# Thread: the meaning of this paragraph

1. ## the meaning of this paragraph

Could anyone please explain this paragraph in easy way?

The government will lend students the money for fees, which will be paid back when they graduate and begin working. The fees will not have to be paid up-front.
The threshold at which graduates have to start paying their loans back will rise from £15,000 to £21,000. This will rise annually with inflation.
Each month graduates will pay back 9% of their income above that threshold.
The subsidised interest rate at which the repayments are made - currently 1.5% - will be raised. Under a "progressive tapering" system, the interest rate will rise from 0 for incomes of £21,000, to 3% plus inflation (RPI) for incomes above £41,000.
If the debt is not cleared 30 years after graduation, it will be wiped out.

Thanks a lot

2. ## Re: the meaning of this paragraph

The gov't will loan money to students. The students will not have to pay the money back until they graduate from school and get a decent job. If the student never gets a decent job, he never has to pay the money back. If he does get a decent job, then he pays back the money. Depending on the income the former student earns, he will have to pay back the money at a progressively higher interest rate.

3. ## Re: the meaning of this paragraph

The government will loan money to you so you can pay for your education. You don't have to start repaying the loan until after you graduate and you are earning more than a certain amount. If you were to graduate today, for example, and you earned more than 21,000, then you would have to start repaying the loan. If you graduate today and earn less than 21,000, then you do not have to start repaying the loan yet. That 21,000 figure will be going up at the rate of inflation, so the figure will probably change by the time you get there.

Let's say, for instance, you graduated today and started earning 33,000 immediately. Then you would be required to send 90 per month to repay the loan, because you are earning 100 per month above the target: 33,000 - 21,000 = 12,000 per year above target. Each month you are 1,000 above target. 9% of that is 90.

That's how much you will pay, but not all that money will go toward paying back the money you borrowed. You must also pay interest on the loan, and that will vary, depending on your income. Right now, if you are making exactly 21,000, then the interest rate is zero. As your income rises above 21,000, so does the interest rate until it reaches a maximum of 3% if you earn 41,000 or more, and that 3% rate will change along with inflation as time goes by.

The amount you will be paying will change over time, but the goal is to help you get an education without taking all your income to repay the loan. If you are still making payments after 30 years, then the loan will be wiped out and you will no longer have to make any more payments, no matter how much you may still owe.

4. ## Re: the meaning of this paragraph

Many thanks to you all,,you really helped me to understand the idea very well

thanks again

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