For many young people, university is a goal, they want to enter into higher education and learn more. Learn more of a specific discipline.

Which is fantastic, education and the more we know, the better.

However, this education and knowledge comes at a price….a high price.

Currently most universities can and do charge £9,250 a year in tuition. And most degrees require three (3) years of studies. This means a student could be faced with over £27,000 of tuition fees to obtain their degree. This is outside of any cost to travel to the university, food, accommodation, and all the other expenses that accompany living.

So how does a fledging student pay for all this? Usually many will take out student loans. That unless the bank of mum and dad have that kind of dosh lying about.

As soon as you say, write, mention loans, it equates to debt. You take out student loans and you are in debt.

This begs the question, is student loan debt worth it?

For many it is worth it, however, there are other avenues to pursue to have a good career that are cheaper.

Student loans are consider “good debt” because many students and graduates go on to earn a higher salary than non-university graduates. But there still is a cost for this, but historically, the repayment of student loans has been not a hardship on borrowers, but more a hardship on the government, and those that make the loans available.

The reason for this has been the ease of student loan repayments.

Unless you earn over £27,295 a year in wages, you do not have to repay your student loans. Then once you breach that amount of £27,295, you only pay 9% of that breached threshold amount for your student loans.

Pretty sweet deal.

Sweet for us as a borrower, not so sweet for the lenders/government.

And while sweet for us as borrowers, we could possibly face a lifetime of debt; we may never pay off these student loans. But on the upside, after 30 years the debts are written off. However, it is 30 years of looking at statements saying you are £20,000, £27,000 or more in debt.

New Proposals For Student Loans

There are some new proposals for student loans, and one is to reduce the threshold for repaying them from £27,295, to £25,000. Obviously this means more graduates or student loan borrowers would be repaying their loans sooner due to the lowering of the income threshold.

The next proposal is to extend the 30 year term where student loans would be written off to 40 years.

This would mean if someone graduated at age 25 from university, they would still owe their student loans until age 65. Almost the age of retirement….although that seems to be going up as well.

While this proposed change and reducing the threshold to repay student loans, gives a better return to the government, it means students could be paying back more than before, and for 10 years longer than before.

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