Old student loan rears ugly head

Futura_Bold

Had posted something similar in another forum, but just noticed this one and seemed more appropriate...

Had a letter from Credit Solutions this morning saying their client (student loans company) has referred the debt for immediate action and should I fail to pay they will send 'field agents' to call upon me.

I haven't heard from the student loans company for about 5 yrs, granted I hadn't been in touch with them either.

My loan was from 97. The letter says the 'arrears' are £2804 and the total balance due is £3775. I'm guesssing the total doesn't include the arrears?? If not, what are the arrears for??? Seems massive.

This letter couldn't have come at a worse time as been made redundant.

Would be very grateful if anyone could offer some advice as what I should do as can't pay in in current situation...?

Oldernotwiser

Futura_Bold wrote: »

Had posted something similar in another forum, but just noticed this one and seemed more appropriate...

Had a letter from Credit Solutions this morning saying their client (student loans company) has referred the debt for immediate action and should I fail to pay they will send 'field agents' to call upon me.

I haven't heard from the student loans company for about 5 yrs, granted I hadn't been in touch with them either.

My loan was from 97. The letter says the 'arrears' are £2804 and the total balance due is £3775. I'm guesssing the total doesn't include the arrears?? If not, what are the arrears for??? Seems massive.

This letter couldn't have come at a worse time as been made redundant.

Would be very grateful if anyone could offer some advice as what I should do as can't pay in in current situation...?

As you're on the old style "mortgage" type loans you should have been completing deferment forms every year if you were ineligible to pay; because you haven't you will have run up large amounts of money on arrears and charges. As I've just been telling someone on another thread, charges and arrears are really punitive on Student Loans and the repayment of these is completely separate from ordinary SL payments. You need to contact them with suggestions for a repayment plan that you can afford and hope they don't take you to court.

Futura_Bold

Thanks. Do you suggest contacting the SLC or the debt collectors? Or both?

Also, regarding student loans arrears, I don't suppose you know of them being contested with any success?

Oldernotwiser

I'd start off with the SLC but don't be surprised if someone starts talking about Honours Student Loans as a batch of loans were sold to this organisation some years ago(mine was). I think that there was a thread on here some time ago about fighting charges so it might be worth searching, although I don't know what the outcome was.

When I forgot to send back my deferrment form for 5 months I ended up paying several hundreds in arrears and charges - mind you, I hadn't heard of MSE then so didn't fight it!

skylight

No - the total is £3775, but of that you should have paid (an in arrears now of) £2804.

EG - the debt is £1000 and you agree to pay £50 a month. If you dont pay for the first 3 months, then the debt is still £1000 but your arrears are now £150. This is basic - arrears can also include charges/interest etc which in turn bump up the total owed.

anniecave

Have you been earning less than the deferrment threshhold for the last few years, or more than?
I've just checked and the threshold is now 25,936 per year (before tax). In 2003 it was 21024 according to the letter I had.
If you have been consistently earning less than the deferment threshhold and you can prove it with payslips etc then you shouldn't have to pay it back at the moment anyway, and you should be able to get the loan back to the "deferred" state but the charges may stay as you should have contacted them.

Also if you have just lost your job and aren't working at the moment again your loan should be deferred at the moment until your income increases.

Oldernotwiser

anniecave wrote: »

Have you been earning less than the deferrment threshhold for the last few years, or more than?
I've just checked and the threshold is now 25,936 per year (before tax). In 2003 it was 21024 according to the letter I had.
If you have been consistently earning less than the deferment threshhold and you can prove it with payslips etc then you shouldn't have to pay it back at the moment anyway, and you should be able to get the loan back to the "deferred" state but the charges may stay as you should have contacted them.

Although you should be able to regain the deferred status, you'll find that you owe all the payments for when you weren't deferred, regardless of your income at the time. If you haven't applied for and been given a deferrment then the payments become owing, I'm afraid - that's certainly what happened to me.

Futura_Bold

Thanks for the replies. I've been earning no more than 22k for the last few years. Also I've moved around a bit and had a year living abroad which is when contact with SLC stopped. In hindsight I probably should've kept up with deferring but didn't....
Anyway I got made redundant 2 weeks ago and now this letter from the debt collectors out of the blue. I think after reading all your advice I'll call the SLC and explain my situation and hope they get the debt collectors off my back and defer the loan.