Should You Even Pay Off A Student Loan?

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The average student now owes £45,000 when they graduate from university, and interest rates on that debt have never been higher, with some students seeing over 7% added to their statements in the last 12 months. With such high rates, should graduates focus on getting the debt down as soon as possible?
Here is the link for the student loan repayment sheet:
financialinterest.com/student...
Student loan calculator:
studentfinancecalculator.co.uk/
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00:00 - Value
01:05 - The Dearing report
02:08 - How long will it take?
02:45 - The interest rate
03:48 - Inflation vs the rate
05:09 - What percentage pay it back?
07:18 - Who should overpay?
09:47 - Graduate tax
ATTRIBUTIONS:
Video Title: Don't let money get in the way of university - a Welsh Government video
Author: Welsh Government / Llywodraeth Cymru
Source: Don't let money get in the way of university - a Welsh Government video.webm
License: Creative Commons Attribution 3.0
Welsh Government on RU-vid, CC BY 3.0 creativecommons.org/licenses/..., via Wikimedia Commons
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Опубликовано:

5 июл 2024

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Комментарии : 518

@DamienTalksMoney Месяц назад

Here is a link to a good calculator. studentfinancecalculator.co.uk/

@JHBEM Месяц назад

I have to say using the calculator you shared helped a lot as it has lots of ways of testing different variables. It's a lot better than the other link (IMO). Great video - This comes at a very timely moment as partner is just graduating with £30k of student loan debt. And to your point the should you / shouldn't you debate is often so difficult. Notably on a £35k graduate role then it makes no sense to repay (if you never get a promotion and just inflationary payrises). But if you then reenter the salary with say a payrise up to £40k then opting into paying off the loan makes sense for us. That all being said as the Student Loan has a variable interest rate - it is possible that it swings back in the favour of not repaying but once you've committed to putting in additional payments you so kind of need to stick with that plan... that would be the big caveat, you really have to be sure that overpaying is better for you long term.

@anthonynorman1234 Месяц назад

It's kind of crazy that we let people at the age of 16/17/18 make financial decisions that are now going to impact them for 40 YEARS!!! It's actually wild! I personally view it as a tax, I don't think I am ever going to actively overpay. Just wanted to add the graphics looked really good in this!

@terranaxiomuk Месяц назад

Especially as the part of the brain that actually deals with personality and decision-making isn't even fully formed until about 25 years of age.

@mariamejawara Месяц назад

@terranaxiomuk it is 25 years on average, but it can be earlier or later

@anthonyfaucy2761 Месяц назад

They won't let you take a mortgage as a student but will allow you to take on a massively scammy student loan

@SweetandFitting Месяц назад

It’s kind of crazy that we let people who are 60/70/80 make decisions for a society that they don’t participate in in the same way they did when they were younger and will soon be leaving.

@PSCA1988 27 дней назад

But you think you're responsible enough to drink when you get to college!?!?😂

@Infections95 Месяц назад

Uni wasn't remotely worth it. Nothing I learnt is applied in my job, the only thing it got me was my foot in the door for a job (no one has even asked to prove I have a degree). I'd always recommend apprenticeships now

@daspeed198 Месяц назад

may i ask what career you pursued?

@elmarshall50 Месяц назад

I'm curious too. What Subject did you study?

@Carl-hs420a Месяц назад

Same. I haven't met an employer that cared enough to check. It's the new debt employers seek out because an indebted employee is a trouble-free employee.

@dww6 Месяц назад

Same. When I'm recruiting I even kinda look down on them. Uni was a bad investment at 3k per year. Choosing to go at 10k is bad judgement.

@Infections95 Месяц назад

@@daspeed198 studied risk finance investment management, got a first and now work in banking.

@thomasthorpe7286 Месяц назад

My marginal tax rate is now 9% larger than the rich guy sitting next to me whose parents paid their student loans.

@DamienTalksMoney Месяц назад

Yep inequality built into the system in that sense

@huguesjouffrai9618 Месяц назад

If the state paid for uni the rich guy's parents would have given him the money instead This university system is not why that rich guy is richer than you

@Samuelbce Месяц назад

⁠@@huguesjouffrai9618The point is that they are paying more than the person with more money, just because that person has more money. Which is, like as said, inequality built into the system.

@huguesjouffrai9618 Месяц назад

@@Samuelbce this is no different that the fact that a guy who inherits a flat doesn't have to pay rent. That's basically saying "this thing is not free so a rich Guy Can get his parents to buy it for him" and that's true of everything that's paid for in life. But this system is actually not too Bad considering most rich people go to uni (it makes sense to make them pay) and most people who go to uni will end up rich (si it makes sense that they pay for their education once they get rich). The alternatives to this system are: - free uni: everybody pays for the education which is a huge wealth transfer towards the richest in society, and which usually creates a big temptation for governments to cut uni budgets - everybody pays their loans entirely (barrier to entry for the poorest and if you don't make tons of money of the bat you have a huge Financial burden when you're young) - people pay based on their parents income (in the long term it's similar to the current system with the richest paying most except it's an income tax proportional to the number of kids)

@gregoryrussell5527 Месяц назад

How is it a huge wealth transfer to the richest? If it was free it would be paid for by taxes and the tax burden is highest on the richest in society so the wealth would actually be transferred down to those who were poorer but got a free education

@mjbesant Месяц назад

I earn £80k and my wife earns £50k. Once I had paid off our cars and other debts, and saved a few grand, I paid off both our Student Loans, with a remainder of £23k between them. That feels extreme, but the extra £550 a month in our combined monthly pay cheques felt extremely worth it. We would have paid the £23k in 3.5 years anyway, but todays interest rate at 7% would have meant paying £550 for a whole further year, costing over £6.5k in interest alone.

