non-spouse director

[TheFaQQer]

They aren't really loans though are they? They are tightening up on things but the general expectation was that you could defer payment until inflation had eroded the value. If you do a quick search you will find around a third have never been repaid anything and chasing people who have emigrated smacks of political bluster. I got a grant to do my degree in the expectation that I would become a higher rate tax payer and contribute to the economy. Government continually tinker with things, to the delight of contractors who get paid to develop systems to support the new rules. It will be interesting to see how the new legislation on contracts with public sector will pan out.

How can inflation erode the value of the loan? Prior to 2012, loans had interest added every year at the same rate as inflation. Since then, the rate charged has been above the rate of inflation so there is no concept of the value of the loan being eroded.

Currently, it's about 55% that aren't being repaid in full because people aren't earning enough to do so - under the current plan you have to be earning £22k and then have 30 years to pay it off (£17k or 25 years if you're on the same plan as the OP, or when you hit 65 for the remainder).

However, that doesn't mean that there is no expectation to repay the loan if you earn above the threshold.

[BigRed]

How can inflation erode the value of the loan? Prior to 2012, loans had interest added every year at the same rate as inflation. Since then, the rate charged has been above the rate of inflation so there is no concept of the value of the loan being eroded.

Most loans don't have a link to earnings. Inflation isn't the right term in the traditional sense, but inflation of earnings erodes the cost of the loan.

[TheFaQQer]

Most loans don't have a link to earnings. Inflation isn't the right term in the traditional sense, but inflation of earnings erodes the cost of the loan.

Current loans attract an interest rate of 3.9%. So you need some hefty earnings inflation to erode the cost of the loan. And if you managed that, then you'd be much more able to repay the loan rather than have to cobble together some scheme to avoid having to repay it