Should You Pay Off Student Loans or Invest? The Definitive Guide (US & UK)

[@JamesShack]

Thanks for watching! Please do feel free to share your own experiences and strategies below, and hopefully, someone will be inspired by what you've done! And let me know what you think of the video, are there other topics you'd like me to cover? I'm just starting out and would love your feedback!

[@AndrewForte1]

Can you do a 2024 version please.

[@321tryagain]

This is very high integrity content. No clickbait, extremely thorough.

[@faishalreza8220]

That's what you got from a Qualified financial advisor :)

[@jannimcflurry7096]

First time seeing one of your videos, heard the intro and subscribed as soon as you mentioned it. Can already tell how authentic you are and am going to love watching your videos, another gemstone found

[@Yyunm]

Hey man, great video! It would be interesting to see a video on saving for a house, what to prioritize, if a house deposit is more important than investing in stocks, when/ if to take money out of stocks to buy a house etc... I'm 22 and graduated from uni last year, and personal finance really interests me. Would you ever consider a series of videos on financial check ups for viewers? Maybe we give you stats (income, expenses, long term and short term goal etc) and you give advice? Anyway, great stuff! Looking forward to more videos :)

[@JamesShack]

Thanks! Really appreciate the feedback. On the deposit front - yes I’ll definitely do a video on that and cover off mortgages too. For the reviews - That’s a great idea, could work on youtube or perhaps live on twitch ? Could anonymise the person having the review. If you want to get into personal finance join r/Ukpersonalfinance on reddit, best finance community I’ve come across.

[@finlaysutherland9683]

Really good video here! Not many that compare US and UK Student loans, and certainly helps with there being so much influence in the US than some of the people in the UK view student debt in the same spotlight as US debt, which isn't all too handy. Realised how good a deal UK student loans were so personally I've been maxing it out, then investing whatever bit of loan I have left and I'm really happy I chose to do that instead

[@abbicampbell3433]

I’m on Plan 2 (started in 2015) and have only recently started a job meeting the threshold for repayments so have only been paying back for approximately 6 months. My current outstanding balance is ~40k. I am also trying to save for a house deposit and I know that mortgage lenders do not take into account any student loans someone might have, so for me I pay the minimum taken at source with the understanding that it will likely be written off after 30 years

[@andymrkipling]

Currently at 4.5% PER MONTH!!! - Paying £400+ per month with £12k remaining. Left in 2011. Crazy. Pay it off ASAP.

[@jenc7413]

Great video! I love your no BS approach. Keep up the good work

[@JamesShack]

Cheers Jen!

[@paddyboy9579]

Great vid 🤙🏻

[@JamesShack]

Cheers paddy!

[@LiamR90]

I'm in the UK and just about to pay my wife's student loan off. She's in the 17% of people who will manage to pay it off in under 30 years. Not because she's a high earner, just because the loan has £6,000 remaining.

[@bc5269]

Hey James, excellent video. Coming over from r/ukpf I saw that you didn't study finance at uni but are now working in that sector. Would you consider making a video on pathways into the finance industry for non finance/econ students and what that's like at some point?

[@JamesShack]

Roy Zhao Hi Roy, absolutely. Finance is a big area tho so what areas would be helpful? My personal experience is in financial advice and investment management, but there’s accountancy, investment banking, broking , VC, private equity and many more. I can get people who work in all these areas on to talk, so just need to know what’s of interest !

[@jess6235]

@@JamesShack If you could get people to talk from all different financial avenues, that would be incredibly helpful.

[@TomWhitehead1998]

Hi James, I was wondering what your thoughts were on postgraduate loans, as these work very differently from undergraduate loans. For these loans, you have to repay 6% of anything you earn over £21,000 (and this repayment threshold is flat, meaning it doesn't go up every year). The interest rate is RPI + 3 and doesn't change based on how much you earn. So I took out a £11,000 last year that currently has a 5.3% interest rate. Now, I'm thinking due to the lower repayment threshold and the much greater likelihood of earning beyond it, it makes sense to just pay this off in a lump sum if I can? Otherwise I will end up paying much more than 11,000 through salary deductions but over say 10-15 years? Does my thinking make sense here?

[@kassendek4777]

This is excellent!

[@JamesShack]

Thank you! Really appreciate the feedback!

