# Cullen maths is faulty

Dr Cullen claims that one is disadvanataged by getting a refund of your voluntary loan repayment as one still will pay interest on it until 1 April.

This is true but fails to note it is a trivial amount compared to what you can make. 4 months interest at 7% on $15,000 is $350.

However Mr Banfield may have that $15,000 for a long time to earn money off. We don’t know how much his total loan balance is, but let’s assume he had paid off his entire loan, and that he earns $51,000 a year.

His compulsory repaymenys would be around $300 a month. It would take 50 months to pay back the loan now. If he gets 6% gross interest which is 4% net interest then on average he will get $1,250 which is a gain of $900. Not bad cash for nothing.

This is the worst case scenario. If for example Banfield had another $15,000 owing on his loan and only earns $40,000 a year then he would have full benefit of the $15,000 for around seven years and partial benefit for a further seven years. Yep sure he would have pay rises in that time, but for simplicity sake if he did earn $40,000 he would gain around $6,000 in interest over time.