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Studend Debt Isn't Really Debt According To A Vi This Morning

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Watched BBC breakfast this morning talking about student loans and the VI representing the Russell group university's said that the loans shouldn't be seen as debt, more of a tax and that the loans had no real interest as it was linked to inflation.

Even better she then went on to say that at £15k you only then have to start repaying the loan back.

A mate of mine had one of these loans and I'm sure he said that the basic amount you start paying at this level barely covers the interest, so in effect it's like making the minimum payment on a credit card.

As usual the in depth interviewers failed to pick up on any of this.

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It isn't debt, it is an investment. Actually, it used to be, not now in many cases, it is just debt folks!

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Good one. Go and tell those muppets with a degree in Surfology or Big Brother that their 30k of debt are an investment, a bit like a mortgage...

They won't even notice the payment when they land the 15,200£ Sales Manager's job at Primark

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Watched BBC breakfast this morning talking about student loans and the VI representing the Russell group university's said that the loans shouldn't be seen as debt, more of a tax and that the loans had no real interest as it was linked to inflation.

If they wanted it to be seen as a tax they could perhaps have made it a tax. Instead of finding the only possible way to get the private sector involved at the expense of those least able to afford uni.

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It's true that the normal repayment (9% of gross income after the first £15k) will for many people cover only the interest or not even that. If RPI is 2% and you have a student debt of £10k, your debt will go up by £200 and you need to be earning at least £17,222 just to keep the debt the same in nominal terms. When RPI was 3.8% recently, you needed to be earning at least £19,222 - and that was just to keep the debt from (nominally) growing! For a £20k debt, you needed to be earning £23,444 that year and paid £760 just to end up with the same debt as last year. It just shows you the power of interest rates, even low ones.

Edited by bearly legal

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Do a degree, take every loan and credit card you are offered, go bankrupt at the end. Rinse and repeat.

sadly going bankrupt doesnt clear a student loan.

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sadly going bankrupt doesnt clear a student loan.

True, and even the Dignitas solution will set you back £4k plus change.

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sadly going bankrupt doesnt clear a student loan.

You could probably take out a normal loan and use it to pay off the student loan. Mind you, the kind of person who does that and the kind of person who goes mad with credit cards and then bankrupt don't really match.

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It's true that the normal repayment (9% of gross income after the first £15k) will for many people cover only the interest or not even that. If RPI is 2% and you have a student debt of £10k, your debt will go up by £200 and you need to be earning at least £17,222 just to keep the debt the same in nominal terms. When RPI was 3.8% recently, you needed to be earning at least £19,222 - and that was just to keep the debt from (nominally) growing! For a £20k debt, you needed to be earning £23,444 that year and paid £760 just to end up with the same debt as last year. It just shows you the power of interest rates, even low ones.

Very true and its amazing how few students actually realise this. Mine was a pre 1998 loan, which just meant the total you owed was divided up over 3 or 5 years depending how many loans you had taken out and that was it, paid off. But chatting with a few of my younger brother's mates who have the post 1998 scheme, as above and they simply don't realising just how badly they are being shafted by it. A number are earning less than the 'tread water' amount and so are paying towards it, yet their debt is getting bigger!

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But... but.... according to many posters on the most popular thread of recent days, all graduates should be starting on 25K and swiftly moving up to salaries of 50K plus, so all this is no problem? Shurely shome mishtake?

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sadly going bankrupt doesnt clear a student loan.

You can probably get another loan to clear it first, but that's another sign that a student loan is a tax!

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for mortgage applications SL is excluded from calculations because it isn't a real debt

I know it isnt supposed now but when I was looking for a mortgage soon after I finished University the lender (one of the big highstreet names) did take it (and my repayments for it) into account.

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Life will soon begin at 50 (when the debt is written off)! :lol:

The only ways out:

As has been posted on here, is to take out credit cards pay student loan and then declare your self bankrupt.

You can also leave the country (preferably running up thousands of pounds of debt before you go).

You could start your own company, and take £14,999 as a salary (until you reach 50) and then retire into the sunset. Better still take a smaller salary and claim working tax credits. ;)

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But... but.... according to many posters on the most popular thread of recent days, all graduates should be starting on 25K and swiftly moving up to salaries of 50K plus, so all this is no problem? Shurely shome mishtake?

Ah., once again misquoting. what I said was that all grads should, after 10 years in their chosen profession, earn over £30k, but don't let facts get in the way of a good old guffaw.

Pre 1999 loans are actualy not acruing interest this year, and I'd say next year as well. Also, if you make it to 50, the debt gets wiped aparently. So good for mature students.

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Life will soon begin at 50 (when the debt is written off)! :lol:

The only ways out:

As has been posted on here, is to take out credit cards pay student loan and then declare your self bankrupt.

You can also leave the country (preferably running up thousands of pounds of debt before you go).

You could start your own company, and take £14,999 as a salary (until you reach 50) and then retire into the sunset. Better still take a smaller salary and claim working tax credits. ;)

;)

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Student debt isn't just debt, it is the mechanism by which the following generation is loaded down with obligations to support the previous generation.

Excess credit for house purchase seems to serve the same purpose.

I wonder if the next generation will implement a nursey-school loans policy. Or how about a pre-conception loan?

VMR.

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