We’ve all seen the headlines shouting about students graduating from uni with tens of thousands of pounds of debt, but all is not as bad as it seems. Really.
The cost of university might sound like a lot, but the amount you’ll actually repay is what matters, and that differs from student to student.
Student loan repayments are calculated based on the amount of money your son or daughter earns once they leave university, and they’ll only start repaying their loans once they’re earning enough.
So how much will they be shelling out? Possibly not as much as you think. Student loan repayments are just 9% of anything your child earns over the £21,000 threshold. It’ll come out of their salary automatically each month, so it will barely be noticeable!
The loan repayment system is really just a graduate ‘contribution’, and is constructed so that, on the whole, the students who gain the most financially out of uni contribute the most. This means that if your child is on a low wage after graduating, they’ll either pay very little or nothing, and if your child is earning lots, they’ll pay more. Seems fair enough to us.
Plus, after 30 years, any remaining student loan will get written off. See? Not so bad after all.