How to Get Free Money From Student Loan

I’m Alex Tarrant for interest.co.nz. Welcome to a special report on student loans particularly how to make money of the student loans. Under the current system, a student can borrow up to a hundred and fifty dollars a week in living costs. That’s going to be changed in October to a hundred and fifty-five. Now remember, under this current system you only pay back what you borrow. There’s no interest on the repayments.

Students can choose what they’ll do with the livings costs money, they can spend it or they can save it. If the student is able to save it, they can invest it in account that accrues interest. That means they basically are getting money free from the bank for money that they invested, that they borrowed from the government. Now we did some calculations using an Arabic plus online point account with 8.3% interest per annum, and we also subtracted tax on the interest earned. If the student banks the hundred and fifty dollars per week of 37 weeks of the year, that would earn a hundred and thirty six dollars in interest.

Now that’s not much but it gets better. Over three years, student will have earned $1,659. Over five years, say the student’s doing a masters degree, that figure will be almost $5,000. Over 7 years, student would have borrowed have a total in their account $51,047, $39,900 of that would have to be repaid to the government, there is $11,000 worth of interest earned into the students’ pockets.

Now, that’s just the maximum amount for the living costs borrowed and invested. Even if you spend some, students will be able to make money. A student that needs $50 in living costs can invest a hundred. Remember, they’re allowed to borrow up to a hundred and fifty dollars and that soon will be a hundred and fifty five. Over three years, student will have made $1,115 in interest, up to 5 years, $3,300 and up to 7 years, $7,459.

That’s after investing $100 a week for 37 weeks a year. Now that just gives the student an incentive to borrow the maximum amount possible and invest that which is not spend. Now naturally that’s going to change the calculations at least for student who is still studying. The interest earned or perhaps pay off the students’ overdraft and will definitely help pay off seven years of tuition fees. That’s $11,000. I’m Alex Tarrant for interest.co.nz. That’s a special report for student loans.