Alternative title, Graduates who pay back their loan quicker will pay less overall interest than those who take longer.
Just like a credit card, pay it back quicker pay less interest.
It’s a shit system (I hope it will change) but should we punish people for paying quicker?
Also, why do articles like these always feel the need to make it about racism and sexism, it’s neither it’s just a shit system for all
REVEALED: The Guardian states the obvious!
And the country already has a major shortage of nurses and teachers. How will this new system encourage people to (re)train and become qualified in these fields?
That’s just how loans work. What annoys me is how English students pay more than Ireland and Scotland.
State the obvious but also no not really
It gets written off after so long anyway
It’s more of a tax than a loan
I mean thats not revealed its how loans work, I mean if this was “revealed” it was by Adam Smith some time ago…
The Guardian’s headline is deliberately inflammatory by using words like rich and poor. This isn’t about family wealth but about earnings directly linked to how the graduate deploys their degree in their career and the jobs market.
The entire student finance proposition has always been unfair in that graduates can receive the same education but pay a different price depending on choices after university. We’ve all heard people joke how they’ll never have to pay it back and spend 3/4 years studying and partying essentially heavily subsidised by everyone else (including non-graduates paying tax).
Some will pay back all their student loans because they made the choice to go into a higher paying sector (and endure the long hours which often come with that). Many others from the same course as those people won’t pay it all back because they made different career and life choices. How is that fair? They had the same opportunity of education.
There are a few ways to look at this.
The worst thing is we’re struggling for nurses and allied health professionals these roles will never earn enough to pay it back. But you’ll now pay from day 1 until you retire.
The pay isn’t good enough for getting a degree then getting taxed for it. Band 5s will pretty much be better off working in a supermarket and such the pay isn’t too dissimilar.
It’s quite a big tax for people who want to go into healthcare to help people. And the higher you do go the more you get taxed each month. So make it to band 7 and you’ll be losing around 200 a month for most your career.
I qualified 3 years ago I worked a lot of overtime during the pandemic so my wage equated to almost top of band 7 I got it down to 48k remaining now I’m back to normal wages pretty much I owe over 50k due to interest… I’ll never pay it off interest will make sure of it. When I finish my training I’m doing now I’ll be paying basically 10% of my pay a month on student loans that seems to keep going up not down
Guardian:
People who pay back loans faster will pay less interest.
Also Guardian:
That’s racist and sexist.
This is news? Paying a loan quicker means less fees……
Standards are really dropping these days
What a fucking nonsense head line
If you pay back a loan sooner then you’ll pay less interest on it.
I am not sure why this is a news article. It’s pretty obvious that the cycle of debt is harder to get out of when you come from a poorer background.
The article is pretty much saying rich people tend to pay off debt faster and have a better support structure around them, alongside having more opportunities for higher paying roles. Well duh.
To think of student loans as just a loan is wrong in the majority of cases.
Student loans are effectively a graduate tax on anybody who cannot pay it off. You spend several decades having 9% over a certain amount chopped off your salary.
A wealthier or higher earning graduate has the ability to pay more sooner to escape that tax, and therefore pay less overall.
The whole system of finance surrounding tuition fees is broken.
Just in case anyone’s wondering what the current interest rate in my loan is, it’s 7%. I am still in university and what started as £54k will be £60k because of interest. I will never pay that off, so for 30 years I will be paying however much to sfe. Some people already paying aren’t even covering interest.
People are saying this is just how loans work but that is completely missing what the article is saying. Firstly, student loans aren’t real loans, they can’t be discharged through bankruptcy and the terms of repayment are a bizarre marginal tax rate that would cause riots if it were applied to tory voters (the old who got uni education free). Secondly, the interest rates are absolutely wild- the government, which can effectively borrow for really low rates are charging students fucking RPI + 3% – a measure of inflation that they refuse to use when negotiating salaries for their employees. Finally, they’re extending the repayments to *40 years* – that’s nothing to do with how loans work that’s just a pure “fuck the middle class” move. Well done, you went to uni, 9% marginal tax rate for the rest of your life. Oh and good luck with your retirement, you won’t have saved enough *because it’s all going to your fucking student loan!*
This is very misleading.
