Student Finance loans

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megarain
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My kid is going to a London university in 5 mths.

The local fees are 9k, and student accommodation/maintenance maybe another 20k.

There are loans etc - which most people appear to take.

Even if you have the money, is it advisable to take the loans?

Where would you invest it ? (I would pay the fees/maintenance - so kid will invest the loans)

I have a feeling there is a tax break for under 30's where the UK government give you something, but can't immediately find it.

Thx
LinusP
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100% no, contrary to how they are sold the interest rates are very high on these loans, as interest is taken from day 1 there isn't an opportunity here if you have the cash.
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wearthefoxhat
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There is a yearly maintenance loan they can apply for even if you as a parent are making millions a year. It's around £3.597 (paid over 4 terms) (more if parent not working) There would be an expectation you would contribute to the living costs in this scenario. The alternative, is the student to find a PT job to help towards the living costs.The student loan part is paid directly to the university.

When the course is finished, the student only starts to repay their loans when they earn £25k+ a year. (repay £25 a month) If they earn £50k a year, (repay £50 month) and so on.

I set up my son as an additional card holder on one of my old credit cards for back up.


https://www.gov.uk/student-finance/new- ... e-students
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megarain
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Thx - I saw the maintenance loans.

I was just trying to assess the likelihood of loans being written off by future governments.

Its unlikely, but not 100/1.
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Derek27
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There was a time when students were given non-repayable grants. High-interest loans for people starting out in the working world is quite harsh.
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jamesedwards
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Interest on student loan update https://www.bbc.co.uk/news/education-61088025

Liberal Democrats sometimes talk about cancelling student loan debt and the Green party pledged to do so in 2019 general election. https://www.bbc.co.uk/news/election-2019-50726555.

In reality the cost of write off would be astronomic so I imagine the chances of a future Conservative or Labour government doing so would be very unlikely.
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alexmr2
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It's more like a graduate tax than a loan and I would say the decision mainly comes down to how much they expect to earn in the future.

If they expect to earn a very high salary then they would pay the loan back relatively fast and the educational investment has paid off, not many people fall into this category of earning £40k+ off the bat though.
If they expect to earn an above average salary this is probably the worst group to be in as they are constantly fighting interest and paying the loan meaning they can end up paying 2x back the original amount over their lifetime.
If they expect to earn a normal wage or less then the loan is worth it because it will never be paid back.

Things can always change though, in the current uncertain economic climate it may be worth them just taking the loan regardless

https://www.youtube.com/watch?v=n0LMNhKz9XU


I have a £30k student loan from 6 years of studying engineering (tuition fees are free in Scotland). I don't expect to earn significantly over the threshold (something like £25-27k per year) and intend to find ways around it until it expires when I'm in my 50s
Archery1969
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May sound rather cheeky but you could always send out a blanket letter to various employers asking for funding.

I know someone that did that and got £16,000. It didn’t pay for everything obviously but was a nice chunk out of the overall cost.

The old saying if you don’t ask then……
Tetras
Posts: 144
Joined: Tue Nov 03, 2020 8:23 pm

Archery1969 wrote:
Mon May 16, 2022 5:26 pm
May sound rather cheeky but you could always send out a blanket letter to various employers asking for funding.

I know someone that did that and got £16,000. It didn’t pay for everything obviously but was a nice chunk out of the overall cost.

The old saying if you don’t ask then……
:shock: employers with no personal connection to them whatsoever?
Archery1969
Posts: 1669
Joined: Thu Oct 24, 2019 8:25 am

Tetras wrote:
Mon May 16, 2022 6:41 pm
Archery1969 wrote:
Mon May 16, 2022 5:26 pm
May sound rather cheeky but you could always send out a blanket letter to various employers asking for funding.

I know someone that did that and got £16,000. It didn’t pay for everything obviously but was a nice chunk out of the overall cost.

The old saying if you don’t ask then……
:shock: employers with no personal connection to them whatsoever?
Yep, companies associated with philanthropy.
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wearthefoxhat
Posts: 2635
Joined: Sun Feb 18, 2018 9:55 am

alexmr2 wrote:
Mon May 16, 2022 4:26 pm
It's more like a graduate tax than a loan and I would say the decision mainly comes down to how much they expect to earn in the future.

