Student Loan Repayments might sink me!

tekton23

Hi,

I have recently received a letter to say my repayments for my student loans may go up from £150 a month to £375 or so. The reason for this is that I am earning over a certain amount compared to last year. This is a good salary, however I owe a family member £650 a month too as they consolidated my other student debts about a year ago.

I could just about manage to make ends meet and have also been clearing my 1 remaining overdaft and credit card, however the rise in the student loan repayment will sink me. I am not sure what to do.

The main problem is that the larger debt with my family is 'off the record' and so the student loans people think I should easily be able to afford £375 a month. They are right, I should!

I still want to re-pay, but just not that amount. Has anyone ever reduced their monthly repayment?

Any other ideas? My current monthly debt repayments are over £1100 leaving me very little to live on after rent and bills are paid. I have already reduced all outgoings and I have nothing left to sell on ebay.

T23

Tixy

Hi teckton

As far as I am aware the student loans do need to be paid at the full/proper rate based on your salary. Could you perhaps post up a statement of affairs to see if anyone has any other suggestions how you can make things a bit easier financially. http://www.makesenseofcards.com/soacalc.html

DarkConvict

The student loan does have to be paid based on your income, and it is taken at PAYE, so the deduction is taken before it even gets to your bank account.
The only way a student loan increase should affect you is if you failed to notify the loans company about and increase in income or if you are already overspending.
Student loan repayment is proportional so an increase in salary is still a bigger increase income than a increase in expenditure.

You will probably need to negotiate a lower monthly payment to your family member as you simply will not have the money, i can only think you set the repayment to high and didn't realise your student repayment was going up as well.

DarkConvict

Actually if your loan is pre-1998, you pay the SLC manually yourself. - http://www.moneysavingexpert.com/loans/student-loans-repay#interest

If your loan is pre-1998, and earn under £27,000 you can defer payment.

Post 1998 loans, currently cannot be deferred, but a 2 year holiday is due to be announced in the future.

MyLastFiver

The Student Loan Company are one of the creditors on my DMP. They accepted a greatly reduced payment, have never chased me or defaulted me.

If you can't afford the hike in payments, write to them with your income & expenditure showing what you have available to pay them. They will probably accept it.

I should add that my student loans are pre-1998.

Anna1701

Hi Tekton23,

I'm a little confused......

I am currently studying for my Teaching Diploma whilst working full time and have been offered a student loan which I am really tempted to take up as its a better interest rate than most loans but your post has scared me a little that I wont be able to afford the repayments.

Reading on the student finance website, it says that if your loan is post 1998 then the amount you pay will be 9% of the amount you earn over the £1250 per month threshold. Now I earn approx £2k a month so i would expect my repayments to be about £70-£100 per month, is this not right???

Any info you may have that will prevent me from getting into more trouble woud be appreciated.
Anna

DarkConvict

This should help you Anna - http://www.direct.gov.uk/en/EducationAndLearning/UniversityAndHigherEducation/StudentFinance/RepayingStudentLoansCoursesStartingFrom1998/DG_10034867

Anna1701

Thanks DarkConvict, thats where I was getting my info from too but then why is Texton's repayments so high!?!

DarkConvict

tekton has not told us his monthly income, only that he is paying over £1100 alone in debt repayments. £375 a month is roughly a £50,000 salary (£4100 a month). If he is living in london to earn that, then £2000-3000 can be eaten away in living costs, add on debt repayments i can see why he cannot afford it.

The answer is simple, cut back on day to day living.