People who are from a rich enough background to not need a student loan pay nothing but the cost of the degree.
People who take out a student loan and end up earning very little will pay nothing at all.
People who take out a student loan and earn enough to trigger repayments but not enough to pay the whole thing back by the end will get some of it canceled.
People who take out a student loan and earn enough to pay the loan back well before the 30-year cancellation will dodge some of the interest.
The people who get hammered the hardest are the middle earners: the people who earn too much for it to be canceled but not enough to dodge the interest.
Basically, the system punishes people who are from poor backgrounds and manage to become successful after university. The system is set up to penalize the one outcome that it is there to encourage.
You can’t reveal something that has been common knowledge for 20 years
The reason why uni fees went so high is really to force most people to take out a loan. The whole thing is such a scam but people will feel they have no choice but to go along with it. Especially since which political party is going to change it?
The UK really has become like the USA in the ubiquity of it’s political choices. But unlike the USA the UK isn’t an industrial machine and can’t afford to keep the scam going indefinately.
That additional 10 years is disgusting. Changing the interest rate matters little if you’re not gonna pay the loan off in 30 years. Lowering the repayment threshold means you’ll pay more every month.
But those 10 years… that means a 21 year old graduate could be paying all the way to 61. It means changes to the interest rate have a much bigger impact and it beats more money out of people who can least afford it.
It’s just more punching down. Which is all we should come to expect.
Maybe crazy / unpopular idea. Don’t charge the student loan charge and freeze interest while NHS workers work within the NHS.
Most people’s debt will get wiped out anyways after so long.
I had a look at a loan calculator the other day
If started earning 65k today, by 2046 when my loan is wiped I will have paid back a grand total of £2k off today’s balance, plus £78k in interest at today’s rate of 4.5%.
It’s absolute insanity.
Wow! Incredible journalism here. Who comes up with this muck?
Should be zero percent interest. Disgusting that young peoples educations has been coopted as a gargantuan financial asset.
It seems that Keir Starmer has ‘dropped his pledge’ to abolish tuition fees. And there’s me thinking Keir is a man for keeping his pledges. All ten of them.
25 comments
Alternative title, Graduates who pay back their loan quicker will pay less overall interest than those who take longer.
Just like a credit card, pay it back quicker pay less interest.
It’s a shit system (I hope it will change) but should we punish people for paying quicker?
Also, why do articles like these always feel the need to make it about racism and sexism, it’s neither it’s just a shit system for all
REVEALED: The Guardian states the obvious!
And the country already has a major shortage of nurses and teachers. How will this new system encourage people to (re)train and become qualified in these fields?
That’s just how loans work. What annoys me is how English students pay more than Ireland and Scotland.
State the obvious but also no not really
It gets written off after so long anyway
It’s more of a tax than a loan
I mean thats not revealed its how loans work, I mean if this was “revealed” it was by Adam Smith some time ago…
The Guardian’s headline is deliberately inflammatory by using words like rich and poor. This isn’t about family wealth but about earnings directly linked to how the graduate deploys their degree in their career and the jobs market.
The entire student finance proposition has always been unfair in that graduates can receive the same education but pay a different price depending on choices after university. We’ve all heard people joke how they’ll never have to pay it back and spend 3/4 years studying and partying essentially heavily subsidised by everyone else (including non-graduates paying tax).
Some will pay back all their student loans because they made the choice to go into a higher paying sector (and endure the long hours which often come with that). Many others from the same course as those people won’t pay it all back because they made different career and life choices. How is that fair? They had the same opportunity of education.
There are a few ways to look at this.
The worst thing is we’re struggling for nurses and allied health professionals these roles will never earn enough to pay it back. But you’ll now pay from day 1 until you retire.
The pay isn’t good enough for getting a degree then getting taxed for it. Band 5s will pretty much be better off working in a supermarket and such the pay isn’t too dissimilar.
It’s quite a big tax for people who want to go into healthcare to help people. And the higher you do go the more you get taxed each month. So make it to band 7 and you’ll be losing around 200 a month for most your career.
