Student Loan repayment holiday to prevent mortgage arrears

Bigsqueeze

Hi

This is my first post, so hopefully its in the right place. I have read some limited information on student loan repayment holidays, and it seems there is an option, but that this is available for current students only, I am not sure of any of the terms or eligibility criteria.

My question is to anyone that has been able to negotiate any payment holiday or better, with the SLC regarding their student loan. Mine was taken 1999-2003/4 and the balance is about 15k. I earn quite well working in the city, hence I am making big payments on the student loan each month. However, and I dont mean to sound defeatist, it seems I am getting squeezed from all directions and that there is very little help in terms of benefits, tax etc for me and my family in our situation.

Myself and my partner have a mortgage with RBS, which we managed to fix as it was spiralling on a 7.5% SVR, and can scrape the interest only payment at the moment. We originally had a 100% mortgage, have managed to remortgage to 95% after our first 2 year term but of course the negative equity is getting worse daily in the current climate.

We have a 2 year old in nursery 3 days a week (manage with family the rest) as we bth work full time. I take the maximum childcare vouchers that I can, and hope that my partner can enrol in this as well with his job. Childcare is about 533 per month.

It seems the tax credits system will offer us very little, I am in process of applying as we are both so stressed and exhausted its something i must do, even if its only 80 a month it will help. Our gross household income is about 56k But things arent great at home mainly due to money issues, and when I have looked as a single mum, it seems that there is no help available in terms of paying the mortgage/benefits. There is the single occupancy council tax reduction, but I would have to try to get a lodger (not easy when they'd need to share a 2 year old, I have tried) but it seems that if you earn over 35k its assumed you can cope with all the bills, when this isnt the case, especially people that have been sold mortgages in the last few years and house prices have crashed. If my mortgage was 400, maybe, but its 940 and thats just the interest.

So, we are a young family, we want to stay in our house indefinitely which is the positive thing as we just have to keep up those payments, but I am frustrated that I cant seem to take advantage of many benefits as I am not claiming jobseekers and the sell and rent back scheme isnt available if you have negative equity, MPPI you have to be claiming, it almost seems to be wrong that we work so hard and that I have a good job.

I am struggling to keep up with everything and because I have a loan and credit card debt (no defaults) (debt payments 250 a month) my credit rating has been downgraded according to credit expert (they are now taking into account balance changes, my current account swings badly but i stay within my overdraft) So i cant even credit card tart on 0% deals etc as cant get one.

So, after all that, if you are still reading, I was wondering about the student loan, if there is anyway that I can take a break from it?

Thanks for any advice

Marcheline

Hi Bigsqueeze, hope your situation gets better soon as it sounds a bit of a pickle at the mo. First thing I would do is ring the Student Loans Company http://www.slc.co.uk/contact%20us/customer_enquiries.html If you follow this link there's a number for people to ring if they are in difficulty repaying (i.e. if they miss a payment) Although you're not in this situation yet, maybe you should ring them and ask if there's anything they can do for you? Good luck.

ILW

From what you say it appears your take home pay is around 3400 per month.
Mortgage 900 leaves 2500 for the rest.
What are you doing with it?

Bigsqueeze

Hi ILW

Take home pay is averaged at 3285, based on salaries, child benefit and estimates on the commission components of mine and my partners jobs.

the rest, well here is a breakdown as I am tracking it quite closely using microsoft money:

