SCARED OF STUDENT FINANCE?

In late 2017, the Sutton Trust conducted a Fairer Fees study on student finance.

This revealed that government changes to student finance introduced in October 2017 - (with repayments now coming off your salary when earning above £25,000 instead of £21,000), will reduce student loan repayments for each UK graduate by around £8,000 at the end of the 30-year repayment window

This reduces the current 'estimated' £55,000 that the average graduate will 'owe' over 30 years after finishing a degree.

The media like to express this 30 year repayment window as "over your lifetime" which is daft, misleading and plain wrong, as the average UK student will have any remaining student 'debt' cleared at the age of 52. With the average British human predicted to live now until over 80 years old.

Remember, in your 50s most people are in the peak earning stage of their salaries, so it isn't a bad deal: as soon as the student finance repayments stop, you're earning the most and suddenly keeping an extra 9% of anything above £25,000 all to yourself.

This can be used on other things such as a private pension, holidays, a new Harley Davidson for that mid-life crisis. 

For anyone going to university (or finishing university) in summer 2018, the average amount of student finance 'debt' you will owe back over 30 years will fall from an average of £55,000 to around £46,000.

This figure's completely and utterly irrelevant anyway, as to what each and every individual pays back.

The media and various organisations which are meant to be helping students to understand student finance are guilty of scaring students, and not portraying the facts and perception of the repayment system correctly.

It doesn't matter what you technically have borrowed to go to university, it's all based on your ability to earn money over the three decades after you graduate, with a fixed 9% of anything you owe being paid back each month.

They could raise tuition fees to £1m a year with £1bn interest on top of it, and it wouldn't make a single bit of difference to your 9% repayments each month as it is based on your salary and only you decide that.

If you're earning under £25,000, you're not paying a single bit back off of your salary anyway. The amount of UK students that will never repay what they borrowed (student loans + any interest put on it) is now set to rise from 72% to 81%.

Only the very high earners will ever pay back everything, and as we've said before, that means they can afford to.

For example, only if you started on £40,000 a year directly on graduating university and enjoyed high pay rises over the next 30 years (your tuition fees repayment window) should you even consider paying your loan back early to avoid any interest they put on it.

These aren't our random musings, they're the calculations of Martin Lewis, CEO of MoneySavingExpert.

For more easy-to-digest info on student loans and what they mean for you, head to our money section.