Question : What will happen to student loan repayments if there is a recession?
If you have a UK student loan which is taken directly from your salary and is linked to the rate of inflation, what is likely to happen if there is a recession, and the knock-on effects this would have? Can anyone enlighten me?
- asked by mot01
All Answers:
Answer #1
So long as you are earning above the threshold forrepayments, you continue to pay. If you becomeunemployed, you do not pay until you are earningagain.
- answered by snookler
Answer #2
Just the same as any other loan - it will have tobe repaid (as long as you are working). However,if you are not working, it stays until youare.Sorry - a recession is no excuse for gettingout of repaying it!
- answered by creambunmum
Answer #3
As the student loans company work out the rate ofinflation each year as defined by the retailprices index it changes annually and you areinformed of this in your statement (at the momentit's around 2.4%)Therefore this could rise or falldepending on the yearly situation, normally not byvery much, however a recession could cause a moresignificant change.Of course you only pay back 9%of any earnings you have over £15,000 regardlessof the debt you have and the interest applied soyour payments themselves won't change. All asthat will happen is the yearly interest applied toyour account will be higher or lower.
- answered by Julesc
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