Student Loan Debt
Table of Contents
What Is Student Loan Debt?
With ever increasing tuition fees, rental prices and living costs, going to university is more expensive than ever. A university can charge its students up £9,250 a year for a standard degree course, with accelerated courses £11,100! Over the course of 3 years, that’s a breath taking £27,750 pounds of debt before we even talk about living costs and rent.
Due to these prohibitive costs, it is incredibly typical for a person to take out student loans and they should, by no means, be considered a bad thing. Unfortunately, for many, they are simply the price of a good education.
Student loans were created as a way of allowing people from any background to go to university without having to think too much about the cost until later. It can help you with:
Tuition Fees
Accommodation
Travel Costs
Study materials e.g. books
Other equipment related to your learning e.g. electronic devices
A portion of the money is sent directly to the university to cover tuition with the remaining amount sent straight to the student.
How Much Student Loan Can You Borrow?
How much you can borrow is based on several factors:
Where you will be living during the course
How much your parents earn
Which college or university you will be attending
Whether you are attending full-time or part-time
Loans are also split into two main categories: A tuition fee loan, which goes solely towards the cost of the course; and a maintenance loan which is designed to cover living costs.
A tuition fee loan can cover the entirety of you fees i.e. £9,250 per year, whereas the average maintenance loan in the UK £6,859. Interest on a student loan is relatively low at between 1% and 1.5%.
Having a student loan will in no way affect your credit score.
When Do I Begin Repaying Student Loan?
There are two sets of conditions regarding the repayment of student loans and they vary based on when you attended your course:
Plan 1: You will begin your repayments as soon as you earn more than £19,390
Plan 2: You will begin your repayments as soon as you earn more than £26,575
Many graduates will begin a job on the lowest salary they will ever earn and sometimes that means their first position’s salary doesn’t qualify them to begin their repayments.
Sometimes, this results in the debt being put to the back of one’s mind. Then, one happy day, when you get a promotion or a salary increase, all of a sudden, those repayments kick in! It can be a shock.
Student loan repayments are typically dealt with through the PAYE system, just like having to pay an extra tax. However, if you are self-employed, it will become part of your self-assessment.
Can My Student Debt Be Written Off?
If you have a Plan 1 student loan, then it will only be written off either when you are 65, or when 30 has elapsed since the April you were first due to repay.
If you have a Plan 2 student loan, then it will only be written off when 30 years have elapsed since the April you were first due to repay.
Plan 1: You will begin your repayments as soon as you earn more than £19,390
Plan 2: You will begin your repayments as soon as you earn more than £26,575
Many graduates will begin a job on the lowest salary they will ever earn and sometimes that means their first position’s salary doesn’t qualify them to begin their repayments.
Sometimes, this results in the debt being put to the back of one’s mind. Then, one happy day, when you get a promotion or a salary increase, all of a sudden, those repayments kick in! It can be a shock.
Student loan repayments are typically dealt with through the PAYE system, just like having to pay an extra tax. However, if you are self-employed, it will become part of your self-assessment.
How Can I Get Help with My Debt?
Whilst a student loan cannot be written off, you may have completed your studies with other debts that make the paying of your student loan more difficult.
If you have other unsecured debts that are beginning to get out of control, then the following solutions may be right for you:
If you live in England, Wales Or Northern Ireland:
If you live in Scotland then the following may suit your needs:
Contact IVA4Me for help. We can help you begin to get your life back on track.
Student Loan Debt FAQs
What Percentage of Students Pay Off Their Student Loan?
For those in higher education, student loans are often the main source of income for both the paying of tuition fees and for covering living costs. But with tuition fees on the rise, cost of living on the increase and more and more people going to university, the UK’s outstanding loan balance is rocketing.
What Is The Average Student Loan Debt?
The costs associated with going into higher education are constantly increasing. Whether that’s tuition fees, rental fees or simply the cost of living, going to university is beginning to become prohibitively expensive for many young people.
What Happens If You Don’t Pay Student Loans UK?
Being a university student can be an expensive undertaking, with ever increasing tuition fees and living costs meaning most will need to take out a student loan. If you complete your studies, then with a little luck and hard work, you have a good chance of being able to earn enough to be able to pay back your loans. If you do not end up earning enough, then eventually they will be written off. However, what if you don’t complete your studies? Some people find themselves in debt to Student Loans UK, because they received student finance, but then suspended or left their studies.