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Tigerlea
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Joined: 07 Jul 2016
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PostPosted: 12:25 - 18 Aug 2017    Post subject: Reply with quote

Sapolsky wrote:
SophR so good wrote:
Student loans are probably still the best bet seeing as they're not a real loan. It's more of a graduate tax, it doesn't prevent you getting other loans, you don't need to pay it all back and if you're not earning much you don't pay it at all.


This.

Ultimately I'm trying to view it as an extra 9% tax on anything I earn above 23k (subject to change...) and I'm basically going to ignore the actual figure I "owe" because with all of the interest the likelihood of it ever going away is pretty minimal.

If I can't get a job it doesn't get paid
If I can only find a shit job, it doesn't get paid
If I die it doesn't get paid
If I get hit by a bus and can't work ever again, it doesn't get paid
It doesn't affect your credit score
It doesn't get passed on to your kids
It doesn't come out of your estate

They should really just rename it as a tax like SophR said and get rid of this stigma of "zomg debt". Hell, if they just slapped a lower tax (perhaps 3%?) on every graduate who earns above x amount, think of the extra money they'd rake in from the high-flyers (this one follows you world-wide and is adjusted for currency). It would no doubt piss the high flyers off though since they are already forking over 50%. If I was having to hand over more than half of my salary to mr taxman I just wouldn't bother.


Even if you're not paying it back, it's still collecting interest. It starts collecting interest the day that it's paid out. So even if I don't start paying it back for the first 5 years, then I get the right salary and start doing so, I'll end up paying more over the lifetime of the loan than I would have on a normal loan.


However, if you move to another country and are earning a salary that is, say, £30,000 (just for easy maths), does the loan company somehow get paid back from that? Or is that not considered because you're not actually in the UK?
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The999Kid
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PostPosted: 13:02 - 18 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:


Even if you're not paying it back, it's still collecting interest. It starts collecting interest the day that it's paid out. So even if I don't start paying it back for the first 5 years, then I get the right salary and start doing so, I'll end up paying more over the lifetime of the loan than I would have on a normal loan.


However, if you move to another country and are earning a salary that is, say, £30,000 (just for easy maths), does the loan company somehow get paid back from that? Or is that not considered because you're not actually in the UK?


They hunt you down and collect it still - otherwise every graduate with half a brain would fuck off to aus or the USA (pre trump) to escape losing a portion of their hard earned crust to the fat cats.
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The999Kid
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PostPosted: 13:04 - 18 Aug 2017    Post subject: Reply with quote

in reality, the student loan system works on an assumed total loss across the board. a top economist worked out a few years ago that unless you're making more than 33 grand a year you aren't even paying back the interest on the loan, let alone making a dent in the loan itself...
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NDB 19/10/1989 - 1/11/2010 |Nowhere.Elyseum wrote: I get the distinct feeling that Tim should be our secret weapon for future trolling. I don't know many people that can rip the piss in Iambic pentameter
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Itchy
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Joined: 07 Apr 2005
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PostPosted: 13:06 - 18 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:




However, if you move to another country and are earning a salary that is, say, £30,000 (just for easy maths), does the loan company somehow get paid back from that? Or is that not considered because you're not actually in the UK?



It's an honour system. You're supposed to tell them at which they will organise a different payment schedule.

Many simply don't tell the SLC and walk away from it.

They haven't the time resources or man power to chase people who run overseas. This is why there are varying proposals from different countries where passports get revoked or degrees get revoked if there are run aways. I did a thread on it about a year ago.
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Itchy
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PostPosted: 13:13 - 18 Aug 2017    Post subject: Reply with quote

The999Kid wrote:
in reality, the student loan system works on an assumed total loss across the board. a top economist worked out a few years ago that unless you're making more than 33 grand a year you aren't even paying back the interest on the loan, let alone making a dent in the loan itself...


Even in a very high salary you're not going to ever really pay it off. My other half is a doctor training to be a surgeon. Once she gets fully qualified she'll be on £60-£70K (she's on just under £30K). Except to get there she's needed to take on about £87,000 debt.

This attracts £4500 interest a year and at her prime earning of £70K she'll only pay off £3200 of the interest (none of the capital element) meaning it's pretty much unrepayable unless you're the 1% making over £100K.
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Sapolsky
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Joined: 05 Aug 2017
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PostPosted: 15:51 - 18 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:


Even if you're not paying it back, it's still collecting interest. It starts collecting interest the day that it's paid out. So even if I don't start paying it back for the first 5 years, then I get the right salary and start doing so, I'll end up paying more over the lifetime of the loan than I would have on a normal loan.