RBS Mortgage - interest only -£938.00 Monthly Mortgage/Rent Groceries, nappies, food and fuel -£500.00 Monthly Groceries Tesco home insurance -£400.00 Yearly Insurance Nursery fees (after childcare voucher of 243 per month) -£372.00 Monthly Nursery fees Monthly train ticket -£362.90 Monthly Travel/Vacation DVLA - car tax -£182.00 Yearly Automobile Tesco loan - about 6 yrs left on this, rate 6% -£176.70 Monthly Loan AA Membership -£115.00 Yearly Automobile Council tax -£115.00 Monthly Council tax E.ON gas and electricity (fixed til 09) -£90.00 Monthly Utilities MOT estimate -£80.00 Yearly Automobile Partner mobile phone -£65.00 Monthly Phone/Wireless Virgin credit card -£63.27 Monthly Transfer to: Virgin Credit Card My mobile phone -£58.00 Monthly Phone/Wireless Legal and General life insurance (partner) -£40.15 Monthly Insurance Diamond car insurance -£35.08 Monthly Automobile Dentist emergency plan -£35.00 Yearly Healthcare Legal and General life insurance (me) -£33.33 Monthly Insurance Mobile phone insurance -£27.95 Every three months Insurance Water supply -£27.45 Monthly Utilities Zen broadband (expensive but need to work from home) -£24.46 Monthly Phone/Wireless Waste water -£16.15 Monthly Utilities Train station car park -£14.00 Weekly Travel/Vacation BT line rental -£13.00 Monthly Phone/Wireless Tesco credit card min pymt -£12.00 Monthly Credit Card Payments/Transfers TV License -£11.95 Monthly Household Currys TV insurance -£5.99 Monthly Insurance Bank account fee (worth it for my interest free overdraft) -£5.00 Monthly Fees
Some are averaged, and in my detailed calculations based on average monthly amounts where payment is weekly or yearly etc leaves me with 180 a month for unforeseens. Some things vary, like the number of nursery days a month and commission from our jobs but this is a reasonably conservative estimate. The unforseens have been crippling us, like fixing up the car etc. We are currently borrowing my mums old car as my station runner, as one drops off and I pick up at nursery so we have baby/laptop/buggy etc. So we arent seeing the true cost of running two cars, just one and fuel on two. I am hoping work may be able to help maybe with a lease car or the train fare, or even just the broadband as I do a lot of work from home.

But basically I have tried to be realistic and account for everything that we are paying as far as I can, and some things may have to be cut but I should sort the tax credits as that would be something. Unfortunately my partner is extremely bad with financial consequences and responsibilities (he kept this well hidden!) and there has been tough times because of silly mistakes, all I can do is try to ringfence what is happening in the current situation, saving where I can.

CLAPTON

I would suggest you go over to the debt free wannabe board and post up a SOA..
format
http://www.makesenseofcards.com/soacalc.html
the information you gave above is a little hard to read

morg_monster

Hi I have reformatted this to make it easier to read

RBS Mortgage - interest only -£938.00 Monthly Mortgage/Rent
Groceries, nappies, food and fuel -£500.00 Monthly Groceries
Tesco home insurance -£400.00 Yearly Insurance
Nursery fees (after childcare voucher of 243 per month) -£372.00 Monthly Nursery fees
Monthly train ticket -£362.90 Monthly Travel/Vacation
DVLA - car tax -£182.00 Yearly Automobile
Tesco loan - about 6 yrs left on this, rate 6% -£176.70 Monthly Loan
AA Membership -£115.00 Yearly Automobile
Council tax -£115.00 Monthly Council tax
E.ON gas and electricity (fixed til 09) -£90.00 Monthly Utilities
MOT estimate -£80.00 Yearly Automobile
Partner mobile phone -£65.00 Monthly Phone/Wireless
Virgin credit card -£63.27 Monthly Transfer to: Virgin Credit Card
My mobile phone -£58.00 Monthly Phone/Wireless
Legal and General life insurance (partner) -£40.15 Monthly Insurance
Diamond car insurance -£35.08 Monthly Automobile
Dentist emergency plan -£35.00 Yearly Healthcare
Legal and General life insurance (me) -£33.33 Monthly Insurance
Mobile phone insurance -£27.95 Every three months Insurance
Water supply -£27.45 Monthly Utilities
Zen broadband (expensive but need to work from home) -£24.46 Monthly Phone/Wireless
Waste water -£16.15 Monthly Utilities
Train station car park -£14.00 Weekly Travel/Vacation
BT line rental -£13.00 Monthly Phone/Wireless
Tesco credit card min pymt -£12.00 Monthly Credit Card Payments/Transfers
TV License -£11.95 Monthly Household
Currys TV insurance -£5.99 Monthly Insurance
Bank account fee (worth it for my interest free overdraft) -£5.00 Monthly Fees

I think you need to look much further than just sorting the student loan issue. It isn't gonig to help you for long and I doubt its even possible to take a holiday. you need to cut your spending and pay off the loans and credit cards. I would go over to the debt free wannabee board for more specific advice - but i will warn you they will be very harsh on you!

