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This system, in a way, exists in the UK. We have a single (govt sponsored) source of student loans and repayment is taken out of paychecks automatically. In the

This system, in a way, exists in the UK. We have a single (govt sponsored) source of student loans and repayment is taken out of paychecks automatically. In the pre-2012 scheme it's 9% of everything over £20k (roughly), where the median salary outside of London is ~£25k. For me, my student loans were about £20k overall (including living costs) and I'm paying back about £2.5k/year from it. Most of my friends are never going to pay it back. However, it's not really put much burden on universities as they get the money immediately and then the losses from non-repayment are absorbed by the government.

pricechild 10y ago
> Most of my friends are never going to pay it back. It scares me that people are taking on these loans with that assumption, spurred on by people like Martin Lewis. The government has changed the rules before... they may change them again. To be fair to Mr Lewis, he apparently put his money where his mouth is and engaged lawyers to challenge the recent changes, but I haven't heard of any results... http://www.telegraph.co.uk/finance/personalfinance/borrowing/loans/12049856/Martin-Lewis-tackles-Government-over-student-loans.html http://www.telegraph.co.uk/finance/personalfinance/borrowing... Does anyone know if it was just posturing for the press at the time, hoping we'd forget about it? Was there ever a ruling or result?
iaskwhy 10y ago
What happens if you take a loan to study but can't pay it back? I'm thinking it makes it impossible to eventually get any other credit like a mortgage?
- kelnage 10y ago
  Nothing - under the current rules the Government writes off the debt after a number of years (either when you turn 65, after 25, 30 or 35 years, depending on when you got the loan and where in the UK you went to Uni). Also, having a student loan has little to no effect on obtaining bank loans or mortgages.
- pricechild 10y ago
  > if you started higher education between 1998 and 2011 your "post-98"-type of loan does not show up on credit reference agencies. https://www.theguardian.com/money/2012/sep/24/student-loan-affect-credit-rating https://www.theguardian.com/money/2012/sep/24/student-loan-a... (I don't believe it's changed since)
- gambiting 10y ago
  It doesn't work like a normal loan. So if you make below 20k a year, then you don't pay anything. But you are not "missing" payments or anything like that, it's just that you make less than 20k, so literally nothing is due. If the balance after 40 years(or whatever it is) is still not zero, then the remainder is forgiven by the government. Paying off the student loan has no effect on your credit score as it doesn't even show on credit checks. My student loan for getting a BSc and MSc in Computer Science at one of the top universities in the UK is about ~12k total. But it's reassuring to know that if I lost my job tomorrow, I wouldn't have any payments to make until I found another job.
  - mjevans 10y ago
    I suppose the economic theory here is that they enriched the population and hopefully kept someone in a line of employment that's beneficial to society instead of nose-diving in to drugs, crime, or some other 'drain on society'?

pricechild 10y ago

> Most of my friends are never going to pay it back. It scares me that people are taking on these loans with that assumption, spurred on by people like Martin Lewis. The government has changed the rules before... they may change them again. To be fair to Mr Lewis, he apparently put his money where his mouth is and engaged lawyers to challenge the recent changes, but I haven't heard of any results... http://www.telegraph.co.uk/finance/personalfinance/borrowing/loans/12049856/Martin-Lewis-tackles-Government-over-student-loans.html http://www.telegraph.co.uk/finance/personalfinance/borrowing... Does anyone know if it was just posturing for the press at the time, hoping we'd forget about it? Was there ever a ruling or result?

iaskwhy 10y ago

What happens if you take a loan to study but can't pay it back? I'm thinking it makes it impossible to eventually get any other credit like a mortgage?

kelnage 10y ago
Nothing - under the current rules the Government writes off the debt after a number of years (either when you turn 65, after 25, 30 or 35 years, depending on when you got the loan and where in the UK you went to Uni). Also, having a student loan has little to no effect on obtaining bank loans or mortgages.
pricechild 10y ago
> if you started higher education between 1998 and 2011 your "post-98"-type of loan does not show up on credit reference agencies. https://www.theguardian.com/money/2012/sep/24/student-loan-affect-credit-rating https://www.theguardian.com/money/2012/sep/24/student-loan-a... (I don't believe it's changed since)
gambiting 10y ago
It doesn't work like a normal loan. So if you make below 20k a year, then you don't pay anything. But you are not "missing" payments or anything like that, it's just that you make less than 20k, so literally nothing is due. If the balance after 40 years(or whatever it is) is still not zero, then the remainder is forgiven by the government. Paying off the student loan has no effect on your credit score as it doesn't even show on credit checks. My student loan for getting a BSc and MSc in Computer Science at one of the top universities in the UK is about ~12k total. But it's reassuring to know that if I lost my job tomorrow, I wouldn't have any payments to make until I found another job.
- mjevans 10y ago
  I suppose the economic theory here is that they enriched the population and hopefully kept someone in a line of employment that's beneficial to society instead of nose-diving in to drugs, crime, or some other 'drain on society'?