Student Load Advice Please

Like what? The interest rate doesn't look too extortionate. Besides, although he may not have had any benefit from the course, the loan presumably paid for living expenses rather than course fees, right? And he did spend the money, didn't he? I don't see why you think he shouldn't have to pay it back.

Not living expenses as he was living at home with us at the time. It was a local uni. As far as I know the loan was just for fees and books and stuff.

ind out how much the initial loan was for, rather than jump to conclusions about an "extortiante" interest rate.

May be worth asking him how much the total amount was, and what it was spent on. Better to check now than complain, and find out that he did indeed piss £5000 against a wall. There`s quite a few years interest to be considered here too.

7.5K sounds about right for the max of about 3.5K/year plus interest. Interest is pegged at inflation (think in the coming year it's going to be 0% not negative), so it's fairly cheap debt.

If you think there's been some kind of mistake then worth chasing, and I would make sure they're aware his current address/etc, but otherwise it'll just sit there slowly accumulating interest. If he gets to 55 without earning over 15K then the debt is wiped clean, otherwise he'll pay it back at 9% of earnings over 15K, with no impact on his credit history. If it were any other kind of debt the problem would be much, much worse.

Theo

Having looked into this a bit further I'm not quite so concerned. It just came as a bit of a shock when I opened the letter this morning. Personally I hate having debts hanging around and my instinct has always been to pay them off as soon as possible. However, it seems that with student loans the best advice is not to pay them off early. Any spare cash that you might consider putting towards paying off the loan would be better placed in a high interest savings account (if there still is such a thing). Much discussion about this topic on the Money Savings Expert website.

Just one point - the age for when the loan is written off is 65 not 55 if the loan was taken out before 2005/2006 otherwise it's written off after 25 years.

John

you are one of many my dear chap..............

At 21:36:27 on 16/07/2009, Nodge delighted uk.finance by announcing:

It used to be 45, or if you buggered off abroad for a while.

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Ask him? Why? it's none of the OP's business what he spent the money on. If this guy was at university around 1999, he's late-twenties at least by now. Old enough that Mummy and Daddy should have no input to his financial affairs (although concern is a good, and natural emotion for a parent). He's definitely old enough and hopefully mature enough to take responsibility for his own debts. If sonny is worried about the rate of interest, or the amount he owes, it's up to hiim to resolve the matter.[1]

If I was the poster, I'd be more concerned that sonny's financial problems would affect the credit rating of other occupants of the address, with the same surname, since the loan company obviously think he still lives there.

[1] usenet is a terse medium. Things sounds a lot harsher written, than they do in real life. This comment is not cold - it's a practical observation.

If the parent wants to get involved in resolving the debt, they need to ask that question. If they want to leave the son to sort it out himself, then that`s fine. The How much and what it was spent on where meant seperately - the how much was meant seriously, to allow a determination if the claimed figure is accurate. The question about what it was spent on was meant more tongue in cheek.