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I can offer you every sympathy. Crazy that there is such a high interest rates on these loans, and that people under a certain age have just got clobbered.
If I were you I wouldn't pay it off quickly, unless you had money lying around that you didn't know what to do with. There is always a chance that something happens - either to the loan or to you. It's pretty much accepted that the majority of these loans will not get paid off. If the last election had gone the other way they may well have been written off. That could happen in the future, especially as a larger proportion of the population end up paying them = more votes in it, year by year. Also your priorities / career direction / health might change in ways you can't forsee.
Not expert advice, just my two pence worth.
frank9755-
Really unfair. Not to get political but I don't get how I know people under 30 with student loans who vote Tory. Also people like my grandparents and friends parents voting to shaft their kids income for life. Crazy
I chat to middle aged people who went for free, got a grant and then got benefits over summer holidays.
2023 starters will repay 9% of their over 25k (lower than mine which is already shit) for 40 years (longer than mine which is already shit)
bobble
Can anyone help me out with some maths/thoughts please.
I am on a plan 2 repayment student loan (pay back 9% of anything you earn over £28k ish) with around 31k in debt. If you are a higher rate tax payer (I'm not), earning over over £50,274, you have a 65% marginal tax rate.
I will likely pay this off in full in the next 30 years organically . I've never thought about paying off any extra from what I save/invest each month as the ~4-5% interest is less than I can get from investments on average in stuff like vanguard. Also a chance I'll stop work early, my salary won't grow, government write it off early etc etc (though this is small).
I am not sure whether to accelerate paying it off or even borrow from family to fully pay it off or not. Why would I do this? Well, the (exorbitant) interest rate is RPI + up to 3%. RPI is 9% at the moment so the interest rate could be 12% in a few months once they recalculate it. Unless the government cap it. This would mean I'd be paying a lot more back in say year 23-30 of the loan when without this excess inflation now I'd have paid it off.
What would you do? I got shafted at uni compared to people a few years older who paid 3k and have less interest, but the current plan is for graduates who start after 2023 to repay for 40 years and have a lower starting threshold makes me feel less unlucky.
Cheers