Category: Student Loans

What is the Best Age to take on a Student Loan?

A UK student loan is a way of the government helping to fun higher education for first time students. It is not really a loan as the repayments are very different. They are means tested and will come out of your tax code once you earn beyond a certain salary. This means that the higher earners will make higher repayments and low earners will not repay anything. After thirty years the loans are written off and at the moment many students never pay back the full amount of the loan and therefore none of the accumulated interest either.

Understanding how the loan works is important when you are thinking about what age you should be when you take your degree. You may worry, for example, that because of the loan repayments it might be better to wait until after you have children so you can afford the costs of bringing up the children more easily. But f you take maternity leave, work part-time or give up work after you have had them then you will be likely to not have to make any repayments anyway.

Some people feel that it is better to do a degree straight after school because it is easier to study when you are used to using your brain in that way. However, some adults are always learning. It is also worth considering whether you are really sure about what you want to study. It can be very difficult planning your future career at such a young age and it could be better to get some work experience first so that you have a better idea of what you want to do.

There may be some people that fee that if the government changes then another party may bring back free university places and so it would be better to wait for those so that there will be no need for a loan at all. Although this could be a good idea, if you really feel that another party could get in, you have to be sure that they will stick to their promise of providing it for free. It may take time t pass this legislation and even if it was promised it has to be approved by enough MPs for it to be made a new law. This could mean that it is not worth the wait as you could be waiting a very long time. It will all depend on your reasons for wanting to do the degree as tow hether you can afford to delay or not.

There is a worry that if young people have a student loan, it makes them feel that debt is acceptable and encourages them to borrow money because they have already got a loan. It is therefore important for parents to help their children understand about different types of borrowing and that there is a difference between borrowing money for an education which you may not have to repay anyway and using a credit card to pay for drinks at a bar on a regular basis and not repaying it in full each month. It is important for students to know that a student loan is not really a debt and repayments are not really loan repayments, they are just an adjusted tax code, so you pay more tax if you have had your University education paid for by the government but only for three decades if you earn over a certain threshold. So as long as they understand this, then their age is not really important.

As a student loan is very different to other loans, age is not so much of a factor. If you have a lower income due to taking maternity leave, ill health or any other reason then you will not have to pay so much in repayments, if anything at all. It may be worth thinking more along the lines of whether it is the right time to do a university course. Consider whether you think that you have enough experience to know whether a specific course is the right one for you or whether you want to wait and get a job first and try out some different career options before making that decision and therefore delay doing the course.