (^_*)