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shadows of echoes of memories of songs
j4
j4
Don't shop me now
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From: (Anonymous) Date: November 30th, 2008 04:01 pm (UTC) (Link)
The student loan interest rate is currently 3.8% (http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/FinanceForNewStudents/DG_069896).

There are many mini cash ISAs that offer a higher rate than this (http://www.moneysupermarket.com/isa/).

In addition, inflation is currently falling meaning a student loan will be a cheap source of credit in future. Not paying off the student loan early and instead putting it in an ISA with a decent rate is basically free money.
jiggery_pokery From: jiggery_pokery Date: November 30th, 2008 04:28 pm (UTC) (Link)
I could be wrong, I'm too lazy to check and I love offering people the chance to take great joy in correcting me, so here goes.

If I remember correctly, the last time I looked at this, the UK has had at least two student loans schemes. I have no doubt that your assertion is correct for the scheme currently in place, but I do doubt that students of a certain vintage, such as j4 and myself, are enrolled on that scheme - with our scheme possibly (or possibly not!) having loans charged at a different rate.

For instance, the current version of the student loan scheme offers students the chance to pay back a proportion of their income over some fixed sum, whereas I (possibly inaccurately?) recall that the old scheme had repayments that kicked in at a flat rate upon income reaching some level. Thus the old scheme artificially imposed a poverty trap where you were worse off in the short term (though, admittedly, paying off a long-term debt) if your income raised from just below the level in question to just above the level. I am glad that the new scheme avoids this trap.
From: (Anonymous) Date: November 30th, 2008 06:34 pm (UTC) (Link)
Isn't the interest rate the same for both though? (ie approximately inflation).
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