I qualified 3 years ago I worked a lot of overtime during the pandemic so my wage equated to almost top of band 7 I got it down to 48k remaining now I’m back to normal wages pretty much I owe over 50k due to interest… I’ll never pay it off interest will make sure of it. When I finish my training I’m doing now I’ll be paying basically 10% of my pay a month on student loans that seems to keep going up not down
Guardian:
People who pay back loans faster will pay less interest.
Also Guardian:
That’s racist and sexist.
This is news? Paying a loan quicker means less fees……
Standards are really dropping these days
What a fucking nonsense head line
If you pay back a loan sooner then you’ll pay less interest on it.
I am not sure why this is a news article. It’s pretty obvious that the cycle of debt is harder to get out of when you come from a poorer background.
The article is pretty much saying rich people tend to pay off debt faster and have a better support structure around them, alongside having more opportunities for higher paying roles. Well duh.
To think of student loans as just a loan is wrong in the majority of cases.
Student loans are effectively a graduate tax on anybody who cannot pay it off. You spend several decades having 9% over a certain amount chopped off your salary.
A wealthier or higher earning graduate has the ability to pay more sooner to escape that tax, and therefore pay less overall.
The whole system of finance surrounding tuition fees is broken.
Just in case anyone’s wondering what the current interest rate in my loan is, it’s 7%. I am still in university and what started as £54k will be £60k because of interest. I will never pay that off, so for 30 years I will be paying however much to sfe. Some people already paying aren’t even covering interest.
People are saying this is just how loans work but that is completely missing what the article is saying. Firstly, student loans aren’t real loans, they can’t be discharged through bankruptcy and the terms of repayment are a bizarre marginal tax rate that would cause riots if it were applied to tory voters (the old who got uni education free). Secondly, the interest rates are absolutely wild- the government, which can effectively borrow for really low rates are charging students fucking RPI + 3% – a measure of inflation that they refuse to use when negotiating salaries for their employees. Finally, they’re extending the repayments to *40 years* – that’s nothing to do with how loans work that’s just a pure “fuck the middle class” move. Well done, you went to uni, 9% marginal tax rate for the rest of your life. Oh and good luck with your retirement, you won’t have saved enough *because it’s all going to your fucking student loan!*
This is very misleading.
People who are from a rich enough background to not need a student loan pay nothing but the cost of the degree.
People who take out a student loan and end up earning very little will pay nothing at all.
People who take out a student loan and earn enough to trigger repayments but not enough to pay the whole thing back by the end will get some of it canceled.
People who take out a student loan and earn enough to pay the loan back well before the 30-year cancellation will dodge some of the interest.
The people who get hammered the hardest are the middle earners: the people who earn too much for it to be canceled but not enough to dodge the interest.
Basically, the system punishes people who are from poor backgrounds and manage to become successful after university. The system is set up to penalize the one outcome that it is there to encourage.
You can’t reveal something that has been common knowledge for 20 years
The reason why uni fees went so high is really to force most people to take out a loan. The whole thing is such a scam but people will feel they have no choice but to go along with it. Especially since which political party is going to change it?
The UK really has become like the USA in the ubiquity of it’s political choices. But unlike the USA the UK isn’t an industrial machine and can’t afford to keep the scam going indefinately.
That additional 10 years is disgusting. Changing the interest rate matters little if you’re not gonna pay the loan off in 30 years. Lowering the repayment threshold means you’ll pay more every month.
But those 10 years… that means a 21 year old graduate could be paying all the way to 61. It means changes to the interest rate have a much bigger impact and it beats more money out of people who can least afford it.
It’s just more punching down. Which is all we should come to expect.
Maybe crazy / unpopular idea. Don’t charge the student loan charge and freeze interest while NHS workers work within the NHS.
Most people’s debt will get wiped out anyways after so long.
I had a look at a loan calculator the other day
If started earning 65k today, by 2046 when my loan is wiped I will have paid back a grand total of £2k off today’s balance, plus £78k in interest at today’s rate of 4.5%.
It’s absolute insanity.
Wow! Incredible journalism here. Who comes up with this muck?
Should be zero percent interest. Disgusting that young peoples educations has been coopted as a gargantuan financial asset.
It seems that Keir Starmer has ‘dropped his pledge’ to abolish tuition fees. And there’s me thinking Keir is a man for keeping his pledges. All ten of them.