Jump to content
House Price Crash Forum
Aquaman

Student Loan Debt

Recommended Posts

I took out a loan in 2007. I expect along with many others I didn't even have a clue what the terms were, I was just brainwashed into taking a degree and therefore a loan.

I did a 4 year degree and now have debt of around 30k. This is more than my entire family has in savings. It is rising at some ridiculous rate of inflation.

In the event of hyper inflation, what is going to happen to my debt?

I'm getting really worried about the situation as I dont ever see myself paying it off. I may end up going abroad and part of the reason is I feel like running away from it all.

Share this post


Link to post
Share on other sites

I took out a loan in 2007. I expect along with many others I didn't even have a clue what the terms were, I was just brainwashed into taking a degree and therefore a loan.

I did a 4 year degree and now have debt of around 30k. This is more than my entire family has in savings. It is rising at some ridiculous rate of inflation.

In the event of hyper inflation, what is going to happen to my debt?

I'm getting really worried about the situation as I dont ever see myself paying it off. I may end up going abroad and part of the reason is I feel like running away from it all.

Here's hoping your degree wasn't in Economics :lol:

Share this post


Link to post
Share on other sites

Student debt is horrid, and it is only going to get worse it seems.

The interest is compounding, so if we have hyperinflation and the student loans company decided that the interest rate they charged was 15%, they you you have 15% added to your bill. Hopefully your income should also rise per year at a similar rate, otherwise food becomes far more of an issue than debt!

So what are your options....

1) Pay the debt via PAYE only if you are over the threshold limits... you may pay it off before you retire, if your income is high enough, but generally not worry about it. It doesn't affect your credit score, and basically becomes an additional tax burden to you.

2) Manage it yourself, and opt out of PAYE - If you believe you stand a chance of paying it off within a fixed time frame, go down this route. The link between the tax man and the student loans company is truly awful.

moneysavingexpert has a whole bunch of articles on the subject.

*cough*

just a side note, slc loans stay with you regardless of bankrupcy etc.. personal debt doesn't, I'm not saying rob peter to pay paul, but paul has no recourse against peter, if you give him all your money first.... but... stick to the law, and try not to commit fraud...

Share this post


Link to post
Share on other sites

Govt legislation will kick in after the event, after the hyperinflation of Germany mortgages got reset to 15% of there original value.

You'll pay the debt off before it compounds too badly, the terms are set yearly so as long as wages keep just behind inflation you'll be able to pay if off with money you find left in the street because it's worthless.

Although in this type of environment as noted you'll be more concerned over food than debt.

Edited by interestrateripoff

Share this post


Link to post
Share on other sites

I took out a loan in 2007. I expect along with many others I didn't even have a clue what the terms were, I was just brainwashed into taking a degree and therefore a loan.

I did a 4 year degree and now have debt of around 30k. This is more than my entire family has in savings. It is rising at some ridiculous rate of inflation.

In the event of hyper inflation, what is going to happen to my debt?

I'm getting really worried about the situation as I dont ever see myself paying it off. I may end up going abroad and part of the reason is I feel like running away from it all.

If we get 20% inflation, by this i am assuming wages will lag but not by much, if you have a job, now you have a degree, so i ssume like Blair wanted, you are guaranteed a good job paying well into the late 20k's? I would not worry.................

I would only worry if you are flipping burgers, or something, well its good night life! Your generation have been bent over and well and truely f000000ked........

Share this post


Link to post
Share on other sites

The interest rates on student loans are the lower of 1% above base rate or RPI in March (from Sept on wards) - hence it is now 1.5%.

I've lowered my payments because my savings are getting a better net rate.

Share this post


Link to post
Share on other sites

The interest rates on student loans are the lower of 1% above base rate or RPI in March (from Sept on wards) - hence it is now 1.5%.

I've lowered my payments because my savings are getting a better net rate.

That can be a good idea but its always worth getting out the calculator and seeing if the rate they claim to be charging is what they actually add to your bill every year. I ended up paying off the student loan completely because I just didnt trust their arithmetic and its not worth the hassle of trying to argue with them.

Share this post


Link to post
Share on other sites

Hello Aquaman.

I have kinda good news for you. You won't have been charged anything like RPI over the course of your loan so far:

From: http://www.slc.co.uk/media%20centre/news_views.html#newsitem14

"The interest rate on income contingent loans will be 1.5% from 1 September 2011 across the UK."

Rates from 2007: http://www.slc.co.uk/statistics/facts%20and%20%20figures/previous_interest_rates.html

Student loan rates have been 2% of less since 2009. Well okay, 2007/08 was pretty shitty at 4.8% but you'd only have had a third of your loan accumulating interest right?

More from: http://www.slc.co.uk/media%20centre/news_views.html#newsitem14

"Between 1 September 2011 and 31 August 2012, the interest rate may change because it is linked to the rates charged by high street banks. The rate will be the lower of the Retail Price Index in March 2011, or 1% above the highest base rate of a nominated group of banks. As March’s RPI was 5.3%, the maximum rate of interest you may be charged between 1 September 2011 and 31 August 2012 is 5.3%."

But realistically, high street banks rates will continue to be a pittance. Unless everything goes pear-shaped, in which case we get our house price crash, but also have to pay more for our student loans. Swings and roundabouts innit. I think I'd happily suffer higher loan rates in return for an HPC though :) And yes I know we (ex)students are being subsidised like the bailed-out mortgageholders...

Edit: what the hell is going on with Virgin's webcache tonight, Jason et al's posts weren't there when I started composing this post...

Edited by christhpc

Share this post


Link to post
Share on other sites

The interest rates on student loans are the lower of 1% above base rate or RPI in March (from Sept on wards) - hence it is now 1.5%.

I've lowered my payments because my savings are getting a better net rate.

Huh!? Got a letter from the SLC this week saying the rate charged is 5%+??

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.