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Student course fees - when does interest start to accrue?

Last post Wed, May 09 2012, 10:11 PM by maxsteam. 3 replies.
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  •  Wed, May 09 2012, 10:11 PM

    Re: Student course fees - when does interest start to accrue?

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    My feeling is that it's a good interest rate and the terms are good too. Unless I have a lot of money at the time, I will be suggesting my children take up the official student loans but avoid commercial credit when that time comes. I would, though, want to be sure that they were committed to whichever course they were taking otherwise it will be wasted money.

    It is a lot of money and my personal preference would be to have fewer university places and greater per student funding.

    The repayments are calculated as 9% of the portion of the salary that is over £21k which is likely to mean, with interest of around 8% being added, the debt will never be fully repaid by many graduates if they just pay the minumum. The time that I would consider stepping in to help repay the loan would be if it looked like the amount was going to become unmanageable.
    • Post Points: 5

  •  Wed, May 09 2012, 8:49 AM

    Re: Student course fees - when does interest start to accrue?

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    Thanks for that Maxsteam. It didn't mention an interest free preriod so I think I will therefore shop around for a cheaper loan as this doesn't sound like good value at all apart from the fact that my son has a very long time to pay it off and he only has to start doing that when he gets a job with a certain level of salary. In the back of my mind though is the thought that it could possibly be scrapped due to successive governments possibly turning things around but then again, when has any government scrapped the idea of other people owing them money !!! Have you any further advice on what I should do?
    • Post Points: 20

  •  Tue, May 08 2012, 9:13 PM

    Re: Student course fees - when does interest start to accrue?

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    If the 8.3% is an APR then interest will be added as soon as the money is handed over so, for each £1k that is borrowed, £83 will be added each year (or £6.67 each month). I would have expected that, if there was an interest free period, it would have been clearly mentioned.
    • Post Points: 20

  •  Tue, May 08 2012, 3:08 PM

    Student course fees - when does interest start to accrue?

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    I have a son starting uni in Oct 2013.

    His course fees are £9k P.A.

    I have been to the government website and entered his d.o.b., date of course, post code etc... and it identified that the loan would be charged at 8.3%, and there are no early repayment penalties.

    My question is - when does interest start to accrue ? Is it :

    1. day 1 of receiving the money

    2. day 1 of the course

    3. The day he finishes the course

    4. The day he graduates

    5. The day he gets a job which fulfills the criteria that ensures he has to start paying back the fees plus interest

    I need to know as I may as well shop around for a proper loan as 8.3% is very high. If it's as soon as he starts a job then I won't shop around I'll sell my house and pay it off when he starts work.

    Can anyone help as the website does not state this?
    • Post Points: 20