Should You Pay Back Your Student Loan Early in UK?

Although there are different types of student loans in the UK depending on when you graduated, the short answer is no. In the UK, the Student Loans Company only collects repayments once you earn over a certain threshold. Even then, they only deduct 9% of whatever you earn above the threshold. If you are unfortunate enough not to earn enough to pay back the loan in about 30 years (that’s 83% of us), then we simply don’t have to pay it back anymore.

Knowing this, student loan debt doesn’t really behave like real debt. It’s more like a graduate tax or contribution you make for the funding you got towards your studies at university.

But, you might argue that there’s interest on your amount owing, and you don’t want to pay interest if you don’t have to. The good news is that the interest rate is so low compared to conventional debt interest that you’d be better off investing or saving the money and getting higher returns. It’s also important to prioritize contributing to an emergency fund in case you lose your job for instance, instead of paying back the student loan. If you voluntarily pay back the student loan in full and then realize you needed the money for something else, you won’t be able to get that money back and you may be forced to go into real debt if you borrow money conventionally.

Three Steps to Take Before Starting Investing

As most people know, investing is a smart thing to do. While you go out to work for the day, you’re happy knowing that over time, your money is working for you too.

Especially with uncertainty over the future of state pensions, investing is a subject that is becoming more important for financial security and freedom going into retirement ages. According to Andrew Craig in his book How to Own the World, anyone under the age of 50 should assume that the government will be in so much debt by the time you retire, that they will no longer be able to offer you a state pension.

But before you jump in with two feet, what are a few things you should make sure of before you start your investment journey?

Pay Off Any Non-Student/Mortgage Loan Debt

There’s no point investing until you have paid off any debt that isn’t from your student loan or mortgage. The reason being is that some types of debt such as credit card debt have high rates of interest. This means that even if you are making a solid 10% return on your investments, you will be paying 20%+ interest rates on your debt – basically placing yourself on the wrong side of compound interest.

Build An Emergency Fund

The last thing you want to do is have to sell your investments because you lost your job or an unexpected expense came up, so before you start investing make sure you have a comfortable amount of cash in a savings account as a security blanket. Selling off your investments can increase your investment fees, but it also encourages you create a habit of doing it in the future too, which can lower your investment returns for years to come. Six months to a year’s worth of expenses should be ample in an emergency fund.

Create An Investment Plan

It’s not wise to just wing it when it comes to investing. Figure out which investment vehicles you want to put your hard-earned money into, and decide what your psychological risk tolerance is. The key is to create a plan and have the discipline to stick to it. Decide the frequency and the amount you will be investing, and how diversified you want to be – whether to buy stocks, bonds, commodities, real estate, precious metals or even cryptocurrency. A lot of new investors will dabble in certain investments, and withdraw their money as soon as any losses appear. The investor that has a solid plan will be able to ride out any market uncertainties because they have already rehearsed beforehand what they would do in that situation.

Policing for Profit: How the Poor Are Being Robbed by the Politicization of Justice

In the last few decades, a vast expansion of federal criminal law in the United States now means that the police have power to formally charge innocent people for doing everyday activities. Most of us feel relatively secure in that we aren’t criminals, but through the politicization of justice, everyday citizens are now being targeted by the state.

According to James Rickards in his book The Road to Ruin, paramilitary style police raids in the United States went from 3,000 to 45,000 annually between 1980 and 2001. That’s over 100 raids per day across the United States in 2001.

The growth of police power in the United States isn’t just limited to raids. People in poor neighborhoods get targeted on the streets, and end up paying fines that essentially tax the poor to meet revenue targets outlined by the city. In neighborhoods like Bedford-Stuyvesant in Brooklyn, New York – where almost half the population is African-American – police patrol the streets to stop and search anyone that “fits the description”. This even happens to people that are walking the twenty yards from their car to their apartment after work, or people that are smoking a cigarette on their porch.

Poverty-stricken citizens have been known to be arrested, strip-searched, and then charged with crimes such as “obstructing pedestrian traffic” (on an otherwise empty street). Although unconstitutional, police deliberately choose poor neighborhoods because their victims don’t have the option to pay $1000 for a lawyer and take the time off work and find the transport to go to court to seek justice. Instead, their hand is forced to pay a $500 fine and accept a criminal record that harms their job prospects.

So why are the police doing this? In recent times, the United States has had a problem with the amount of sovereign debt they are taking on, and cities are running on budget deficits too. The police in the cities are therefore tasked to generate revenue from the poor. They’re even incentivized and rewarded, and competitions are held for officers to try to generate the most revenue.

Police in the United States also have the ability to seize assets after an arrest before conviction. Even if proven innocent, the accused often do not have the resources to fight to get their assets back. The assets get shared out among people involved in the investigation to boost revenue in resource-limited localities. Highway patrol effectively enact a state-sanctioned highway robbery.

Not only is there obvious cost to the poor, there can be a cost to police too. Violence against officers is much more likely when people know that the police are effectively corrupt and unconstitutional. The reports of police brutality in the United States don’t seem to be going away any time soon either.

It’s hugely disconcerting to know that the state has the power to formally charge anyone they wish to – we are all effectively felons. The ever-increasing surveillance state has been demonstrated by people like Edward Snowden, a whistleblower that worked for the Central Intelligence Agency. The government are able to collect data from social media websites, the NFC and GPS on your cell phones, CCTV with facial recognition and even toll booths you have driven through. The digitization we have experienced in our lifetimes means that there is no such thing as privacy anymore. The only question is whether your time has come yet.