@maxodidily Месяц назад

UK student loans need rebranding, its basically a tax on income but branded as scary debt.

@ukcommunistparty6045 Месяц назад

actually our corrupt goverment who created student loans want you to live a miserable life

@Maksimszz Месяц назад

its a big tax though, 7% is very significant considering most young men have to deal with rising insurance costs and rising rents, barely able to scrape by. Yes the 7% is paid above a 25k threshold but keep in mind that full time minimum wage is close to 24.5k, and if you do some overtimes you easily break past the 25k barrier

@LionRafale Месяц назад

@@Maksimszzyes 7% is alot. But after threshold of your example £25k a year is monthly pay of about £1,700 a month. So a overtime of £100, £7 will be student loan repayment. In the grand scheme of things £7 in student loans repayments is fairly small of a monthly income of £1700-1800

@mightymike2192 Месяц назад

When somebody tried to barnd it a "Graduate Tax" they were told to shut up. From what I can see from the younger people at work, that's exactly what it is. Like most other systems in this country nowadays, it is broken and each individual must think or themselves. Groupthink is the way to fail nowadays. Plus Martin Lewis is crap.

@JimP-tc7gg Месяц назад

@@mightymike2192 Martin Lewis knows his audience though. I don't find him particularly useful but my 60 year old mother does, just for keeping informed on the basics.

@kelvindobson1898 Месяц назад

I decided to go for a change of career in 2007, as a mature student (40) . I went for it; I graduated with a first class honours; I worked in my chosen field for five years. I am now an HGV driver , earning over £64 k pa. University ? One of the biggest mistakes I’ve made 🤗

@WhiteManInAVan Месяц назад

Mines is similar, I went to uni, got a degree in youth development, i worked as a youth worker for 15 years earning £21k and ended up losing my job to because of council cuts, became a long haul driver and earn £30-40k. Why did I ever get a degree?

@nguene Месяц назад

@@WhiteManInAVanthe issues isn't with degrees it's with the degree you chose to study of you had gone and studied computer science or financial economics your story would have been different so just saying degrees in general aren't worth it lacks nuance it's about the the degree the university and the salaries that combination of factors could return

@WhiteManInAVan Месяц назад

@@nguene i agree, educating our young people is not as important and transporting goods around the country and therefore doesn't pay as well. Also transporting goods doesn't require as much learning as educating our kids so driving doesn't need a degree. I 100% agree with you. Also given that computer science is relatively new, compared to education, its not surprising that there are a larger proportion that earn better atm. However, what happens when the market is saturated? Also lets not forget the number of people losing thier jobs in the industry already to AI. But i guess at that point you'll just name another degree that people can waste a whole lot of time and money on to re-train...

@thomasbiley5463 Месяц назад

@@nguene I studied Economics and Finance at a red brick university. Still not a good investment.

@stephen2203 Месяц назад

@@WhiteManInAVan Not everyone can drive, but most can. Everyone can study "computer science", but most will find it impossible to understand. The jobs in "science" are changing, I know quite a few "scientists" who now drive for a living. I also have a relative who drives HGV/LGV, he threatened his daughter that she better not even think about following that career. So... want a degree? Maths, Physics, Law and Medicine (including opticians and dentists). Anything else, you must ask yourself if you can get by without a degree.

@EmmaCruises Месяц назад

Fantastic video, as always!

@DamienTalksMoney Месяц назад

You legend Emma ❤️

@Jakeyosaurus Месяц назад

This was a great video that I think a lot of people would find helpful, looking at a student loan as a higher education tax is, I think, a much better way of visualising the true cost of the loan.

@3004andy Месяц назад

One of your best prezzos ever Damien! Superb logical construction, clear signposting, pretty unbiased presentation of choices and options.

@IOSALive Месяц назад

Damien Talks Money, This made me laugh so much! Thanks for sharing!

@neilcook1652 Месяц назад

Damian: An interesting subject would be the different ways parents can support their children onto the housing ladder, without compromising their own financial security in retirement. ATB

@elliotm Месяц назад

As with all your vids, super useful and clearly presented. Thanks

@liamwarren7590 Месяц назад

Not even close the be worth while. Currently a tax for the rest of your life. I barrowed around 40k and currently owe 78k, i earn £60k per and still not even close to paying the interest down. By the time the debt is wiped i would have paid my 40k 3 times over absolutely scandalous.

@SgtAndrewM Месяц назад

What are the intrest rates and can you pay it off early?

