Mar 23, 2012
— read in fullShould you be fined for paying off your student loan early?
Feb 16, 2012
The government has scrapped plans to charge graduates who pay off their loans early.
If you take out a student loan for a course starting in 2012, you only have to pay back 9% of what you earn over £21,000 each year. However, you can choose to pay it back faster if you want to.
The government had planned to charge people extra if they paid back their loan more quickly, so that richer graduates would not be able to avoid paying interest. But it says that the evidence suggests that the people most likely to make extra payments are those earning around £18,000, who would not normally have started paying back their loans.
However, the change doesn’t mean that paying early will always save money: debt from student loans is written off after 30 years, so some people will never have to pay the full loan back anyway.
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