Getting straight into debt? (Student Loans Co.)

Member Name: jpegington

Product:	Student Loans Co.
Date:	29/04/06 (675 review reads)
Rating:

Advantages: Pays for your Degree

Disadvantages: Loads of debt when you leave uni

Ok, now I have not been a student for a number of years and was one of the last few to still get a student grant and had no tuition fees to pay, but still needed a student load to be able to study at Uni. Therefore I ended up with a nice student loan upon leaving Uni.

What is the Student Loans Company?

This is / was in my time a Gov't scheme to lend you money so that you can study and get a degree. The thinking is that you do not repay the money until you are working and earning £18,000 a year (NOTE: This was the threshold when I took out my student loan, this was reduced down to around £15,000 a few years after I had graduated).

When do you have to repay the Loan?

The rules now are that if you are earning in excess of £15,000
per annum then you have to start repaying your loan in the April after you have graduated.

EDIT: As per one of the comments, just to clear up a potential question, the rule is as I understand it, when you start earning £15,000 a year (based on your last 3 pay slips) then you will start repaying your loan in April. Basically the year always runs from April, and you can defer the loan before then, should you be accepted to defer, then you do not need to repay the loan, should you not be accepted (based on your last 3 pay slips as mentioned) then you will need to repay your loan at the amount that the student loans company says.

What Interest Rate is there for the loan?

Current rate (as of 29/04/2006) for people studying 05/06 is 3.2%

OK, my experiences with the student loan company:

Now I will say that I have been very pleased with the service and way my student loan has been handled. I first deferred my loan for a number of years as I was not earning the threshold to repay it at the time, and have since been repaying the loan by Direct Debit.

I should say that I have had no problems at all, I had one slight problem when I forgot to defer my loan and they wanted me to repay a number of months because I had forgotten to defer the loan, however upon discussion with them managed to avoid that. I found them helpful and useful in my situation.

One thing to note is that they do change the rules in some parts as they go along. For example they reduced the starting amount of when you had to repay the loan for me and I have been advised that my loan was sold to a bank (NOTE: I still get the same conditions as before and this has not made any difference to me at all).

I have found the interest rate of my student loan very good and to be honest could have paid it off some time ago if I wanted to, but prefer to keep the money in my bank account for when I need it. This has served me well and will soon have repaid the loan.

One thing I would mention here and I do apologise that it is slightly off topic, but you should consider before taking out a student loan that you do have to repay it. Ignore the whole talk about not repaying it until you earn £15,000, lets face it most jobs a graduate will be going for is going to pay you more than £15,000. Therefore remember that you should you take out your loan and earn £15,000 then you will need to repay the loan and it will not matter whether you can afford to or not. Therefore (and this is the off topic part) do consider all options before going to Uni, including whether and when you will be able to repay the loan. After all unless you are going to gain by getting a better job (that will allow you to repay the loan quicker) you should consider whether starting a job earlier is better. However having said that, I will note that I do not think that I would have got any of my 4 jobs without having had my 2:1 degree.

Anyway, in short my thinking is that the Student Loans Company have been good to me, the money allowed me to study at Uni and I have had no real problems with them that has not been able to be sorted.

NOTE: I graduated in 1998 and my thoughts and experiences have been considered over the last 8 years that I have been dealing with the student loans company.

Summary: No problems for me with this company.