@wentoneisendon6502 Месяц назад

@@SgtAndrewM there is almost no advantage to paying it off early

@SgtAndrewM Месяц назад

@@wentoneisendon6502 what about less intrest repayments? Duhh

@BlackSuneEmpire 3 дня назад

I'm in a similar boat with a lower amount to repay. I had a scholarship (courses paid for). But I still had to take out a maintenance loan to survive. I've been paying it back since 2017. The courses I studied for allow me to make a salary of about 40k. So far I've paid about 30% of what I borrowed back in tax. I would be better off applying for a bank loan to pay off the remainder as the interest rates are much lower than 8 or 9%

@GregThurtle Месяц назад

7.80% is ridiculous!

@imbarmstrong Месяц назад

Damo's back. Luckily my short stint in Uni is from a time before fees...

@flipeo32 13 дней назад

Production on this video is crazy - subscriber gained

@SS-vz9iv Месяц назад

I was raised on the Offspringand did just that... just got a job. We all take different paths but this is still really practical information Damien, well explained as usual!

@AlwaysStaringSkyward Месяц назад

Damien, the quality of your content is getting better and better. Nice work and thank you for helping lots of people make some sense of the complicated and senseless!

@batsteve1942 Месяц назад

Very useful video, not just for your usual great insight, but I used the loan calculator and worked out I’ll have mine paid off in around 5-6 years without overpaying and had no idea!

@usn8964 Месяц назад

Congrats on city winning the league, hope you're safe this time round, love you loads pal

@DamienTalksMoney Месяц назад

You legend. Thank you for this! I stayed in doors this time 🤣

@lawrencehooper4341 Месяц назад

And more importantly, Arsenal didn't win it 😅😅

@dawoodkhan765 Месяц назад

Manchester is blue! 💙

@bernardo.daSilva Месяц назад

Don't we all love Damo? I hope no one's injured this time.

@aj7803 Месяц назад

Thanks Damien. This is a great video. Much appreciated 👍

@MrPecksniff Месяц назад

Glad you chose that Offspring song. It could have ended badly 😂

@Geop24 Месяц назад

Great video Damien, for me one of the most important you have made to date. As someone who went to University and left circa 2017 I've watched my balance increase until I have hit £60k in debt. Despite moving to a good job a couple of years ago and more than doubling my income, I have never been asked to prove anything relating to my degree and I've held 3 jobs in the financial services industry. Currently I pay around £200 pm plus more when it comes to bonus time, this year I lost £2k out my bonus. I've considered chucking my entire bonus towards reducing the debt but as you point out my monthly payments would not change until the balance is paid in full and I could better utilise the money (just bought a house). I wish someone had highlighted the downside of university to me, looking back I wish I had joined an apprentice scheme instead which would have allowed my to start earning some 5 years earlier, taught me financial independence at an earlier age and develop good habits. Not to mention I would be thousands better off that went towards paying SLC that could have been invested. When it comes to it I will make sure my kids are aware.

@creatingbalancefinance Месяц назад

Great video as always! I thought the percentage would be closer to 50%- that’s what I was saying when you paused 😂. I paid off my student loan just before having my first child. I’m glad it’s paid off as the interest was starting to bother me. Look forward to your next video 😊

@TomCushnie Месяц назад

50k salary and i'm still not keeping up with the interest yearly even though I took a standard 3 year course, not even masters. That's nuts

@rutts499 Месяц назад

Loved that Damo! Brilliant video and something I’ve wondered about for a long time. I was the first year to go to university with £9000 tuition up from a much more affordable £3000. I did it largely because my school pushed university and nearly all of my mates were going. I did an employable degree (Engineering) which is definitely more helpful than a lot of degrees but I now don’t use my degree specifically and work in a different career. Potentially for me, it wasn’t totally worth it as I didn’t follow my original plan and become a chartered engineer. However, I had such a fantastic time at university, where I played loads of sport, made fantastic friends, generally just had a brilliant time, I almost see it as worth every penny. I couldn’t buy that experience again for all the money in the world, so I feel (despite the debt / graduate tax) that it was well worth it. I’d do it all again in a heartbeat!

@ridewithjamie Месяц назад

I agree with what others have said. It could do with rebranding as a ‘graduate tax’ over the years after uni, rather than a loan. Especially since such a high percentage of people will never pay their loan off in full. I can say with certainty that I will never even get close to paying my student loan off by 2050 (unless I win the lottery!). Great video as always Damo.

@Natta44 Месяц назад

Uni is only worth it if you take a STEM or specialised degree that leads directly into a high paid career. I now work in project management and anyone can do a pm course for a few hundred. I have a life time of debt. Maybe it did get me better opportunities but i didn't get a career. Had to jump from job to job for more money. So to anyone young watching this, please think hard about it, getting a degree does NOT guarantee a high paid job. It used to in the 90s or early 2000s but that changed in the last 15 years.

@treyjustice33 Месяц назад

You sir, have jumped up to one of my top 10 RU-vidrs simply for the ending of this video alone, lol.

@DarrenSmith-qg2hk Месяц назад

You can legally avoid paying your student loan on earnings you contribute into your workplace pension under salary sacrifice, which is great if you never plan to pay it off

@thomasroberts1192 Месяц назад

Is there a good place I can learn more about this?

@TheReferrer72 Месяц назад

@@thomasroberts1192 Go look on the calculator linked in this video.

@ianwall9152 Месяц назад

Not if you want to earn very much. The point of going to uni should surely be to earn a lot more than £30k.

