Student loans (Scotland) - does the "six year rule" apply?

grex9101

Hi, just a quickie really,

Is there a timeframe in which the student loans company have to write off your debt?
I've not heard from them in years, maybe 4 or 5, and was wondering if they'll eventually realise and come after me in 20 years time or not.

anybody know?

lynzpower

i did read on here the 6 year rule does NOT apply to SLoans, nor are they counted as write-off debts during bankrupcy.

Whether this is true or not I dont knw, you could phone them?

Harassed_2

Student loan agreements are simple contracts and this gives the Student Loans Company (SLC) 6 years from the date you last paid or acknowledged the debt to go to court to enforce the agreement. There are two sorts of student loans and different rules apply depending upon when you took out the loan.

Old style or “mortgage” student loans are consumer credit agreements. Payments cannot be automatically deducted from your wages. The SLC has to go to court before they can enforce the debt against you. This means that the Limitations Act can apply if you have not paid or acknowledged the debt for over 6 years. (Asking for the loan to be deferred could count as acknowledging the debt and start time running again).

From September 1998 new style or “income contingent” student loans include rules to say that repayments are automatically deducted directly from your wages or through your tax return if you are self employed. This means that the SLC are still allowed to take money from your wages for a loan over 6 years old as they do not have to go to court to do so.

http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

Broken_hearted

Student loans are written off after 25 years in England

BobProperty

Purely a guess, but are they thinking you don't earn enough to start paying it back and they haven't changed your details for a few years?

grex9101

i'm really not sure what they think i'm doing, i was under the impression they tracked you via your NI number. although i'm most probably wrong on that one

amosworks

Not sure how true it is but my OH once mentioned in passing that student loans are written off when you reach the ripe old age of 50

kar

when you're 50/after 25 years - both are correct depends on the type of loan you have.

If you haven't noified the SLC of a change of address for instance there will be default notices and charges on your file.

It depends on when the SL was taken out as to whether they take it straight from you NI number or not. Check your contract information - you should have been sent a booklet when you first took out the loan detailing how you will pay it back etc.

It is not a debt that can be included in banckruptsy. I know the scottish system is different to the english system i am familiar with so check out all the documents youwere sent and the SLC website for information ont he type of loan you have taken out.

november

Thanks for the information (no thanks button)

I've just checked with Students Loan Company page for the date my loan was taken out and it says:

Any loan you have not paid back will be cancelled if you die. If you have kept up your repayments , any loan you still owe will usually be cancelled after 25 years or when you reach the age of 50, whichever is the earlier. If you last borrowed when you were 40 or over, it will usually be cancelled when you reach the age of 60. Your loan will be also be cancelled if you are permanently unfit for work as a result of disability.

(my itallics)

I have a student loan and have deferred ever since - still don't earn enough! However if I haven't still haven't made any repayments does that mean my loan won't be cancelled when I reach the age of 50 (in approx 3 1/2 years)?

The way it is phrased could be read as it will only get cancelled if you have made payments from the start (kept up payments) This would surely mean higher income people could have theirs cancelled as they would have kept up payments but not lower income people who deferred every year!

I note it also says 'usually' which makes it sound like its not a ruling but something discretionary.

edited to add link to SLC page

http://www.slc.co.uk/noframe/lr/index.html

rallymad

november wrote:

I have a student loan and have deferred ever since - still don't earn enough! However if I haven't still haven't made any repayments does that mean my loan won't be cancelled when I reach the age of 50 (in approx 3 1/2 years)?

The way it is phrased could be read as it will only get cancelled if you have made payments from the start (kept up payments) This would surely mean higher income people could have theirs cancelled as they would have kept up payments but not lower income people who deferred every year!

It doesn't matter if you've made repayments or not. If you reach 50 (or 25 years pass) then your loan gets written off. Or if you reach 60 if you were 40 when you took out the loan.

HGLTsuperstar

Does the 25yrs start from your first loan installment or when you last received a payment, as in my case they are 5 yrs apart so knowing my luck I know the answer!