Before we proceed to speaing frankly about financial obligation more generally speaking, it really is well well worth clarifying that is first there is an impact between student loan debt (so that your maintenance loan and tuition charge loan combined) along with other kinds of financial obligation.
Whilst it really is just normal that you would have the weight of graduating with a big swelling of financial obligation over your face, often the therapy of knowing you’ve got the financial obligation may be the part that is hardest.
This year, one in two of you told us you didn’t understand your student loan agreement in our National Student Money Survey. For the sake of your mental health, we think it’s worth clarifying a few things about why these loans are different whilst we would never describe student loans as a ‘good deal’ and we certainly don’t agree with the interest rates currently charged on them.
4 perks about student loan financial obligation that means it is not the same as other financial obligation:
You only repay once you are making sufficient
Unlike just about any kinds of financial obligation, student loan financial obligation takes into account simply how much you earn and bases repayments with this figure.
An element of the education loan contract is the fact that graduates do not have to repay a cent of these loan until they truly are earning ?25,725 a 12 months and over (you start repaying when you earn ?18,935) if you started uni before 2012 or studying in Scotland or Northern Ireland,. Many jobs that are graduate salaries of lower than ?25k, meaning you do not start having to pay your loan down until many years after uni.
Your repayments just increase if you begin making more
Likewise, how much you repay each is directly tied to your salary month.