Ask Martin Lewis: Should You Overpay Your Student Loan? | This Morning

With today being the last day to submit self assessed tax returns - our money saving expert Martin Lewis joins us to take your calls and help with that, and any more of your financial matters.
Broadcast on 31/01/2023
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[@Kj_002]

What counts as a high/middle earner (in regards to paying off student loans) ?

[@doghat1619]

Basically, an average earner will NEVER pay off the student loan and it'll be wiped after 30 years. So the 'interest' on it doesn't really matter, it could go up 100x every single year, and it wouldn't matter to an average earner. A high earner, say someone earning 100k+ a year, is going to earn enough to pay off their student loan, so the interest for them does actually matter, as it'll add up and the longer/more interest they get, the more total they'll end up paying.

[@Kj_002]

@@doghat1619 yeah but if ur earning 100k+ ur gonna pay off the loan within a few years anyway since ur paying like 7k a year minimum, Whats an average earner? Like 40k/yr?

[@katie2295]

To give you an idea, I’m earning about £33k and pay around £42 a month on my student loan. I graduated in 2016 and the interest is high so I have not scratched the surface of my student loan

[@porto1st]

@@doghat1619where are you getting 100k salary from? Even 50k is enough to pay off the original loan in full well before the 30 years. £9250 x 3 = £27,750 Let’s just round it up to £40,000 debt to account for any maintenance loan. On a 50k salary with a plan 2 loan, you’d be paying 9% on anything over £27,295. This comes out to £2043 per year. £2043 x 20 = £40,860. It would take you just under 20 years to fully repay the original loan on a 50k salary with MINIMUM payments. This drops down to 14 years if you didn’t take out maintenance loan. 100k salary is an exaggeration

[@K_V_Konstantinov]

This loan is a scam pretty much. The threshold in my country is unrealistically low, my monthly payments are insane by local standarys and I still owe more money at the end of the year than I did at the beginning.