Loans often come with a bad reputation, especially student loans. But is that so? Should you fear student financing? Should you avoid it and should you try to pay for university yourself? We’ll answer these questions in the following article and we’ll tell you everything you need to know about the topic of Student Loans UK in 2021.
Ignore the price tag. What really matters is how much you have to pay back
Let’s start with what is probably the most important issue. The price tag is what often scares people away. You see a sum of money that looks too high for you to ever pay back and you think that a student loan is not for you. But this is wrong. The price tag, in this case, is completely irrelevant.
What matters is how much you have to pay back.
This depends only on one thing: how much you earn after college. Those who earn a lot after graduating or leaving university will repay a lot. Those who don’t gain too much financially from going to university will repay little or nothing.
Biggest secret of Students Loan Uk – You only repay 9% of everything earned above £27,228 per year
This is very important. We talked above about what drives people away from loans and we agreed that you should not look at the price tag, but rather the amount you have to pay back. Well, what is this amount?
It is not a fixed number. Once you leave university, you only repay when you’re earning above £2,274 a month. This is about £27,228/year. And event at that point you only pay back 9% of everything you earn above £27,228/year.
When you look at it like this, that loan is not as scary anymore, is it?! Of course it is not. And this is not all. If, after you start repaying the loan, you lose your job or your earnings fall below the threshold, your repayments drop accordingly.
But what if I have a job that doesn’t pay that well?
If you have a low wage, you pay little or nothing at all. And you should not feel bad about this. The system for student loans UK is created in such a way that those who gain the most out of university contribute the most. It is created like this so that everybody wins.
Your debt is cleared after 30 years
You start repaying the loan from the first April after graduation. 30 years after that point, your entire debt is wiped. That’s right. After 30 years, you don’t have to repay the loan anymore. It doesn’t matter if you earn above the threshold or if you haven’t paid back the entire sum. After 30 years, your student loan just goes away.
This is why so many people nearing retirement who want to earn a degree actually get a student loan and go to university to study something that has always interested them. If they don’t have a huge pension, they won’t have to pay anything back.
There will be no debt collectors knocking on your door
A lot of people fear debt collectors. This fear is connected to that regarding student loans. But here’s the deal. With student loans, there are no debt collectors.
So how do you pay your loan back? It’s very simple and you don’t even have to do anything. Your student loan is paid just like the income tax. Your employer deducts the repayments from your salary before you get it. Everything happens automatically. Your privacy is completely protected and you will never have to go through embarrassing situations.
Think twice before paying your tuition fees upfront
We can agree that loans are no joke. They are as serious as it gets. But they are also tools created to help the borrower.
In fact, what really makes a loan scary is the borrower’s lack of discipline. No matter the type of the loan, if you have a plan and you follow it, you can both put the loan to good use and repay it without any headaches whatsoever.
It’s the same with student loans. You may think that you don’t need one, that it’s better for you to just pay your tuition fees upfront, but that is a huge mistake. Just consider what we’ve talked about so far.
What do you plan to study? Will those courses guide you to a high paying job? They might not. Different industries pay different salaries. So even though you may spend as much or even more time and effort on your social media marketing courses, you probably won’t earn as much as someone who studies programming and who plans to work in the IT sector.
If you know you’re not going to earn above the £2,274 a month threshold and you’re OK with this, then why spend your own money on tuition fees?! It really makes no sense. You can just get a student loan, study what you love, get a job in that particular field and then just go on about your life without giving even a second thought to that student loan that you will not have to pay back. In 30 years, it will go away, and you will have studied at university for free. This is the magic of student loans UK.
Give us a call and we’ll help you get your student loan for free
It doesn’t matter if you were born in England or if you are an international student. If you want to study in Great Britain, you can get a student loan. And if you need any help or additional information, just give us a call. We will help you find the right university and the right courses, and we will teach you all you need to know in order to obtain a student loan from the British government.