Repaying Student Loans 2009/10 guide discussion

Poolie

DesertFlyer wrote: »

Sorry to bump this.. I have a similar issue and having gone through the forum I'm not sure I can see the answer.

Details:

• I started university in 2001 for 3 years so I think I finished with about £12k or so Student Loan
• My loan was deducted on my payslip at my first two jobs as expected and I got sent a statement each year from The Student Loan Company
• I started a new job in Oct 2007 and since then have had no decutions
• I do not believe I informed my company I had a student loan nor did I inform SLC, however nor had I informed either of my previous two firms
• There has been no contact from the SLC over the past 2 years - I'm not being chased although I probably have a balance of c. £8/9k

My question is what to do?

• I could not inform them and save the £9k or so in a bank account by Aug/Sep 2010 and inform them after this point in which case I have the loan covered anyway
• I could inform them now and start paying approx £210 a month (based upon a UK PAYE calculator) and risk being fined, more aggressively pursued, or an increased repayment schedule

My gut instinct is to risk it for the 9 months, on the basis that they haven't contacted me in 2 years, and save the money in case they do contact me and hopefully have enough in case they demand immediate full repayment (would that happen?), or at least be able to afford an aggresive/increased repayment schedule.

If the interest wasn't 0% then I would repay. I'm completely debt free currently so it would be in my interest to repay if rate is higher than savings.

Any thoughts or recommendations are greatly appreciated in advance!

Oh, and a Merry Christmas and Happy New Year to all!

Did you complete a P46? Did you tell them you had a loan? Did you hand in a P45?

It could be an issue at the tax office, if so they repayments will come out of your salary at £210 per month. You will not be expected to make the missed repayments but be warned that the interest will be charged on the full balance.

Poolie

peterdee wrote: »

I was considering trying to pay mine off more quickly than the standard deducted amount each month, simply to be a debt free quicker, but I think now that the interest rate on the loans is 0%, its better to have the loan as long as possible, as its effectively much cheaper than any other borrowing rate and could therefore save money when taking on more expensive debt (e.g. a mortgage).

You can make standing order repayments to your loan any time. While it is 0% you would be better getitng a savings account.

DesertFlyer

Poolie wrote: »

Did you complete a P46? Did you tell them you had a loan? Did you hand in a P45?

It could be an issue at the tax office, if so they repayments will come out of your salary at £210 per month. You will not be expected to make the missed repayments but be warned that the interest will be charged on the full balance.

I believe I provided them with my P46 but cannot be certain now. I did not explicitly tell the firm I had a student loan. This has however made me think this is where the problem might have occurred.

In May/June 2007 I finished my old job where I was having Student Loan deducted. Between then and October I didn't really work although I did some temping to stop me getting bored. This would have been less than the £15k pa/£1,250 pcm bracket so there would have been no deductions.

When I started in Oct 2007 I would have provided my P46 from this temp job.

It would not surprise me if it was a problem at the Tax office. last year they ignored my tax free allowance and took 9 months to repay it!

Are you recommending I just wait and see - especially if I am not expected to make the missed repayments? As I said, there have been no deductions over the past 2 years despite earning over the £15k throughout so I'm not really expecting them to suddenly pick up on this (although maybe at end of Tax year).

Many thanks!

Poolie

P46 - HMRC should still have matched your tax records for student loans to continue so it may be n issue at their end.

The tempting will have really screwed up your tax record and I am sure HMRC will be in touch checking who you worked for over the period for Tax and NI purposes.

You would have provided your P45 from your temping job otherwise they would have asked you to complete a P46. The P45 may not have had the box ticked telling your employer to continue taking payment.

The problem with your tax free allowance will also be related to the tax office issue with your student loand.

HMRC can pick up on you not making deductions at any time so it would be worth your while to contact SLC and advise them that your not having repayments due to changing jobs a lot in 2007. They will pass the details onto HMRC who is try and sort out your tax records.

I believe that since you have had the money from SLC and are in a position to repay you should make the repayment either through your salary or voluntary. I have a student loan and I am more than happy to pay back the money since I have a good job, great prospects for the future and I would not have had this help without my student loan. Plus I want to get rid of this debt from round my neck.

DesertFlyer

Sorry I meant P45 from the temp job (got the forms mixed up), but as I say I really can't remember what I provided to HR back then.

You make a fair point that if you have a good job and good prospects you should look to repay and like you I would rather not have a debt round my neck, however I work in what has been a fairly volatile industry the last couple of years and would like to get myself into the best financial position I can in case anything goes wrong and I follow the rest of my colleagues out the door!

I am not trying to avoid it indefinitely but another 9 months or so would make the world of difference. If things improve then I may reconsider in the new year.

Poolie

If you do leave the company then your repayments would stop automatically since you would be outside PAYE unless your SA as well.

SLC could request all the money you have not paid but this is unlikely.

Turnbull2000

How easy is it to find out how much you still owe?

I graduated in 2001 owing around £7000, and my last statement in 2006 showed an outstanding loan of £4500. I was complacent enough not to inform SLC of a change of address back then, so I haven't a clue how much is left.

I'm currently earning £35000 and still seeing quite hefty loan deductions on my pay slip, so would have thought I'd be quite close to paying it off by now!

Masomnia

Turnbull2000 wrote: »

How easy is it to find out how much you still owe?

I graduated in 2001 owing around £7000, and my last statement in 2006 showed an outstanding loan of £4500. I was complacent enough not to inform SLC of a change of address back then, so I haven't a clue how much is left.

I'm currently earning £35000 and still seeing quite hefty loan deductions on my pay slip, so would have thought I'd be quite close to paying it off by now!

Try here http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansCoursesStartingFrom1998/DG_10034867

Log in on the right to view your balance and the like.

wilson_p

Due to various reasons i'm moving to Germany early next year to live and work. I am rather unclear as to how much and by what means I will make any loan repayments.
After graduating in 2004 and working and working for 3 years I have not worked in the UK for over two years now. Having spent 18 months travelling and volunteering and I have since struggled to find work upon returning earlier this year.
Naively I didn't inform the SLC I was leaving the country and accept the charges imposed on me for this oversight. However I am keen to avoid any further penalties and am looking for a little advice.
I am a little worried about how to approach the situation as I will be serving a carpentry apprenticeship and earning well under the £15,000 threshold and it may be a couple of years before I reach that level of earnings. I will also be working for a family friend and any money I do earn will be paid in cash and therefore will have no documentation to support my situation.
I don’t really want to avoid contacting them and informing them of my situation however I have read that I could be liable to pay a default payment of £246.00 per month or even possibly be required to pay off the full amount of my loan currently around £14,000.00. Both of these alternatives are not workable for me at present.
Can anyone give me any advice about how to approach this situation particularly anyone who has lived and worked abroad?

Oldernotwiser

As long as you're earning under £15,000, you don't need to make any repayments anyway so why not just notify the SLC where you'll be living by the normal route; the amount you owe has no relevance. see the required forms on here

http://www.slc.co.uk/thresholds/index.html