Student Loans....do they make any sense?

[ScienceBoy]

You mean the old system worked out brilliantly for you!

15 years ago fees would have been £1,000/year? With a current interest rate of 1.25%.

Students graduating today would have at least 9 times as much debt. And at 5x the interest rate. A scary proposition.

Very true, the modern figures are scary!

Mine was a lot more than 1k a year but nothing like today's numbers.

 

[SocketRocket]

on what basis do they justify interest rates of 6% when base rates are 0.5%, when we had them they were at very low rates relative to base rate (i think 1.9% when interest rates were higher) which ultimately made them affordable and meant i was able to pay mine off pretty quickly

Can you get a loan anywhere (other than the bank of mum and dad) at 0.5%. To loan something like £27,000 over around 4 years you would easily be paying over 6% interest, let alone over a protracted period.

 

[Raesy92]

I don't understand how you can count borrowed money as "savings". You haven't saved up at all, you've borrowed money and now have debt.

My daughter won't be doing anything like that.

I'm pretty sure your daughter will need a mortgage at some time in the future, unless she is fortunate you are going to pay for that as well.

It may well be borrowed money, however it will be the best loan you will ever be able to receive in your life so why not take advantage of that? Your daughter could be walking away with almost 20k, in what is an extremely low interest rate loan, which she only has to start paying back once she starts earning a substantial salary.

 

[ger147]

I'm pretty sure your daughter will need a mortgage at some time in the future, unless she is fortunate you are going to pay for that as well.

It may well be borrowed money, however it will be the best loan you will ever be able to receive in your life so why not take advantage of that? Your daughter could be walking away with almost 20k, in what is an extremely low interest rate loan, which she only has to start paying back once she starts earning a substantial salary.

At least we now agree that it's debt, and as I said above I'll do everything I can to give her the best start in life and I don't think starting out with a massive debt is the way to go.

Each to their own but it's not for me.

 

[Raesy92]

At least we now agree that it's debt, and as I said above I'll do everything I can to give her the best start in life and I don't think starting out with a massive debt is the way to go.

Each to their own but it's not for me.

No worries mate, just trying to offer some advice but that's all it is.

This website ... http://university.which.co.uk/advic...ees-and-finance-if-youre-studying-in-scotland helps to explain it quite simply, and ultimately you only basically repay what you have lent. So it is essentially interest free.

 

[ger147]

No worries mate, just trying to offer some advice but that's all it is.

This website ... http://university.which.co.uk/advic...ees-and-finance-if-youre-studying-in-scotland helps to explain it quite simply, and ultimately you only basically repay what you have lent. So it is essentially interest free.

I know how it works and it's not interest free.