Student Loan Repayments Overseas

JennyLM

Hi there, I've just received a scary letter from the Student Loan Company and was hoping that somebody could reassure me that I'm not completely screwed.

I left the UK in January and since the 1st March have been employed as an English teacher in China (I was travelling and was not earning in January and February).Ｉdid not tell the SLC that I was going abroad as I saw that the earnings threshold for China was [FONT=&#23435]£[/FONT]6000 per year（which is exactly what I currently earn), and misunderstood this to mean that I did not have to inform them about the job as I would not in any case be liable for repayments.

My parents have now just emailed me a letter from the SLC asking for an update on my status. The letter states that if you are overseas you should fill in the Overseas Income Assessment before you leave the UK, which obviously I did not do. Worringly, however, it also says that if you are overseas and send them the form, the standard overseas repayment rate of [FONT=&#23435]£[/FONT]246 per month will apply between the date that you left the UK and the date they receive your form. As I have been out of the UK for five months without telling them, this will mean they'll want me to pay
[FONT=&#23435]£[/FONT]1230.

I'm currently saving for a master's degree that will start in late September, and paying them [FONT=&#23435]£[/FONT]1230 will basically mean that I won't be able to afford my master's fees. In addition, my Chinese salary is paid in cash, and I'm not sure whether I would even be able to wire this money into my UK bank account (at least not without incurring horrific fees).

What I want to clarify is:

- Would I be able to get away with ignoring the letter and simply not telling the SLC about the China trip? If I contacted them in September and confirmed that I had returned to higher education would they press me about what I'd been doing the previous year?

- If I do contact them, are they guaranteed to apply the [FONT=&#23435]£[/FONT]1230 penalty or is there some way of talking them round by explaining that I misunderstood the rules for going overseas? If they do apply the penalty, will they expect me to make immediate payment?

- Although the letter says that 'if you are already overseas, the standard overseas repayment rate will apply from the date you left the UK until a completed form is returned to us,' it also says that 'failure to notify us of going abroad within three months of leaving the UK could result in the standard overseas repayment rate of 246 per month.' These seems to contradict each other, as the latter seems to imply that there is a three month window to tell them before the standard rate is applied. Given that I was travelling for two months and did not start my job until 1st March, would it be possible for me to say that I left the UK on 1st March and send my contract of employment in support of this? If I did this:

a)Would they have any way of finding out that I actually left the UK in January?
b) Would they still demand the 1230 in fines?

Thanks in advance,

Jenny

MrsManda

The repayment rules state that you should inform the SLC if you intend to leave the country for more than 3 months. Default repayment for China is £98 per month if you do not inform them of your actual income.
I think it is best that you do fill out the forms as the penalities can be quite high and I believe defaulting on SLC payments does go towards your general credit rating. Plus if you expect any help with regards to maintance loans/grants during your Masters this will be affected if you don't keep the SLC upto date.
You didn't say when you graduated? If you graduated in July then you weren't due to begin repayments until April. 'should only be completed and returned to the Student Loans Company once your account enters repayment. Repayments commence in the April following your graduation date or the date you leave your course.'


As the overseas repayment form you shouldn't incur any charges for not informing them before leaving the country.
For more information see the repayments website

Taiko

So basically, you broke the terms of repayment and now want to weasel out of the penalty?

There are many ways to trace where you have been, and part of your loan agreement includes a section where you give them permission to check with other government agencies and various other bodies as to where you have been.

In short, you've broken the agreement. Now pay up.

whitfreak

Basically fill in the form now. But also get into contact with the SLC preferably with proof of what you've been earning, so you can back up your claim that you didnt think you had to inform them as you would be below the threashold for China. Etc etc.

It looks that you are technically screwed, its posible that they will let this go as it is a minor issue, as its not like you making a mint and avoiding repaying. MrsManda's question of when you graduated is also important as if you only entered repayment last month then the delay is even less of an issue.

But basically, be honest and hope for the best. But try and sort it quickly.

JennyLM

Mrs Manda and whitfreak, thank you for your helpful posts. Unfortunately I graduated in 2007, so my account entered repayment last April.

I am going to phone the SLC this afternoon and see what they advise - if they do charge me the full payment I am not sure how I shall actually pay it, as I currently do not have 1230 in my bank account and only have cash in Chinese yuan renminbi. Mrs Manda, if I understand you correctly, is it the case that the maximum payment for China would be 98 pounds a month rather than 249? That would make things a little less dire.

Taiko, I do appreciate that the error is mine, but it was a genuine misunderstanding of the repayment conditions rather than a deliberate attempt to avoid making student loan repayments. It's very easy to take the strict, by-the-book line that 'you made a mistake, pay up' when your plans for the next year (completing a master's that is necessary for me to move into my desired career) don't depend on avoiding penalties you unknowingly accrued, but given that mine do I don't think that it was unreasonable to ask for advice as to how I should best proceed.

MrsManda

[QUOTE=JennyLM;21867185Mrs Manda, if I understand you correctly, is it the case that the maximum payment for China would be 98 pounds a month rather than 249? That would make things a little less dire.
[/QUOTE]

If you look at the links I posted you will be able to see these details. Phoning the SLC is probably your best option.