@JimP-tc7gg Месяц назад

@@ianwall9152 yeah you cant live under the minimum payment threshold forever

@3004andy Месяц назад

This works on salaries into the 100k odd range equally as well

@rgxwrestlingmedia Месяц назад

Great video as always, though I'd be careful of using Epitaph music in videos, they can be quite strike happy, even with their smaller artists.

@DamienTalksMoney Месяц назад

Hi! Thanks for this, I purchased a commercial license to use the song because you are correct they aggressively strike you.

@versaceviper9798 Месяц назад

Overpay your postgrad, leave your undergrad. Ultimately, advise people to not go to university. Opt for apprenticeships and specialist qualifications for the field you want to go into. These loans significantly affect your ability to buy a house …. Which is already near impossible.

@madma11 Месяц назад

It doesn't really... its not the degree that harms it... its the work you do post the degree.. With a joint income of 60k a year (assuming both partners earn 30k), buying a decent home is very possible.

@versaceviper9798 Месяц назад

@@madma11 No, because although you may on paper earn 60k as a couple, your fixed expenses are subtracted from your permitted mortgage amount. So what you think you’re able to afford, isn’t actually what you’re able to afford because of your student loan repayments.

@madma11 Месяц назад

@@versaceviper9798 Ridiculous. I earn 60k and i have a student loan and i literally bought a brand new home. So I know this is possible...

@Monk_Duck Месяц назад

@@versaceviper9798if you are earning £60k joint then it's £70 per month for the loan (under plan 5). Normally doesn't wreck a mortgage offer, considering the options available.

@madma11 Месяц назад

@@tgillson3093 yeh but ow much are they paid? I reckon you could earn similar on an apprenticeship.

@pandanation6202 Месяц назад

For longer degrees the interest whilst studying is massive. If you do a placement and a masters, the increase due to interest will make it so hard to pay off over the course of your career... Somethigb else to think about for placements, which I am not convinced are worth it but students often get pushed onto

@shh532 Месяц назад

I did recently pay off my postgraduate loan as I had only one term on it. It was about £4000 (2 years down the line, one term only). Roughly would have been £8000 or more to pay off over a very long time... so I'd say that did make sense especially as it was £50/m. But my normal graduate loan I'll leave by itself.

@outthesaddle2109 Месяц назад

Another key consideration is the uncertainty around future government policy. For example, the government could decide to reduce the age that outstanding debt is wiped and this could be a bitter pill to swallow for those who opted to pay down the debt by more than the statutory requirements.

@cherylsexton2611 Месяц назад

At the beginning of your discussion, you posed the question, "What value should we place on education?" Undoubtedly, education deserves immense respect and value-it's essential for our national progress and critical thinking. However, the more pertinent question might have been, "How much value should we place on a university degree?" It's important to differentiate this from the broader concept of education, which is fundamentally invaluable. We should never underestimate the importance of education; a society lacking in education is at risk.

@anthonylulham3473 Месяц назад

Id disagree a little on the 'society lacking in education is at risk' line. We teach people to think at school. Thats the dangerous thing. The way that we teach children to conform and to not take risks is risky. The modern schooling system was born in Tsarist Russia for docile factory workers. University tries to break conformist thinking, but only does it with conformist methods, eg many uni students find Marx and think how wonderful he is as example. The historic English thinking was done by the few highly regarded positions (church and state) that you could seek to be a part of through competence but the masses don't typically use their critical discernment. most people are happy to comply, as school/church/state has taught them. Recent COVID lockdowns were a perfect watershed for if you comply or not. Schools are to learn to read and write and be a part of society (tax forms, interpersonal relations, sports and cooking). the specific knowledge should be sought out by the potential students themselves directly, especially with the internet. Society functioned quite well in the dark ages. I've never needed to identify an oxbow lake, nor to use iambic pentameter in general life. I have needed to google how to sew a button or wire a plug. I have needed to learn CPR on pregnant women but had to seek this elsewhere from standard education systems.

@RihardsDel Месяц назад

What value does a Dance degree bring to society? Strippers with a degree are not more valuable than strippers with a degree. Both provide a valuable, essential service to society

@KevBridges Месяц назад

Never understood the panic to pay it back. I've paid like £45 out of my wages a month for the past 14 years lol.

@BlacksmithBets Месяц назад

When you’re losing hundreds a month from your pay you may feel different.

@JamiestubeiPod Месяц назад

Great video! A video idea which I think many would find useful and apologies if you already cover it somewhere is information on childcare help and the different schemes the government offer. The free hours at certain ages is all over headlines at the moment but I hear no one talking about the tax free childcare allowance scheme of £2000 a year which would benefit a lot of people. I’m sure there are more schemes out there too but the information around them is shocking.

@jenko6196 Месяц назад

I’m about to start a low-earning job coming out of my degree where I will be paying that £90 a year. I’ve no idea in my career where I will end up and will likely sit in that middle range. Thanks for this video to help clear up the impending worry :)

@daspeed198 Месяц назад

This is video helped so much with the debate I've been having with myself about student loans. I started Uni at in September and decided to invest my savings in a stocks and shares ISA whilst studying. I think the data you've showed and the calculator as well have made me think to not bother about it and use my savings on a house deposit instead but to keep investing any excess that I would have applied to the loan to try and out grow it. Thank you Damien!

