Help With Student Loans - HERE!

Prop10175

Hi,
My daughter has arranged loans for tuition fees and maintenance but my parents have now offered to pay her tuition fees. I assume we could cancel the fees part and pay direct but will that effect the maintenance loan? Is it even worth paying the fees, would there be any tax implications or other considerations?
Any advice would be much appreciated.
Will

RachelP54

I had a loan back in 2015 but then left university 2 months into the course on mental health grounds. I thought I was told at the time that my loan overpayment would just be added to my total student loan and I would pay it back when I'm earning. I don't have any evidence of this and to be honest I was not in the right mental state to take any of the information in. I am now studying again so have another student loan.

I have recently been contacted by Student Loans company saying that I owe them £746 and I have to start repaying it now. They said I should have been given 60 days leeway and then been asked to repay it at the start of 2016. I was never contacted about this at the time and I have been forced to start paying it back £5 a month (thankfully).

I just wanted to check that they can actually do that almost 4 years after I left the course and where I'm still living on a student loan now. Thanks in advance for your help.

Rachel

[Deleted User]

RachelP54 wrote: »

I had a loan back in 2015 but then left university 2 months into the course on mental health grounds. I thought I was told at the time that my loan overpayment would just be added to my total student loan and I would pay it back when I'm earning. I don't have any evidence of this and to be honest I was not in the right mental state to take any of the information in. I am now studying again so have another student loan.

I have recently been contacted by Student Loans company saying that I owe them £746 and I have to start repaying it now. They said I should have been given 60 days leeway and then been asked to repay it at the start of 2016. I was never contacted about this at the time and I have been forced to start paying it back £5 a month (thankfully).

I just wanted to check that they can actually do that almost 4 years after I left the course and where I'm still living on a student loan now. Thanks in advance for your help.

Rachel

Yes they can, they could've done it at the time but maybe they didn't have an address for you. Or perhaps they did and you binned the letter because you were ill.

When I dropped out for the same reason I had to repay just over £1000 immediately, I wasn't entitled to the money as I was no longer a student. Same for you.

silvercar

RachelP54 wrote: »

I had a loan back in 2015 but then left university 2 months into the course on mental health grounds. I thought I was told at the time that my loan overpayment would just be added to my total student loan and I would pay it back when I'm earning. I don't have any evidence of this and to be honest I was not in the right mental state to take any of the information in. I am now studying again so have another student loan.

I have recently been contacted by Student Loans company saying that I owe them £746 and I have to start repaying it now. They said I should have been given 60 days leeway and then been asked to repay it at the start of 2016. I was never contacted about this at the time and I have been forced to start paying it back £5 a month (thankfully).

I just wanted to check that they can actually do that almost 4 years after I left the course and where I'm still living on a student loan now. Thanks in advance for your help.

Rachel

Sounds like you withdrew part way through the term, so have to repay part of the loan as that term's loan was designed to fund you for the whole term.

A message should go out to everyone thinking of withdrawing, to stay registered until the end of term to avoid this situation.

Dr_John

Hello
Once again, I would be grateful for your assistance as I have a another query regarding the student loan repayment calculations which, I am finding once again, don't work in a logical (or fair) way in my view.
I wonder whether you could confirm how the £25750 threshold for repayments to start works? My daughter has spoken to the student loans help desk regarding the issue of her payments and it appears that the £25750 threshold before payments start is not calculated like an annual income tax threshold for PAYE, which surprises me
Although she will earn only £1750 over the annual threshold this financial year as she was not working for the first 2 months of the financial year (April & May) she is being charged student loan based on her full annual salary as if she will earn the whole amount for the year. She has been told this is because she must repay 9% of any amount over the £2143 monthly limit and because she will earn over the annual threshold (even though it is not by much) this financial year that this is correct and she will receive no refund. Is this being calculated correctly?
I calculate that if she paid student loan on her salary minus the annual allowance she would pay around £160, whereas paying it the way they are calculating on a monthly basis she will pay £540.
She was told that they only apply the full annual threshold for those who are self employed and submit a self assessment tax form. This is surprising as it appears being self employed and calculating repayments differently is an advantage in this situation.
I've been trying to get to the bottom of this, and I fear it is correct, which seems very wrong to me. Please can you confirm if the information she has been given is correct?
Many thanks in advance

silvercar

She has been told this is because she must repay 9% of any amount over the £2143 monthly limit and because she will earn over the annual threshold (even though it is not by much) this financial year that this is correct and she will receive no refund. Is this being calculated correctly?

That's correct.

As you say, if she was under the annual threshold she could apply for a refund. Once you are over it there are no refunds. Earn a lot in one month and you pay.

Starrystarrynight1

The annual tax free allowance isn't part of the student loans repayment calculations, if that's what you are asking, it's the gross amount that is used.

Dr_John

Thanks both.
Was just likening the income tax threshold to the student loan payment threshold and hoping the mechanism for payments worked in the same way. It seems not.
I've seen it explained many times that "You repay 9% of everything earned above £25725 " including on the Student loans mythbusting section on the Moneysaving expert website. That simply isn't a correct statement. In this instance my daughter will pay over 30% of the amount over that threshold !
I might encourage her to do some self employed work too then do a self assessment form and see if that works.
Thanks again

silvercar

Prop10175 wrote: »

Hi,
My daughter has arranged loans for tuition fees and maintenance but my parents have now offered to pay her tuition fees. I assume we could cancel the fees part and pay direct but will that effect the maintenance loan? Is it even worth paying the fees, would there be any tax implications or other considerations?
Any advice would be much appreciated.
Will

The downside of this is that your daughter will end up with a student loan of less than 20k, but if she never pays it back in full (due to her earnings) eventually it will be written off. If that is the case, it won't make a penny difference to her if the loan was 20k or 50k as it will all get written off. So unless she is going to be relatively high earning, your parents will have paid 30k into the government pot for nothing, far better for them to gift her 30k for a house deposit!

rockontommy

Can anyone advise on the legalities of HMRC collecting repayments monthly through PAYE but not forwarding them to SLC until tax year end (accruing extra interest during that time)?