petej + repayment   22

Interest rates & How Not to Write About Student Loans | Critical Education
It is therefore very disappointing that a Guardian personal finance journalist has churned around a press release from “Save the Student” and made all these mistakes (and more). The article never mentions how income contingent loans work (the brief reference to a repayment threshold doesn’t explain income contingency) and leaves the reader with the suggestion that commercial loans or (re-)mortgaging might be a cheaper way to finance study. They aren’t likely to be: in addition, SLC Student loans have built-in insurance, they are written off in the event of the borrower dying or becoming unable to work through disability.

By all means criticise the cost of English HE – I do – but don’t thereby drive potential students into the arms of commercial lenders and much more onerous debt.
education  higherEducation  universities  students  loans  debt  interestRates  inflation  repayment  income  dctagged  dc:creator=McGettiganAndrew 
april 2017 by petej
Raise interest rates on old student loans, secret report proposes | Money | The Guardian
"At the moment, the interest on all student loans taken out before 2012 is capped. Graduates pay interest at either the RPI measure of inflation or banks' base rate plus 1%, whichever is lower.

But in the privatisation study, Rothschild found that the rate-cap was a major deterrent to potential investors, who worried that if inflation outstripped the base rate they would lose out on returns.

In order to sell as much of the loan book as possible, the financiers advise that the government underwrite the risk with a financial instrument called a synthetic hedge, in effect using the public finances to guarantee returns to private investment.

Alternatively, they suggest dumping the cap on loan rates altogether. If that proves impossible, the team suggest "an 'offer of compromise', including a payment holiday, or an interest-free period or a different cap"."
education  higherEducation  universities  students  loans  interestRates  privatisation  repayment  UK 
june 2013 by petej

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