It seems that British students are also struggling with increasing student debt. Our neighbors ‘across the pond’ have concerns about how to deal with the situation.
According to the website: thisismoney.co.uk in the article titled: How to avoid student debt disaster: Should parents borrow to pay off loans or let children go £50k into the red? We explain all – British parents are grappling with questions of student loan debt for their offspring. Formerly, decades ago, a university education in the U.K. was within the grasp of a talented student who wanted further education.
Presently, according to the article:
Around 320,000 18-year-olds have applied to go to university in the UK this year
According to the Institute for Fiscal Studies they face average debts of £50,800
If you started university before 2012, rates on loans were just 1.25% (in the U.K.)
But if you started after then, you will pay a lot more
REMEMBER: THIS DATA IS RELEVANT ONLY TO THE U.K.
An interesting twist for British student loans: Unlike conventional loans, the amount British students repay each month after graduation is linked to their earnings (in a certain formula) and after 30 years any outstanding debt is ‘wiped’ by the Government. However, student loan payments are taken directly out of wages by the employer, thus former students cannot miss payments, and their debt does not go into collection. There are a number of other caveats of the student loan system in the U.K. beyond the scope of this article to explain.
The point is, parents in the U.K. (like those in the U.S.) have increasing concerns about how their children will be able to afford a university education and how their loans can be repaid.
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