[@Donordoug]

Hello. Brilliant videos. Do you feel this video works the same for mortgage debt at 7% when you have an access mortgage?

[@hanschristianbrando5588]

Part 5: The fact that this is even a question is the kind of dreamer mentality that gets so many people in trouble in the first place. No, don't invest money until you've paid off all your debts, because there's always the risk of losing money, no matter how much research you do on investments. "Gee, then maybe I should play the lottery instead of paying my student loan." Yeah, right.

[@tomroberts3851]

Thanks for this video James! I'm watching it a few years on. I've got lots of investments but now that my UK Plan 1 loan has jumped from next to nothing to 5% interest, I'm really strongly considering paying it off by selling off some of my investments that have done well over the last 4-5 years. It's all quite confusing but I'll definitely pay it off through salary sacrifice over the next few years anyway, so in my mind, I may as well pay it off now and save some interest (appreciate I'll be giving up potential stock market gains and divis from the sold part of my portfolio). I'd appreciate your thoughts!

[@ParksDirectoPawne]

Payoff debt early>making payments for years

[@FlyingFun.]

My daughter is going to uni this year ( UK) we have the money to pay for it ( my retirement pot ) outright but due to those rules we decided she might as well get the loan as she is unlikely to be a high earner.

[@JamesShack]

Right ok, that makes sense!

[@RichardPCUK]

Starting in 2023, the debt is written off after 40 years, not 30. Does that change your thinking at all? I understand this extention of the term from 30 to 40 years is to ensure more people pay back their loan. The interest rate is changed to RPI or CPI + 0% and the threshold is lowered to £25k I think.

[@DavidBeaton1984]

Great video! Can I ask what software you used to make it?

[@JamesShack]

Hi David, thank you! I’ve tried used several over the last few months: Premier Pro - too glitchy and overkill for what I’m trying to achieve. Filmora 9 - good value but it didn’t go well with my Mac, and got really slow when I’d added all the animations. I’m now using Final Cut Pro and I love it, i have a weak little Macbook Air and I’m still able to edit just fine !

[@DavidBeaton1984]

@@JamesShack Thanks, great to know!

[@JamesShack]

@@DavidBeaton1984 no problem. Final Cut Pro also has a 90 day free trial so check it out!

[@4w7thncwt48oi]

What Macbook air do you have? I've just bought an M1 MacBook air and I'm thinking of getting Final cut.

[@yecourse4664]

Hi James, found your channel last night and watched some of your videos, they’re really useful and informative - cheers! On the basis that I have a student loan, but have only graduated recently so have a salary below the threshold to begin paying it back, would you say it makes sense to invest, as the interest on my loan is only going up at the rate of inflation?

[@JamesShack]

It's certainly a rational decision yes.

[@yecourse4664]

@@JamesShack cheers mate👍🏼

[@MaxAtkinsonGuitar]

Hi James, great content as usual. I had a question. I've got student loan (started post 2012) that I will definitely have paid off before the 30 year date when it's wiped and I earn over £48,000 and therefore fall into the 3% interest bracket. Does that mean I should be making additional contributions to my student loan payments and cut some of my investments down? Currently, I invest around 40% of my pay. Thanks!!

[@JamesShack]

Nice! How long would it take you to pay off the loan? It’ll actually be larger than 3%. Check out article below. Only reason not to would be if you’re saving for a house deposit. www.gov.uk/government/news/student-loans-interest-rates-and-repayment-threshold-announcement

[@Andriak2]

12:40 anything you earn*

[@jonathanhowson6420]

I graduated in 2009 in the UK. Last time I checked a couple of years ago i was paying 1.7% interest. Could this be upto around 9% now?

[@NoloshaCusub0]

I graduated around the same time (plan 1). The interest rate is now 3.25% and going up.

[@calarthur]

Also it's worth remembering that if you die a UK student will be written off

[@JamesShack]

Haha thanks for pointing that out Calum. That's one less thing to worry about when you’re dead!

[@ben11409995]

"contact student loans company"😆😆😆 -No email -dont reply to post -3h call wait times Any advice on a way to contact them? I've been trying to 3 years and if I ever get through to someone they tell me to hold then end the call. All I want is a statement of how much interest they have added and how much I payed off which isn't available on the online portal. I think they didn't deduct my first 2 years of payments looking at the interest at the time