Joe Seddon graduated from university six years ago but despite making regular repayments on his student loan, he had hardly chipped away at the £40,000 debt due to interest
An entrepreneur has explained why he decided to pay off his £40,000 student loan in one go, instead of putting the money toward a house deposit.
Joe Seddon, 27, graduated from university six years ago but despite making regular repayments on his student loan, he had hardly chipped away at the £40,000 debt due to interest. He calculated that, over his lifetime, he could end up making repayments of £80,000 or more.
Joe, who studied Philosophy, Politics and Economics at the University of Oxford and now earns an “above-average” salary, had borrowed £27,000 of tuition fee loans and just under £13,000 in maintenance loans. He was on a Plan 2 repayment, the interest of which is now 8%. How much interest you’re charged depends on when you went to university and which plan you’re on.
Joe, who rents in London and now runs his own business, Zero Gravity, which mentors young people from low-opportunity areas into university and work, told the i : “I got to the point, where I thought if I don’t do something about this loan, I’m probably going to end up paying around £80,000 over my lifetime to pay all of this off. That just doesn’t make economic sense. I thought if I don’t do this now, it’s going to cost me dearly later down the line.”
Which student loan plan should I be on?
Plan 1: If you started your course before September 1, 2012 (England and Wales) or after September 1, 1998 (Northern Ireland)
Plan 2: If you started your course between September 1, 2012 and July 31, 2023 (England) or after September 1, 2012 (Wales)
Plan 4: If you started your course after September 1, 1998 (Scotland)
Plan 5: If you started your course after August 1, 2023 (England)