If they expect to earn a very high salary then they would pay the loan back relatively fast and the educational investment has paid off, not many people fall into this category of earning £40k+ off the bat though.
If they expect to earn an above average salary this is probably the worst group to be in as they are constantly fighting interest and paying the loan meaning they can end up paying 2x back the original amount over their lifetime.
If they expect to earn a normal wage or less then the loan is worth it because it will never be paid back.

Things can always change though, in the current uncertain economic climate it may be worth them just taking the loan regardless

https://www.youtube.com/watch?v=n0LMNhKz9XU


I have a £30k student loan from 6 years of studying engineering (tuition fees are free in Scotland). I don't expect to earn significantly over the threshold (something like £25-27k per year) and intend to find ways around it until it expires when I'm in my 50s
Yep, forgot to add any balance gets written off when a student reaches 50.
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Crazyskier
Posts: 920
Joined: Sat Feb 06, 2016 6:36 pm

alexmr2 wrote:
Mon May 16, 2022 4:26 pm
It's more like a graduate tax than a loan and I would say the decision mainly comes down to how much they expect to earn in the future.

If they expect to earn a very high salary then they would pay the loan back relatively fast and the educational investment has paid off, not many people fall into this category of earning £40k+ off the bat though.
If they expect to earn an above average salary this is probably the worst group to be in as they are constantly fighting interest and paying the loan meaning they can end up paying 2x back the original amount over their lifetime.
If they expect to earn a normal wage or less then the loan is worth it because it will never be paid back.

Things can always change though, in the current uncertain economic climate it may be worth them just taking the loan regardless

https://www.youtube.com/watch?v=n0LMNhKz9XU


I have a £30k student loan from 6 years of studying engineering (tuition fees are free in Scotland). I don't expect to earn significantly over the threshold (something like £25-27k per year) and intend to find ways around it until it expires when I'm in my 50s
...In other words, deceiving the tax-payers that funded you? Interesting.

CS
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wearthefoxhat
Posts: 2635
Joined: Sun Feb 18, 2018 9:55 am

Crazyskier wrote:
Tue May 17, 2022 12:56 pm
alexmr2 wrote:
Mon May 16, 2022 4:26 pm
It's more like a graduate tax than a loan and I would say the decision mainly comes down to how much they expect to earn in the future.

If they expect to earn a very high salary then they would pay the loan back relatively fast and the educational investment has paid off, not many people fall into this category of earning £40k+ off the bat though.
If they expect to earn an above average salary this is probably the worst group to be in as they are constantly fighting interest and paying the loan meaning they can end up paying 2x back the original amount over their lifetime.
If they expect to earn a normal wage or less then the loan is worth it because it will never be paid back.

Things can always change though, in the current uncertain economic climate it may be worth them just taking the loan regardless

https://www.youtube.com/watch?v=n0LMNhKz9XU


I have a £30k student loan from 6 years of studying engineering (tuition fees are free in Scotland). I don't expect to earn significantly over the threshold (something like £25-27k per year) and intend to find ways around it until it expires when I'm in my 50s
...In other words, deceiving the tax-payers that funded you? Interesting.

CS

The earning power will depend very much on the type of degree.

If it's a tech/computer science degree, then you should be able to command £60k/£75k salary without too much difficulty.

If it's;

degree.png
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megarain
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Thx for the answers.

Its an interesting insight into the job market etc.

He has secured a 6 mth job helping to admin the computer systems for Exhibition centers like Olympia. About 25k a yr, plus exps.

Hes doing a 4 yr computer science course, so I expect he will get the big bucks, if he wants it.

The Lifetime ISA appears to allow you to pay in 4k a yr if your are under 40, and the Uk govt gives u a 25% bonus (up to 1k a yr).

There are restrictions on withdrawals etc, but seems a decent way for a kid to start investing. (Buy a S&P ETF, and leave it)
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