How long have they been charging us 6.5% on Student loans? 🫣😂

[helping]

Im sure it was 1% when I signed up to take them out in the first place. Tbh I’ve never even thought about it until the last few years. I just see a couple hundred go out of my pay every month.

Got a letter saying I had to log in, because the loan is almost paid and they will overcharge me if I don’t do something? (Why can’t they just take the right amount?) why do I have to log in and do their job. Madness.

Anyway, I scroll to the bottom and notice a 6.5% interest rate.

I realise this is my fault for not chasing this up previously, but how long have they been increasing the interest rates like this?

 

[hall]

@helping The highest I seen mine was 7.3%… I haven’t dared logging in since, absolute madness.

 

[cbmiller]

@hall 7.7% now on Plan 2.

 

[preachermanrkl]

@cbmiller 7.7% on £60,000. Lovely.

 

[enduring_saint]

@preachermanrkl Yeah it’s brutal. Same here except I’m on a wage that I’ll pay it off. Even at 500+ pounds a month it will take 11 years and I’ll pay 30,000 in interest on top.

I’m gonna pay it off as fast as I can.

 

[jmjm]

@enduring_saint Afterwards you you have the joy of a mortgage that will take you 25 to 35 years to pay off!

 

[tjdwns1291]

@enduring_saint You can pay them off early if you're on a high enough salary that it may actually be justified.

It's very debateable if and at what point that becomes worth it. Even if you do save money long term vs interest, you're almost always better off not doing so and having that money to spend on something else like a morgage.

Plan 2s charge tonnes now so most of us are gonna lose out long term, but it's still almost never worth seriously considering paying it off early. Just extra taxes

 

[kurbatskiy]

@tjdwns1291 Do not listen to this and take it for granted.

Do your own calculations.

Everybody always said to me "It's just a graduate tax" but myself and a lot of my cohorts have progressed quite well, to the point we're now all going to pay it off, with interest added, before it's written off.

Not overpaying it would have landed me with 9k of additional interest.

 

[jschutonline]

@kurbatskiy I think it's more that you need to also consider the safety of it. If you lose your job you don't pay anything on the loan, whereas you may default on your mortgage. Therefore, some people would suggest if you did have extra money then paying off your mortgage may be the "better" option. Even if it leaves you financially worse off in some scenarios.

 

[primero]

@jschutonline People who earn high salaries don't tend to have a safety net mentality which is in itself unambitious.

That's not to say the don't need it or things can't go wrong but the type of people who can pay off, won't have that outlook

 

[hall]

@preachermanrkl I think mine started on £42k and now it’s sitting over £60k just a couple of years later. Insane.

 

[hogwash]

@hall I graduated in 2018 with 60k it's about 110k now. I'm never paying it back. I've made my peace with that lol

 

[jacknorth]

@hall Definitely more than a couple of years

 

[gongralia]

@darlene1 Do you think you are earning (salary -26kish) * 9% more than if you hadn't gone to uni? If you do then it is still worthwhile. Just consider it an investment you chose to pay over a long period

 

[darlene1]

@gongralia Apprenticeship and bootcamps are an option (I am a software engineer) would I have probably done it? Maybe not. But if you look at other European countries in none of them do you go 50k in debt just to go uni. It’s just a U.K. thing charging extortionate prices for Uni that only affects the lower income. It stealth tax if you may.

 

[savedsoul2010]

@darlene1 Most Western European countries also have much higher tax burdens, so while you don’t have to pay extra “tax” as a student loan, you do have to pay more actual tax (income or otherwise).

IFS has the U.K. as having a tax take of 33.5% of GDP vs an average of the EU14 of 39.9% (so the tax take is 19% higher)

 

[hall]

@cbmiller Omg stop My loan increases by about £350 a month (for now) and I pay about £50 a month for it. It’s essentially a 9% pay cut for the rest of my life.

 

[barbraa]

@hall Not the rest of your life, it will be written off eventually

 

[rhyssparkerr]

@barbraa 30 years, when you're 50 something. May as well be.

 

[si1]

@barbraa Rest of your working life***