Post-1998 loans charged at pre-1998 rates - HELP!

tekton23

Hi,

Really need some help and advice here! I found out today that my 1997, 1998, 1999, 2000, 2003 and 2005 loans have all been grouped together as ‘Fixed Term’ loans (i.e. pre-1998) and are therefore all subject to the same pre-1998 interest rate of 4.4%.

This is really unfair.

I also have one other loan from 2006 that is being charged at the income contingent rate of 1.5%.

I have been told on the phone that this is due to the way my Local Council processed the loans at the time they were taken. But surely that is nothing to do with me. I was also given no warning of this at the time. Has anyone else experienced this. Am I missing something?

The difference will be thousands of pounds in interest.

Really desperate as the sum due to be charged at 4.4% is over £14,000 – as if this wasn’t difficult enough to handle already!

T23

Oldernotwiser

How have you managed to have student loans for 7 years' of study?

tekton23

Architecture..the long haul


T23

epm-84

tekton23 wrote: »

Really desperate as the sum due to be charged at 4.4% is over £14,000 – as if this wasn’t difficult enough to handle already!

You're very lucky to have done Architecture and been only £14,000 in debt at the end of it. My 3 year BSc almost cost that much.

I was also given no warning of this at the time.

The T&Cs that apply for your first year of student funding always have applied for the subsequent years of study. New T&Cs only apply to new students not to continuing students. Unless you withdrew from uni and started a new course after 1998 then the council have done the right thing.

I bet you weren't complaining last year when you had negative interest for having a pre-1998 loan, opposed to 0% interest on a post-1998 loan.

tekton23

Then why is the 2006 one a different type? It was the same course. Also I don't think the savings made on -0.5% are a benefit compared to the current rate of 4.4%.

T23

Poolie

Do you have a different customer reference number for the 2006 loan? Only reason I can could consider is that the information you provided in 2006 didn't match the other years information therefore the system didn't see it as the same person. Did you provide your previous loan number on the application when you came to application.

You would have no come back on SLC or your local authority as you signed the loan request form under the terms to have your 1998 loans onward classed as non-mortgage loans.

epm-84

tekton23 wrote: »

Then why is the 2006 one a different type? It was the same course.

Maybe it's because the loan terms would have expired before 2006 as your course should have finished before then. You haven't explained why you took 9 years to do a 7 year course, which may explain the change in T&Cs or maybe it's a mistake in your favour as Poolie has stated

Also I don't think the savings made on -0.5% are a benefit compared to the current rate of 4.4%.

You don't know that it will be 1.5% for post-1998 all year. If the Bank of England base rate rises the interest rate for post-1998 loans will rise accordingly up to a maximum of 4.4%.

Also don't forget about the effect of compound interest.

Poolie

epm - this would only affect his 2006 loan if BoE raising interest rates. All his other loans are at 4.4% since they were under pre 1998 terms.

I just wonder if there was a change in the regulations that said there from 2006 intake that all loans would be income based and not older mortgage style. there was a lot of changes in those regulations so there could have been something in the student loan act as well.

When it comes to repaying he will have to pay his 2006 at the same time as all his others and will have a repayment from his salary as well as SLC taking money from his bank account. The repayer will have no option to say which he can do first as it was not a PGCE course which is the only one which allowed a choice.

epm-84

Poolie wrote: »

epm - this would only affect his 2006 loan if BoE raising interest rates. All his other loans are at 4.4% since they were under pre 1998 terms.

Yes I was replying to their post saying about the negative interest they would have got last year on their loan from it having pre-1998 terms not cancelling out the 4.4% this year.

I just wonder if there was a change in the regulations that said there from 2006 intake that all loans would be income based and not older mortgage style.

I was thinking that as well. The course the OP took should have finished in 2004 or 2005 if they took a year out, so the terms may have been changed then as they may have assumed all pre-1998 loans were complete by then.