Advice from an insurance broker

Ruapehu Bulletin, Volume 12, Issue 553, 13 September 1994, Page 6

Advice from an insurance broker

By

Warrick

Funnell,

independent insurance broker Question - My daughter wants to take two years off and get a job to save and pay for her university fees. Ican 't see why she can 't get organisedand geta student loan. She says it's because she doesn 't want to end up owing her life before she gets started. Can you give us some advice to sort out

this dilemma? - Loving Mum Answer - The short answer is your daughter can get a student loan and it may amount to quite a large amount to repay. If your daughter was to go to university for four years and borrow say $8500 per annum (the total cost may be closer to $12,000) at the end of her studies she would owe $31,079 when she graduated (the current interest charge on loans is

7%). Assuming she would earn $30,000 pa after graduation it would take her approx 15 years to repay the loan assuming her salary has modest increases. If she only has to borrow $5000 pa the answer under the same circumstances would be about 7 years.

I trust this will give some information to assess the choices. Disclaimer - The advice given here is of a general and non-specific nature. It is essential to seek full advice for each individual case before any action is taken.