Student Loan Calculator

As I've just finished my first degree, I've started to think about how much it's going to cost me to pay the student loan back. As I'm part of the old system whereby one starts to pay over the £15,000 threshold, I wanted to know it would work. I had a quick Google and found this handy calculator which not only gives you your student loan repayments over a year, a month and a week but it also gives your tax contributions over the same time periods for a given salary. The calculator can be found at : http://listentotaxman.com/index.php .

Useful
It's quite a handy tool as I've recently been working as a student ambassaador to young people during higher education presentations. The bulk of the content was about student life but there was some material on student loans and repayments. The main theme was that on the new system, if you earned over £21,000 then you had to start paying your loan back and then if you earned £24,000 as an example, you would only pay back about 9% per year. This got me thinking about my own loan and how it would be paid back.

Prospects
As I'm starting on the road toward being a chemical engineer, I had a look at representative starting salaries for entry level workers and the median was around £22,000. As I'm 21k in debt, this salary wouldn't even start to pay back the student loan as the interest rate on the loan is roughly 2%pa. 2% interest on 21k would add about £800 to my existing debt and contributions from my wages would only pay about £720 so I'd be getting more indebted even though I was earning the average wage for a UK worker.

Many graduates from past years in a job that isn't in their preferred line of work because of the increasing competiton from increasing numbers of graduates. This is a scary prospect because as the graduate works the lower paid job, the interest builds on the loan and compound interest occurs. This lengthens the period over which the graduate will be paying their loan for.

As there are many people set to not reach the new minimum salary for repayment, there will be a great number of new graduates in massive debt to the Student Loans Company for a large portion of their lives.

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