things that pop out at me - HUGE mobile bills! between you and including insurance about £130 a month! SURELY you can get that down? is that just personal calls?!
Groceries £500 seems high to me but then I have no idea how much nappies are. Me and my OH spend about £200-250 a month, and we don't really skimp or think about how much we are spending, £500 seems like you've got some room to maneuvre.
monthly train ticket - guess we can't get round that but didn't you say you worked at home, is that just for your OH?
Also didn't notice anything for - haircuts, christmas & birthday spending, clothes etc etc.

sorry if I sound a bit harsh I don't mean to be. I know somehow life just accumulates all this stuff to be paid every month, sometimes you have to sit and do an audit like you are doing. Good luck.

morg_monster

Hi sorry me again. Bored at work so worked out monthly equivalents for all your bills. It comes to 3115. So considering you are missing some things out (as I said above, plus car servicing, holidays, general fuel and travelling around outside from work), you definitely need to cut back or you are going to get into a debt spiral.

omelette451

morg_monster wrote: »

Groceries £500 seems high to me but then I have no idea how much nappies are.

Nappies are groceries?

Anyway, my advice is to look into alternative nappy schemes. Re-usable ones are trendy nowadays and cost hardly anything, or if you don't want to 'process' them at home there are companies in certain towns that will collect them and do it for them. As this is much more environmentally friendly too I believe some councils even offer grants to people using them.

Oldernotwiser

Bigsqueeze wrote: »

So, after all that, if you are still reading, I was wondering about the student loan, if there is anyway that I can take a break from it?

The simple answer is no; if you're earning over the repayment threshold you have to pay it. Don't forget, Student Loans aren't even wiped out by bankruptcy.

omelette451

Groceries, nappies, food and fuel -£500.00 Monthly Groceries
See above
Tesco home insurance -£400.00 Yearly Insurance
Is this the best deal?
Nursery fees (after childcare voucher of 243 per month) -£372.00 Monthly Nursery fees
Monthly train ticket -£362.90 Monthly Travel/Vacation
Can you afford an annual one? It's usually 12 months for about the price of 10.
DVLA - car tax -£182.00 Yearly Automobile
Get a lower-emission car?
Tesco loan - about 6 yrs left on this, rate 6% -£176.70 Monthly Loan
AA Membership -£115.00 Yearly Automobile
Council tax -£115.00 Monthly Council tax
E.ON gas and electricity (fixed til 09) -£90.00 Monthly Utilities
MOT estimate -£80.00 Yearly Automobile
Partner mobile phone -£65.00 Monthly Phone/Wireless
That's a huge amount!
My mobile phone -£58.00 Monthly Phone/Wireless
Ditto.
Legal and General life insurance (partner) -£40.15 Monthly Insurance
Diamond car insurance -£35.08 Monthly Automobile
Dentist emergency plan -£35.00 Yearly Healthcare
Is this necessary? Have you at least tried to get an NHS dentist?
Legal and General life insurance (me) -£33.33 Monthly Insurance
Mobile phone insurance -£27.95 Every three months
Unneccessary unless you're super-careless.
Insurance
Water supply -£27.45 Monthly Utilities
Zen broadband (expensive but need to work from home) -£24.46 Monthly Phone/Wireless
Is there a cheaper option, e.g Virgin?
Waste water -£16.15 Monthly Utilities
Train station car park -£14.00 Weekly Travel/Vacation
Do you really need to drive to the station?
BT line rental -£13.00 Monthly Phone/Wireless
Tesco credit card min pymt -£12.00 Monthly Credit Card
Can this go on your virgin card too?
Payments/Transfers
TV License -£11.95 Monthly Household
Currys TV insurance -£5.99 Monthly Insurance
Is this necessary?
Bank account fee (worth it for my interest free overdraft) -£5.00 Monthly Fees

Please don't think I'm being mean. There's no reason you have to take up everything I've suggested but, as others have pointed out, often you have to look objectively from outside at where you can save. As for the original question, I don't think it's possible to take a student loan holiday, and even if you can I really don't think it'll help you much.