@Waddywoos360 Месяц назад

Absolutely. And always remember that student loans aren't payable if you aren't earning, so if the worst happens and you lose your job or become unwell you will have an emergency fund there in your savings with nothing payable on the loan to worry about. I think thats the one thing Damien missed in his video.

@daspeed198 Месяц назад

@@Waddywoos360 I totally forgot about that as well, damn.

@sarahcraig1992 Месяц назад

Thank you for making this and creating a conversation! As a high earner i am devistated by the impact of this student loan - i pay £4k per year post tax and it doesnt even pay off my interest. I know i should pay it down but who wants to use their hard earned savings to do this when you cant predict the future? University was the biggest mistake i ever made and i really think something needs to be done as it just makes you not want to work! I already pay enough taxes, so why can't i just pay my loan off and get on with my life. There's honestly not much point in working, when it takes away the spare amount of money that you'd have to enjoy. It rewards low earners and punishes middle to high earners heavily - i don't get it, isn't that the point of University? To get a well paid job.

@Maksimszz Месяц назад

My one piece of advice is do not be misled by statistics, even though going to uni will guarantee higher earnings. It also heavily depends on the course you are taking so for example an accounting or financial degree will have way more value than an art degree or something similar. It is very important to differentiate between this before making the commitment to go to university. Not to also mention that some of those figures could be very skewed towards top universities bringing up the average earnings in comparison to lower ranked.

@80volwerine Месяц назад

I like this video Damien. It is educating and you speak nice and slow this time. I quite like that. 👍

@reeserichardson8377 Месяц назад

My education has been worthless to me. I got a higher paying job that was not only outside of my feild of study, but also required no degree

@desbowman9497 Месяц назад

A sneaky thing they do is apply the highest rate of interest while you study, it’s only the year after you graduate that you can access the minimum interest rate (depending on your graduate role’s salary)

@tomv7986 Месяц назад

In The Netherlands the interest rate is linked to the yield on 5 year treasuries bills which is substantially lower. Repayment is based on income as well.

@Kaizen917 Месяц назад

Letting the student debt compound over the years can nicely illustrate to anyone what could have happened if they did the opposite in terms of savings.:) Btw, dont think the video mentioned it but my experience from having a student loan and seeing it as this bit of extra tax, it made me incentivised to go for bigger salary sacrifice options at work which I suppose could be a nice side effect from all this.

@MrDannyMacdonald Месяц назад

I'm a Plan 2 and postgraduate loan repayer. From experience the post-grad loan repayments are the kicker due to the lower earnings threshold from which you start repaying

@jakefry6563 Месяц назад

So glad I paid my master's off in full

@seiwarriors Месяц назад

Yeah i am a masters student and I know that I will have to overpay my postgrad right away.

@PTR2K Месяц назад

One question I have (still watching the video atm so will delete if answered during) is are the government able to change the forgiveness after 30 years that’s currently in place? Worried I’ll get like 10 years from retirement and have to pay a lump some down. Hopefully I’ll have replayed by then but you never know what’ll happen in future

@TheCrizoo Месяц назад

I paid mine off last year, with the interest rate increases I noticed the balance wouldn't reduce at the rate it had been. Was paying £120 a month but the total wasn't dropping below £10k. I'm glad I worked and saved over the years to pay it off in one go. I'll make the money back in saving payments and earning the interest instead of accruing it.

@seckinboy Месяц назад

I need some advice. I dropped out 2nd year and owe 45k. I’ve managed to secure a great job without a degree. However every year I make around £3k payments but more than that gets added back on as interest!!! So in the next 30 years it will get written off but I would have paid nearly £100k …

@connorwatt507 Месяц назад

I don't need a loan for my 4th year here in Scotland, but i was wondering if i should just take it anyway and invest it all into my stocks and shares ISA?

@HDawg26 Месяц назад

I paid mine off in May 2023. I had about 5k left and saw the interest rates were climbing rapidly from 1.5% to the 7.5% now and knew that the 5k would eventually get paid off anyway so I just overpaid it then instead of paying more overall. Happy with my decision and was able to park the extra income into my pension.

@adamxyz123 Месяц назад

Managed to pay mine off by my 30th Birthday. There was something insanely satisfying about seeing it no longer appear on my payslips. My advice for anyone now, is more to make sure they REALLY want/need to go to University given how expensive it will be. I'm hoping by the time my kids are at Uni age, that the system will have been reformed to make it make sense again.

@JellyLancelot Месяц назад

I did the same. I got very lucky in a career, that was completely unrelated to my Uni course, and ended up paying it off by my 30th too. The satisfaction in seeing that ~£400 in my pocket instead of theirs was superb.

@leannecrook4472 Месяц назад

Does the 'percentage of people' that pay back the loan data just include the original loan, or is it the loan plus the interest?

@Jalleur14325 Месяц назад

I took one out about 8 years ago and get monthly letters with massive amounts added to the principal every month. No way I am paying back at 8 percent interest when wages in the sectorI went into following the postgrad, are miserable (not to mention the job being awful).

@symetryrtemys2101 Месяц назад

The problem with the system as I see it is the point that you raised when you said you’ll never know whether it was worth repaying the loan until the loan repayment longstop date has passed. It turns repayment into a gamble, which is unlike any other loan. It’s the shifting interest rates that are the issue. That said, I’m all paid off now, so selfishly I wouldn’t be in favour of a graduate tax that I pay until the end of my days.

