Always worth it! (Student Loans Co.)

Member Name: Boriski

Product:	Student Loans Co.
Date:	06/09/01 (118 review reads)
Rating:

Advantages: Very low interest, No requirement to pay back until earnings reach 16K a year

Disadvantages: None that I can see

As a student entering my second year at Imperial College, London I need all the money I can to fight the poverty brought on by astronomical house prices in our fair nation's capital at the moment.

I chose to take out as much loan as I could, the maximum loan for this year in London is worth around £4700 with all London students entitled to 75% of that amount. The remaining 25% depends on the income of your parents or guardian.

Outside London the current maximum amount is around £3500 with the same 75:25 split.

The third category is for students (wherever they live) who live at home. The maximum loan of this size is around half of the loan (so the size depends again on whether they live in London or not) and enables home students to not be penalised regarding texts, going out and other expenses incurred

I have found the student loan an absolute necessity as despite my parents having put by what they could since I was born and having interest free overdrafts on offer by the bank my rent for my 2nd-4th years once I am no longer living in halls will be high.

Many of my more affluent friends have no real need for the loan and so some fearing any sort of debt ignore it completely and pay the full £1075 tuition fee and live off parental support

I would strongly advise against this. The complex system of the loans board means that you may well end up paying more than you need to. There is no real harm in disclosing earnings to the Student Loans Commision to receive a means testing of how much you are entitled to, both as a tuition fee discount and loan size. Whatever their judgement there is no commitment to take any loan. It seems foolish to make a decision without having all the information on the table.

In fact many of my friends have chosen to take out the full loan despite not financially needing it. This stems from the fact that this the cheapest loan you will ever get! Many of them have chosen
to put the money in an ISA or high savings account and gain the interest. They can do this because they can commit to not paying back the money until they graduate and their earnings exceed £16000/annum and because the only interest on this loan is basically equal to inflation. This small interest basically ties the loan to the cost of living thus ensuring what you pay back is actually 'worth' the same as the amount borrowed

I really hope that this helps you out and remember their are loads of bodies, websites and such-like to help you through the wilderness so don't feel overwhelemed!

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