Student Loan Question

MissShoes

Hi all,

I have been paying back my student loan monthly since September 2006. Payments had reached £152 a month. In September 2009 I started a new job- and from that first paycheque, nothing has been taken by Student Loan Company (SLC).

I suppose what I'm asking is, am I doing anything legally wrong by not calling them to ask why they're not taking money? I think I've held off because I'm under the impression that the loan is now at 0%?

For info, the balance is circa £10k- but as it's garnished immediately from wages (or was), I don't include it in my debt total.

All thoughts and advice very welcome,

Shoes xx

Lokolo

How much are you earning in your new job?

And yes, the current rate is 0%, that will change in September though.

MissShoes

Thanks for replying.

I'm earning nearly £39k so well over the threshold- I've always been over the threshold since starting work/my career in Sept 06.

I wondered if they weren't taking any payments because it's at 0%- although maybe this is wishful thinking?!

What's the rate going up to in September?

My emplyers have my NI number, on the taxcode form (I don't know what it's called) when I started this job, I ticked that I have a student loan to pay, I haven't changed addresses etc...

Shoes xx

Tixy

Your new employer should be making the deductions - have you spoken to them to ask why they are not?

MissShoes

Tixy wrote: »

Your new employer should be making the deductions - have you spoken to them to ask why they are not?

Hey Tixy,

no I haven't to be honest. In all honesty, I'm keeping schtum as the extra money each month is very handy. I know this is the wrong way to go about things. I am under the impression that when they do restart the payments, they can't do a lump sum for all the 'missed' payments and wipe out my wages- is this right?

Thanks for posting,

Shoes xx

IWantToBeFree_2

My OHs deductions stopped for a whole tax year when he changed jobs, but they started again once without him doing anything about it.

EDIT - They also just carried on deductions as normal, and didn't take any back payment so to speak - his P45 from his previous employer clearly showed that student loan deductions were needed.

Lokolo

MissShoes wrote: »

Hey Tixy,

no I haven't to be honest. In all honesty, I'm keeping schtum as the extra money each month is very handy. I know this is the wrong way to go about things. I am under the impression that when they do restart the payments, they can't do a lump sum for all the 'missed' payments and wipe out my wages- is this right?

Thanks for posting,

Shoes xx

They can ask for back payments I believe. I doubt they would, all the effort involved but I don't see why they wouldn't be allowed.

The repayments will be around £180. I'd be suprised if you are finding this handy on £39k. I wish I was on that

RenStar

That is very unusual. Normally, repayments can take a month or two to resume when you change employers but have never heard of it taking 5 months before, especially if you are sure that the 'continue student loan repayments' box was checked on the P45/46 form when you started your new job. If I were you, I would check first with your Payroll department as they are supposed to manage the payments on behalf of HMRC and the SLC. I'm afraid it's nothing to do with the rate being 0% - you will make repayments at a rate 9% on any earned income above £15,000. This means that for your salary of £39K, your repayments should be 9% of £24K (39-15K) or £2,160 per year or £180 per month. If like me, you do salary sacrifice for any benefits (e.g. childcare vouchers, pension, bonus sacrifice etc), this amount will be deducted before student loan repayments kick in so your repayments would be less.

The overall amount you owe on your student loan will not increase this year as like you say, the rate being 0% this year:Quote from SLC website:

Interest Rates for Income Based Loans

The Student Loans Company will apply 0% interest rate from 1 September 2009 – 31 August 2010 across the UK.

The Borrowers monthly repayments are unaffected by the rate of interest. Borrowers repay 9% of their earnings over the income threshold of £15,000.


Be very careful about the advice you take on here about student loans, there appears to be a lot of confusion about income contingent loans (which is the one you are on for loans take out after 1998) to the older style mortgage type loans which have a different set of rules and are not paid back through the PAYE system. If in doubt, despite the many faults of the SLC , their website (http://www.slc.co.uk/index.html) is actually quite informative and is always a good reference point.

R

Verbatim

Have a look at Martin's article about student loans. From memory I think it's up to you to ensure you pay. I'd cover myself from future problems by talking to employer.