However, if you move to another country and are earning a salary that is, say, £30,000 (just for easy maths), does the loan company somehow get paid back from that? Or is that not considered because you're not actually in the UK?


I get all of that, however, with a normal loan if you hit a rough patch you are screwed, you could lose your house etc. If you don't have a house you could lose whatever you do have. You have debt that could affect your chances of getting a mortgage once you get a house. You have debt that affects your credit score. You have debt that will come out of your estate in the future.

Yes, you'll be paying the 9% for ever more, however, it is as "risk free" as it comes. If you are paying with cash that's different, but taking out a normal loan instead I think is playing with fire. Interest rates won't be staying low for much longer.
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angryjonny
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PostPosted: 16:21 - 18 Aug 2017    Post subject: Reply with quote

Sapolsky wrote:
Yes, you'll be paying the 9% for ever more, however, it is as "risk free" as it comes. If you are paying with cash that's different, but taking out a normal loan instead I think is playing with fire. Interest rates won't be staying low for much longer.

Is that 9% of your gross income over the threashold? Because that could quite easily represent 15% of your net income (after tax and NI).
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SophR so good
Trackday Trickster



Joined: 08 Aug 2016
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PostPosted: 16:56 - 18 Aug 2017    Post subject: Reply with quote

angryjonny wrote:
Sapolsky wrote:
Yes, you'll be paying the 9% for ever more, however, it is as "risk free" as it comes. If you are paying with cash that's different, but taking out a normal loan instead I think is playing with fire. Interest rates won't be staying low for much longer.

Is that 9% of your gross income over the threashold? Because that could quite easily represent 15% of your net income (after tax and NI).


Yes. So for me it works out that I'm paying ~3.5% of my gross income and a whopping 4.4% of my net. I pay less tax though as they treat it like pension/salary sacrifice so winrar.
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Tigerlea
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PostPosted: 17:00 - 18 Aug 2017    Post subject: Reply with quote

I've just used one of those beautiful student loan calculators (based on my current salary) and apparently I'd pay it off in less than 10 years if I started at my current salary.

I'm getting a loan for 1 year. It collects interest from the day they pay it. I'll pay over £2000 interest as well as the whole loan...

I would never pay that much on a basic loan, of which I could take out and pay back in the same length of time (according to the calculator).

So apparently... for me, personally, a student loan just isn't worth that interest hike (a 3.3% difference).

Doesn't seem like a lot, but it adds up!
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Sapolsky
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PostPosted: 17:32 - 18 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:
I've just used one of those beautiful student loan calculators (based on my current salary) and apparently I'd pay it off in less than 10 years if I started at my current salary.

I'm getting a loan for 1 year. It collects interest from the day they pay it. I'll pay over £2000 interest as well as the whole loan...

I would never pay that much on a basic loan, of which I could take out and pay back in the same length of time (according to the calculator).

So apparently... for me, personally, a student loan just isn't worth that interest hike (a 3.3% difference).

Doesn't seem like a lot, but it adds up!


Ah, 1 year makes a difference. I'll need 3 years. Even for pure tuition fees loan (I'm not applying for maintenance) I'd need a starting salary of 27k to pay off the equivalent of what I borrowed before it wipes in 30 yrs (I'm also 41, so *technically* I only have 27 yrs of working life since the gits just increased retirement again)
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Sapolsky
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PostPosted: 17:33 - 18 Aug 2017    Post subject: Reply with quote

what if you took out the student loan for the extra safety net it provides, but then paid off early?
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Tigerlea
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PostPosted: 15:00 - 21 Aug 2017    Post subject: Reply with quote

Sapolsky wrote:
what if you took out the student loan for the extra safety net it provides, but then paid off early?


I've thought about that, but even if I took it out and stuck it in a savings account, the interest that it accrues is higher than the interest I'd earn on it. Confused
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angryjonny
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PostPosted: 15:17 - 21 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:
Sapolsky wrote:
what if you took out the student loan for the extra safety net it provides, but then paid off early?


I've thought about that, but even if I took it out and stuck it in a savings account, the interest that it accrues is higher than the interest I'd earn on it. Confused

Student loan, casino, put it all on red, win, pay back student loan, earn degree for free.

I honestly can't see how it can fail.
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Sapolsky
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PostPosted: 18:36 - 21 Aug 2017    Post subject: Reply with quote

Tigerlea wrote:
Sapolsky wrote:
what if you took out the student loan for the extra safety net it provides, but then paid off early?


I've thought about that, but even if I took it out and stuck it in a savings account, the interest that it accrues is higher than the interest I'd earn on it. Confused


Perhaps stocks in a war-related company. Trump should provide Wink
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