@lilymackenziee Месяц назад

So, much like income tax threshold, with student loan repayments you only start paying 9% back AFTER you have earned £27,000 that business year?

@PAZPERDEE Месяц назад

@lilymckenzie, it depends on when you graduated and what plan you are on, that determines the threshold on when you begin to pay back

@kevlarslappywag7447 Месяц назад

Couldn’t believe the timing of this; after 20 years, I actually just received a letter from the SLC to inform me I should finish repaying my (1999-2003) debt this year..

@ianwall9152 Месяц назад

As you say the "loan" is a graduate tax. The issue is if you earn a modest amounts in your early career and then your income sky rockets in late thirties you will pay high amount each month - it could easily be the same as a mortgage. I modelled that an average career salary of 72k was the real tipping point. Whilst £72k may sound huge ask your parents what thier starting salary was . Chances are thier incone has gone up at least four fold in 30 years.

@chriswhitehead9850 Месяц назад

The real travesty of this system is that it used to be worth getting niche degrees and you could really make a difference but now you are "taxed" highly for doing so and therefore take a generic degree that prioritises income over your preferred career.

@kamranyasin4402 Месяц назад

Sooo is it better to pay it off in one go or not?

@Holdeenio Месяц назад

It’s always an interesting topic. I’ve been to uni twice, BSc then later an MBA and used SLC both times. After finishing my MBA I started paying down the student loans @ £2k /m until they were gone - which took years. But now I’m free and that feels good. The loans helped me get the degrees as my family aren’t wealthy, but it’s what you DO with the degree that earns the money to pay them off. If I’m ever asked to advise a youngster thinking of going to uni, the whole chat would focus on goals, plans and aspirations. How they pay for it is nearly irrelevant when compared to their plan to leverage or derive value from the investment - I see it like going out and purchasing loads of raw materials to get rich, without any idea of what can be done with those materials to actually generate profit. Would I go to university again if I were 18/19, probably not. I would have been able to land my lucrative role in IT without degrees for sure, but the soft skills and confidence I’ve gained from the experience has been helpful - are those worth a total cost to me of £62k though? No.

@MrAsan0 Месяц назад

I decided against uni as even doing what I wanted at college (Studying IT) I was struggling on the exams and coursework. I went for an apprenticeship in IT and am now doing quite well in the field. I always wonder what would have happened if I did decide to go to uni though.

@anthonybrown4874 Месяц назад

A bigger disincentive to social mobility i cannot find the rich obviousely find the cash available easy and those in mega well paid careers easiy pay it. The course pricing is completely haywire no way does a history degree cost as much to supply as a medicine or engineering degree. The Unis all jumped on the maxcharge bandwagon.

@pixies64 Месяц назад

i waited till 24 before going to uni. i had finally decided what i wanted to do and altho i could have self taught only i decided to go university to have a site to attend to help me focus. however covid hit half way through so was half self taught anyway. i kinda regret the cost as was thinking ill pay back asap but after i found out about the cut off i wasnt worried so much and im not currently at the threshold, though hopefuly soon

@andymcall1986 Месяц назад

Great video. My wife has about £20k left on hers but hasn't been paying it due to part time hours and us being on the Scotland threshold. She's considering going full time again due to the family growing up and we've been doing the sums to see what's worthwhile. Completely forgot to consider the student loan threshold but thanks to your vid we'll factor than in. 28 hour contract at £30k might be the sweet spot. In 12 years it'll be written off.

@carguyuk7525 Месяц назад

I went to uni which allowed me to pursue a career in Geotechnical Engineering. I get involved in the best projects around the world. I work with gifted people. I earn over £100k. Without a degree it would never have had such a great life. Its really important to know how to use your degree to best advantage. If your degree does not directly lead you to a career job you should question its value.

@drln1ghthaunter Месяц назад

Don't think I've ever had a year where my payments were higher then the interest added. Well, 10 years down 15 to go until it's written off and I'm debt free from it.

@jminsh463 Месяц назад

Same here, just over 10 years down and I think this year I may have paid a little more than the interest. Not sure the degree was worth it if I'm still sat in a job paying under 30k tbh...

@scurtumarian8725 Месяц назад

New subscriber here.very interesting stuff ! I would disagree with the conclusion simply because past is not guaranteed to be like the future.if you have inflation and the cap does not get risen eventually everyone will start to make payments and effectively gov will dictate your wage.

@abbie-b6 Месяц назад

wow the new plan 5 is really awful. I was on a plan 2 and even though everything worked out well for me, if I was 17 now I would consider going down the apprenticeship route where a business would cover my fees, or studying abroad where tuition is much lower

@Coppice1 Месяц назад

Think I graduated 17 years ago with about 16k debt so not too bad. Still have 4k to go but as you say interest is 6.25%.(so think i'm plan 1). I probably should over pay but im not going to. My son won't be going to uni, he can get an apprenticeship.

@Brian-ph3zj Месяц назад

Interesting video, I found a loophole years ago by accident, not sure if it still exists? I joined the merchant navy after uni and was earning well above the threshold, I employed a tax accountant every year to make sure I qualified for seafarers earning deductions, (no UK tax). HMRC never asked me for any repayments to my student loan. ( I work ashore now and have since paid them all off though!)

