Repaying Student Loans 2009/10 guide discussion

xpcomputers

I've got a pre-1998 set of loans and am living and working overseas. I've mostly been in deferment since them so still several thousand outstanding and it was looking like I was heading towards them being cancelled with no more repayments due (in 5 years, due to the 25 year rule). However my deferment has temporarily ceased due to Brexit tanking the exchange rate even though neither my cost of living, nor my salary over here have changed (and I was previously well under the threshold). This has made it very tough this last year as I have very little disposable income and Erudio demanding 93GBP per month. I've had to borrow money most months from family to make those payments. Now out of the blue, they've hiked the repayments up to 148GBP per month which is impossible for me. Is this allowed? They said they did it otherwise I wouldn't repay before the loans were wiped in 5 years! Surely that isn't allowed? It seems to be completely arbitrary! My only hope is that the exchange shifts enough to be eligible for deferment again. The exchange rate is touch and go right now so I have applied, but waiting to see what the exchange is on the day they process it. Should I challenge the increase to 148GBP though as well? Surely if there is balance outstanding at the end of 5years, that is the point of the cancellation system.... not they they can just keep hiking up the repayment amount to compensate? I already couldn't afford the 93GBP.... What if I successfully defer for another 4 years, would they bump it to 350GBP a month in the final year to claw it all back before it was cancelled?

2013yearofthehouse

Was just reading posts #862 to #867 and wondering something (as I’m in either the same or a similar situation......poster doesn’t mention/confirm fee systems/amounts so I’m not sure).....does it matter which of the payment type “systems” you were on for the second (post-2006) course, as to when it gets wiped? I started a second course (4 years) post-2006, but instead of paying the £3000+ fees on the “new” system, that the other students in my year paid (as it was their first time starting a course), I paid the £1200/1300ish fees from the “old” system, that I had paid during the first (2005) course that I started (but didn’t finish). Well, I actually didn’t pay any fees at all, as they were means tested and grant covered for all years, meaning all I actually have to pay back is the living costs (maintenance) loans for both 2005 and post-2006 courses (but they still follow the pre-2006 system in terms of amounts).

Does that mean part of the loan is payable until I’m 65 and the other part payable until 25 years after my (2nd course) graduation? Or will the full amount of both likely be payable until I’m 65?

I understand that had they treated me like everyone else starting the course, I would have had £3000+ fees and different grant and loan amounts as the system changed.......and therefore that would be separate and a more straightforward situation, making that part only payable for the 25 years.....but since that didn’t happen, I’m not sure? It sort of seems like they treated all my years as one long course (when it was actually different courses at different universities), so might the repayment be treated as such and all be payable until I’m 65?

Ed-1

2013yearofthehouse wrote: »

Was just reading posts #862 to #867 and wondering something (as I’m in either the same or a similar situation......poster doesn’t mention/confirm fee systems/amounts so I’m not sure).....does it matter which of the payment type “systems” you were on for the second (post-2006) course, as to when it gets wiped? I started a second course (4 years) post-2006, but instead of paying the £3000+ fees on the “new” system, that the other students in my year paid (as it was their first time starting a course), I paid the £1200/1300ish fees from the “old” system, that I had paid during the first (2005) course that I started (but didn’t finish). Well, I actually didn’t pay any fees at all, as they were means tested and grant covered for all years, meaning all I actually have to pay back is the living costs (maintenance) loans for both 2005 and post-2006 courses (but they still follow the pre-2006 system in terms of amounts).

Does that mean part of the loan is payable until I’m 65 and the other part payable until 25 years after my (2nd course) graduation? Or will the full amount of both likely be payable until I’m 65?

I understand that had they treated me like everyone else starting the course, I would have had £3000+ fees and different grant and loan amounts as the system changed.......and therefore that would be separate and a more straightforward situation, making that part only payable for the 25 years.....but since that didn’t happen, I’m not sure? It sort of seems like they treated all my years as one long course (when it was actually different courses at different universities), so might the repayment be treated as such and all be payable until I’m 65?

The second course wasn't a post-2006 course to be a post-2006 student loan, you had to have taken out a student loan for the first time in 2006/07 or later OR not had your status as a student eligible for support transferred from another course which the borrower began before 1 September 2006 (i.e. been eligible to pay top-up fees of up to £3k).

This is set out in the repayment regulations:

http://www.legislation.gov.uk/uksi/2009/470/regulation/19/made

So in summary, all your pre-2012 (plan 1) loans will be written off at age 65.

Examples here:

https://www.whatdotheyknow.com/request/228402/response/560485/attach/2/copley%20clarification%20on%20cancellation.docx?cookie_passthrough=1

2013yearofthehouse

Ed-1 wrote: »

The second course wasn't a post-2006 course to be a post-2006 student loan, you had to have taken out a student loan for the first time in 2006/07 or later OR not had your status as a student eligible for support transferred from another course which the borrower began before 1 September 2006 (i.e. been eligible to pay top-up fees of up to £3k).

