Should Student Loans Stop You From Going to University?

There has been a lot of talk about student loans in the UK lately. With the costs of university courses rising and the interest on some loans going up it can make those that are coming up to university age worry about it. You may feel that you are in danger of being in a lot of debt if you take out a loan and it could put you off from studying for one.

It is worth remembering that a student loan is unlike other loans. Many other countries that run similar schemes do not call them loans but a graduate tax as effectively after graduating, some extra tax is taken, which is means tested, over thirty years so that some or all of the cost of the course is repaid. It seems that currently many students either understand this or are not worried about the prospect of being in debt because there are more and more students at university year on year.

It is worth giving the decision some thought though, because although there are rising numbers, you need to consider whether it is the right decision for you. If you are not sure what course to study, for example, could it be better to get some work experience first and then decide what to do. It can certainly be worth doing a lot of research about what sort of job you would like and what jobs the course will lead to so that you know that you are studying the right thing. You only get one opportunity to have a student loan, so you need to use it wisely. Do the wrong course and if you want a different degree you will have to find the money to pay for it yourself.

There are also ways that you can keep the loan costs down which could be worth considering, if you are worried about borrowing so much. You could do a shorter course, perhaps two years instead of three. This may lead to a qualification which is good enough to get you the job that you want, without you having to pay out so much money. You could go to a local university and live at home so that you have lower living expenses. You could work part-time while studying so that you do not have to borrow so much money.

It is worth knowing that if you do not earn enough money after the course, then you will not have to pay any back. How much you pay back is determined by your salary which means that you may not have to pay anything back at all or just a small amount. The idea is that it is affordable and that only those that have a very high income will repay the full amount borrowed plus the interest and most others will pay back a proportion with a few paying back nothing at all.

As the repayments come out in your tax code they make little difference to your credit rating either. You may feel this is unimportant as you will not want to borrow, but most graduates will want a mortgage before the thirty years is up after they have finished their degree. You will be assessed on your disposable income to see if you are capable of making the repayments and at this stage your loan repayments will be a factor, but if you are earning enough to be making the repayments then you should have enough money to manage mortgage repayments, the loan repayments are relatively small.

Some people do find debt stressful but as a student loan is very different it is best to think of it in a different way. Try not to think of how much you owe and how much interest is accumulating because this does not matter. Just think about the fact that you will be paying a bit of extra tax for thirty years, if you earn enough and that your education will have paved the way to a more interesting, rewarding and better paid job for you. It will also give you experiences you will not get elsewhere and hopefully open your mind to a lifetime of learning.

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