@iBainsy Месяц назад

The site calculator has an interest rate of 1.75%. Is there a way to adjust this? Checking my student finance and my interest rate is set to 6.8%. It tells me I’ll pay it off in 9 years (but I don’t think it’s correct as the interest rate is set to 1.75%) I may have done something wrong?

@DamienTalksMoney Месяц назад

Hmmm looks like I have linked the wrong version of the calculator! Thank you for bringing this up I will find an alternative now

@it05y25 Месяц назад

It's also worth noting that there's no easy enforcement if you work abroad.

@jordan5898 Месяц назад

Great video! And 83% 😂 what were the Govt and SLC thinking

@mattlm64 Месяц назад

It's possible to use pension contributions to lower the qualifying income and avoid paying back student loans.

@lunarossa94 Месяц назад

Those of us who have moved abroad are getting shafted even harder, as the re-payment thresholds are significantly (and arbitrarily) lower, as well as the exchange rates used to calculate their value in the local currency being basically made up. I moved from the UK to Spain this year and, at the same salary, will have to pay 3x what I was paying back in the UK!

@UltraPatate Месяц назад

it's scary to know that some countries have bad educational system, where students must have a big debt with high interest rates to study..

@Maksimszz Месяц назад

the big debt is largely caused by the universities increasing their prices year on year.

@loosabway3400 Месяц назад

@@Maksimszz They had to, as Central Governmentcut their funding.

@JoelJoel321 Месяц назад

The interest rate can go up at any time of the year but it can only go down in September.

@stranglx Месяц назад

Paying off my student loan early was one of the best decisions I’ve made, as it improved my credit score dramatically enabling me to obtain a mortgage, which can be difficult when you’re self employed. It’s a catch 22 problem, you need to pay off loans responsibly to get a high credit score but no one will lend you any money until you have a high enough credit score.

@Drian12_1-pn3oi Месяц назад

How? They said it doesn’t affect your mortgage!

@stranglx Месяц назад

@@Drian12_1-pn3oi unlike other unsecured loans not being able to pay it back doesn’t adversely affect your credit record, in fact I don’t think it appears on your record at all, as it’s taken from your income at source if your earnings meet the threshold to pay it. Paying it off does.

@thwills_ Месяц назад

Hi Damian. Not relevant to this vid but we’ve just welcomed our first child into the world. I remember a while back you doing a vid (or pod) on child investing/where to save for their future, but I can’t for the life of me remember or find it. I’d really appreciate if you could drop me the link to this? Cheers mate and keep smashing it!

@DamienTalksMoney Месяц назад

Old video now but still relevant ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-Ib1C3tujEno.htmlsi=vML9HKH48z-eJ-rn

@wlegna18 Месяц назад

Was just debating today whether to pay off my student loan

@harryhazard719 Месяц назад

What about the three years of missed income from university that can be invested. I’ve saved 50k and would be going into my third year in September. I’ll probably be at 70k by the time I would have finished uni, think about the compounding of that money factored into the cost

@Monk_Duck Месяц назад

Most 18 - 21 year old are unlikely to be able to save the near £2000 a month you have with few qualifications.

@JoeHardacre Месяц назад

@@Monk_Duck I was going to say, what average 18 year old is sat there with an opportunity to not just earn 20,000 but SAVE that much. If you're already in a job earning 30-40k a year then sure, there's an argument uni isn't for you.

@Maksimszz Месяц назад

@@JoeHardacre Its do-able for example I was working in warehouse fulltime with some overtimes while being in uni for a bit but then had to leave cuz workload was catching up. Ill tell you the reason why I still go and the reason is you can move up the ladder in a field such as accountancy and investment banking compared to a warehouse job where you are stuck earning minimum wage. From my experience even if you prove you are a good worker and are very efficient, no one will care in the low-skilled labour jobs. But I feel like if I go into finance then there will be a lot of opportunity for me to gain roles and expand my skills.

@JoeHardacre Месяц назад

@@Maksimszz sure I imagine there are situations where that is possible, but I don't think we should factor in three years of "missed income" to the tune of 70,000 compounded when were talking about the average person considering if education is worthwhile to them

@drspa44 Месяц назад

I graduated with a STEM degree from a decent uni in 2015. Given I also worked part time throughout, in 2016 I had enough for a deposit on a small flat outside London. I focused on working and spent very little. After 5 years, I had paid off both student loan and mortgage and was on ~£70k/y. If I had not overpaid anything, I would have paid so much more interest. Today, 9 years later I can comfortably retire and live off dividends, though choose to work anyway. My main advice is to avoid renting at all costs. It is hard to get out of that trap. Buy a £10K house up north and work remotely or live in your car. Just long enough to take the first step on the housing ladder. Some people at my uni used to sleep in the library, but now work in Canary Wharf. Best of luck everyone!

@schopesonline Месяц назад

Wow! This is incredible! Well done!

@oldskoolmusicnostalgia Месяц назад

It's refreshing to read stuff like this instead of the absurdly patronising advice telling people to become renters. Well done.

