Busting the Myths around Student Loans
Unless you look into the situation properly, you have probably heard lots of things about student loans that are confusing and often a myth. Most students need the loans to get through university, but before you sign on the dotted line you need to understand how they really work. Anything mentioned here will be the current situation, as it is not unusual for the government to change the rules at very short notice.
You Cannot Go To Uni If You Have Not Got The Money
Many, many years ago this was probably true. Only the children of rich families could afford to go to University. There used to be granted to help the poorest of students, but these were means tested. This meant that there was a group of students who were neither rich or poor that could not afford to go. Then student loans were introduced, and that made it possible for all students to go to the university they were accepted in.
When your application has been processed, the Student Loans Company pays the fees straight to the university. Students can borrow additional money for living costs as well.
You Have To Start Paying As Soon As You Start Work
You do not start making student loan repayments until you are earning more than the threshold, which changes every year. It is currently £1527 per month. Anything you earn above that you pay a percentage of to the Student Loans Company. This means that if you earned £2000, the £1527 is deducted from it and you then pay 9% of the balance, which is £42.00.
Your Loan Will Be Written Off After 30 Years
This myth is partially true. After 30 years if there is a balance left on your student loan, it will be written off, but that is not as straightforward as it sounds. It depends when you started in higher education and how old you were when you made your first repayment. If you began Uni in 2012 or after, the 30-year rule applies and the balance will be written off after that time. Prior to that, the rules vary though, and they are different in Scotland as well.
You Cannot Pay Them Off Any Sooner
This is probably one of the biggest myths of them all. The amount you have to pay is deducted through your payroll by your employer and sent to the Student Loans Company on your behalf. If you want to be rid of the debt and are wondering how to pay off student loans fast, you can make extra payments yourself. They do not have to be regular, or a set amount, but each time you send something the amount you owe will be reduced.
Some graduates are so intent on clearing the debt they take on a second job, and others consolidate it into a new loan with any other debts the incurred while they were studying.
You do not want to be worrying about money when you should be concentrating on your studies. Student loans are there to help you through, but it is quite understandable that you want to be out of debt sooner rather than later.