This is set out in the repayment regulations:

http://www.legislation.gov.uk/uksi/2009/470/regulation/19/made

So in summary, all your pre-2012 (plan 1) loans will be written off at age 65.

Examples here:

https://www.whatdotheyknow.com/request/228402/response/560485/attach/2/copley%20clarification%20on%20cancellation.docx?cookie_passthrough=1

Great, thanks

Re-reading TigerLily’s posts, they don’t actually say whether they paid £1200/1300ish or £3000ish for their second course, so they could be in the same situation as me or they could be in the part 65 / part 25 year situation.

Lise-Loo

Hello. I’m currently repaying a plan 1 student loan (pre 2012). I earn approx. £21000 a year and claim mileage to cover distances travelled whilst working (not to and from home). These vary in amount but are usually around £150 a month. I’m currently making student loan repayments based on my salary + mileage, is this correct?? I wouldn’t say that mileage is and earning, as it’s out of pocket expenses?! Any help would be appreciated - neither SLC or employer gave me a solid answer.

Ed-1

Lise-Loo wrote: »

Hello. I’m currently repaying a plan 1 student loan (pre 2012). I earn approx. £21000 a year and claim mileage to cover distances travelled whilst working (not to and from home). These vary in amount but are usually around £150 a month. I’m currently making student loan repayments based on my salary + mileage, is this correct?? I wouldn’t say that mileage is and earning, as it’s out of pocket expenses?! Any help would be appreciated - neither SLC or employer gave me a solid answer.

Is it subject to national insurance? Student loan repayments are levied on NICable income.

sheramber

https://www.gov.uk/expenses-and-benefits-business-travel-mileage

wallofbeans

Hello All,

I have a pre-98 loan that I have been deferring and wanted to do the same this year but never received the deferment application form. I didn't notice this until getting a text from Thesis Servicing telling me to hurry and return the form if I was going to defer... So I then emailed them asking where it was, I didn't get a reply to that email so called and they told me that the form was sent in February (I never got it) and they'd get another form sent out... it's now two weeks later and I'm still waiting for the form...

Can I download the form somewhere? It might be quicker than waiting for it to arrive in the post...

Cortiz

I posted this in a separate thread but didn't get any replies, so thought I'd try here....

Slightly unusual situation here.... I live abroad in the US, permanently most likely. I studied as a mature student and am now 51 years old. Due to postgrad study and various life circumstances, my income has been consistently below the threshold, so I have made zero repayments and owe around £17,000. I still have UK bank accounts, including savings making 1.5% interest.

Here are the reasons I'm thinking of repaying the loan in full, in one lump sum:

1. With the SLC interest rate increase to 1.75%, my student loan is no longer useful as a loan for investment purposes. Since my savings account only makes 1.5%, I'm effectively "losing" .25%. In fact, I actually have the full loan amount in a savings account making only 0.50% (because my main savings account has the maximum insured £85k from my UK house sale). So in a sense, that £17k in the other account is "losing" 1.25%. Living abroad, I am not eligible to open any new UK savings accounts that might have better rates..

2. Because of the low GBP/USD exchange rate, it doesn't seem to make sense to exchange the money to my local currency - especially since savings rates are about the same here.

3. Though still uncertain, it's very possible that I'll start making over the income threshold beginning this year or next - possibly a great deal more - at which point I'll have to start repayments anyway (possibly quite high ones).

4. Given the rules of the 1998-2005 system, my loan will not be written off for another 14 years, if I understand correctly. Since I don't expect to have such a low income for all that time, that is probably not much of a possibility.

5. I'm debt free.

So am I missing anything? Any compelling reason not to pay it off and just be done with it? Thanks in advance for any comments and perspectives...

Brian_Cox

Lokolo wrote: »

Its done the same as PAYE tax. If you were paid yearly you would only pay back with £15k+, but as you are paid monthly its worked out on PAYE (just like tax normally is!).

This is STILL an issue no one talks about. And the post above is wrong.
The stated repayment threshold for student loans is completely misleading. If you are a contract worker or self employed and your income goes up and down during the year you can earn in total way below the threshold but still make substantial payments because the yearly total is averaged per month across the year. If, as many young people do, they earn above the threshold for one month then then very little for the rest of the year they will still trigger the repayment of the loan. The student loan company assumes that if you earn, say, £2,500 for one month and then £1000 a month or less for the rest of the year you will still make full loan repayments for the year as if you earned £2000+ every month.
Given that lots of young people have precarious and intermittent income after university this really should be shouted from the roof-tops.
Martin - please make this clear in you public statements about the student loan as it makes a huge difference for some people.
Brian