@michaildzigajev6848 Месяц назад

Man, I wish I was in a position where I could have done that. I guess it will take be a few years longer to get to the same point, although house prices these days are insane.

@drspa44 Месяц назад

@@michaildzigajev6848 I'm assuming remote work is not an option for you, as that would make finding a flat or even a small house a lot easier. I suggest googling IMD CDRC map and looking into commutable suburbs that are coloured in red, as these will offer the best value in £/sq metre.

@user-gz2os8mi9h Месяц назад

Congrats. Is there a £10k house up North or do you mean £100k Apartment?

@mcgamer4474 Месяц назад

I spent 3 years at university in scotland for a cyber security degree, along side the lock downs unable to get a chance for summer experiences with companies, working 2 jobs along side studying. I could of easily got my honours but it was too much especially when having a dependant aswell. My Degree is useless for being in a high demand industry nobody cares about the degree or the effort put in. I honestly hope less people go to university and just spend a year studying as you'll learn more and have more time to actually gain experience unless it's to be a lawyer or a doctor

@tiny8626 Месяц назад

Please don't go to university. Please.

@angusharley5947 Месяц назад

I did a biomedical science degree. It wasnt even accredited despite bring from a top 20 uni meaning I had to do a masters to practice as a biomedical scientist. If it wasn't for my masters in physician associate studies, my first degree would have been a total waste of time.

@stuartslyper1479 Месяц назад

If the banks designed a loan product which the average person will never pay off (because of the default design of the product) they’d be hauled before the regulators and fined.

@Maksimszz Месяц назад

yeah but the government can do it, you wanna know why? because of National debt, just keep it piling and piling

@michaelbevan1081 Месяц назад

Never had one. I just didn’t have the grades

@greg_nicholls Месяц назад

I’m a bit confused by some of this video, seemingly framing your loan repayments as a choice. Surely it’s always coming out of your paycheque (9% over 27k) and so as long as you’re working and earning you don’t have a say in the matter (beyond repaying it off in one lump sum if you can). Have I missed something?

@samuelloification2749 Месяц назад

It's a choice if your over pay. You have to pay beyond tax breaks like pensions etc

@williampaabreeves Месяц назад

Standard SFE loans are currently at 15% per annum. My source is my own loan, I'm just finishing Uni right now, and the loans of all my peers. With this interest rate, over 2 million will be owed in less than 10 years time. All SFE loans are now Plan 5

@GamingRobioto Месяц назад

I was shocked when I looked at mine earlier this year, 6.5% interest and I still have £18,000 left. I'm on a good salary now, but the interest rate is so high that I'm barely paying it off.

@chubuking Месяц назад

I recently paid mine off as a doctor - £70,000. Eye watering money but it worked out I would pay £200k back at least.

@andrewgilroy6847 Месяц назад

Same situation for me as a doc as well. If you are in that bracket where you will just about pay it back in 25 to 30 years and you have the opportunity to pay it off now. It might be worth it. I prioritised getting a house first then paying the loan back then when that was done I started investing in index funds

@TomsPersonalFinance Месяц назад

That really is eyewatering but well done on paying it off - huge achievement

@wl660 Месяц назад

As a doctor, just work 2-3 days a week, and plan to never pay it back. Let’s be honest, you study for 6 years minimum, so have the highest debts, yet your early Jr Doctors salaries are SO LOW…it’s a counter productive system.

@Lolatyou332 Месяц назад

@@wl660 How would working part time solve anything though? I don't do part-time work just because I have to pay taxes. You ultimately will be better off if you make more money even if you receive penalties such as this example.

@alphadraconis9898 Месяц назад

It’s funny but the only young people near me who have managed to get onto the property ladder are lads with white vans

@theguy9067 Месяц назад

I think I am playing 6.25%. I am quite close to paying it in full. Over paid by a bit but not much. Its only come to my attention because I saw the 6.25% Interest would save me some monthly money if I pay it all off. All in all I do regret going to university. I could have taken a cheaper path for sure

@user-fj9kt1zh2n Месяц назад

When you think about it actually doing a useless SURF degree and you end up not making much money in life, you basically got a free education, so the incentive is to actually go.Its the high earners you need to think about.

@Lolatyou332 Месяц назад

That seems like a conflict of interest for the college... The people who earn the least need the jobs the most and get less.. If they just hire cheap professors to do the majors that don't make any money, they can effectively charge whatever they want? Just not sure I understand how this is good for education.

@JimP-tc7gg Месяц назад

My beef is just how difficult the Student Loans Company are to deal with when you live abroad. They insist on communicating almost exclusively via paper letters and telephone, like its the 1950s.

@JonathanWillis Месяц назад

Telegrams were still in use until 2013, so they have moved with the times, somewhat..

@stephen2203 Месяц назад

Just change the ringtone on your phone, you'll be fine.

@boomdaus Месяц назад

BTW as a mechanical engineer that gradutated 2020 that has £42k left on my loan. That earn £31k currenly and does 5.5% pension contribution and assumes a 6% pay rise annually I do not see a case where paying off my loan would be better than simply putting that lump sump in to a index fund or Pension Alternatively on my postgrad loan from 2021 I payed it off within the first Tax year as I would keep me aproximatly paying no intrest or extra monet to the SLC vs all the money I borrowed or even paying back less that I ever took out