Student Loans In The Uk

Student Loans In The Uk



Student Loans in​ the​ UK
For many students in​ the​ UK their only option is​ to​ fund their studies with student loans .​
a​ company has been set up specifically for this reason and is​ logically called the​ Student Loan Company .​
Now that students do not get grants and have to​ pay their own tuition fees,​ a​ change which has only happened in​ the​ past few years,​ most students end up in​ a​ significant amount of​ debt by the​ time they graduate.
The interest rates on​ these loans are very high and are not set to​ make a​ huge profit but purely to​ cover the​ interest rate on​ the​ open market .​
In addition to​ this,​ the​ repayments are not due until the​ borrower is​ earning a​ set salary .​
Once a​ year the​ Student Loan Company contact all of​ their borrowers and inform them of​ the​ minimum salary requirement in​ order to​ be eligible to​ start making loan repayments .​
The borrower then states their income and has to​ provide proof of​ it​ by way of​ wage slips covering the​ previous three months .​
The Student Loan Company then assess whether they are required to​ make repayments or​ not and if​ they aren’t the​ loan is​ deferred for another year and the​ cycle repeats itself .​
The beauty of​ this system is​ that all of​ the​ loans held by the​ borrower,​ which can be up to​ four in​ most cases as​ that works out to​ one per year of​ study,​ are held in​ the​ same place .​
The interest rates are calculated on​ each loan individually as​ the​ first one has been held longer than the​ fourth and the​ loans would be for different amounts,​ but the​ repayment would be calculated to​ cover all four .​
This would mean that only one sum would be paid per month rather than four separate ones .​
Should a​ borrower fail to​ reach the​ minimum salary requirement within a​ set number of​ years,​ the​ loans are cleared and the​ debt written off .​
This is​ done because the​ majority of​ university graduates will go on​ to​ earn higher than average salaries and so will pay off their loans .​
It also gives a​ safety net to​ those who fail to​ earn high wages as​ repayments can be quite high given the​ total sum many students borrow.




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