Panicked about interest on your student loan statement? For many it’s nonsense!

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.




Please click 'post reply' to discuss below.

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  • Ed-1
    Ed-1 Posts: 3,860
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    Forumite
    edited 18 July 2016 at 3:08PM
    MSE_Eesha wrote: »
    This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.




    Please click 'post reply' to discuss below.

    "Worse still, apparently (and I’ve no independent confirmation) the Student Loans Company had advised them to volunteer to pay more as that would help reduce the interest."

    That's really bad and it wouldn't surprise me given the buffoons employed at SLC.

    What they should have advised (and what Martin could've advised) is that there is no need to wait 30 years when you are permanently unfit to work as that is another valid cancellation term.

    Regulation 19 of the Education (Student Loans) (Repayment) Regulations 2009 provides the criteria that must be met for a loan to be cancelled:

    (3) The Authority or loan purchaser must cancel the borrower’s liability to repay the student loan when one of the following occurs—

    (a) the borrower dies;
    (b) the borrower receives a disability-related benefit and because of the disability is permanently unfit for work;
    (c) in the case of post-2006 student loans, the 25th anniversary of the date on which the borrower became liable to repay the student loan;
    (d) in the case of student loans which are not post-2006 student loans and not post-2012 student loans, the borrower reaches the age of 65; or
    (e) in the case of post-2012 student loans, the 30th anniversary of the date on which the borrower became liable to repay the student loan.

    [(e) was added through regulation 7 of the Education (Student Loans) (Repayment) (Amendment) (No. 2) Regulations 2012.]

    See http://www.slc.co.uk/services/loan-repayment/loan-cancellation.aspx for how to get the loan cancelled:

    Borrower is disabled

    If a borrower can prove they're permanently unfit for work due to a disability, then their loan could be written off.

    Two items of evidence will need to be submitted:
    • A letter from a medical professional stating that the borrower is permanently unfit for work, dated within the last 6 months; and
    • Evidence of disability related benefits.

    This documentation along with the Customer Reference Number should be sent to:

    Customer Care Team,
    Student Loans Company,
    100 Bothwell Street,
    Glasgow.
    G2 7JD.
  • MSE_Martin
    MSE_Martin Posts: 8,272
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    Money Saving Expert
    edited 18 July 2016 at 6:13PM
    I did mention that, but thankfully, there is a chance she may work again, though unlikely at a salary over 21000
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • My son is in the fortunate position of earning close to £40,000 pa, and readily accepts the need to pay the big monthly contribution. Martin's excellent advice doesn't cover people like him, nor people who may get promoted to that level or more, rather than just have inflation-linked pay rises. Is there a way of calculating at what approximate stage it really is best to pay off some or all of the outstanding debt? Of course, retaining investments versus paying down debts/loans is a difficult balance to judge. but given that many investments are earning paltry returns at present, there may be a case for reducing the student debt by higher earners.
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