Student Loan Help Please!!

coopster_2

Hi Moneysavers,

Totally new to this so hope i've posted in the correct place!

I need your help please. I took out a student loan in the 'new' scheme, (after '98) which means I was liable to pay back my loan once I had started earning over £10,000. Which was fine as I new I would have to pay it back at some point. The problem is they take a % direct from my wage. Which means If i do any overtime they take a % of that or if for example I got my bonus last year which was paid in with my normal wage so they took a huge % of this.

When I went to Student Loans they said this is right that they are entitled to everything that gets paid through my wages. I queried the fact that I had never filled in an expense's record so they dont know if I have any dependents or if I am really relying on every penny. I asked if i could set up a direct debit so I could budget every month on what was going out (i know this is allowed on the old scheme (pre '98), they refused this and said its tough, its the rules and basically budget what % they will be taking.

Surely this is wrong if I am offering to pay a set amount a month. Also, i have never been sent yearly statements to say what i have paid, when i queried this they said keep my wage slips!!

Please help (sorry its a big story i just wanted to make sure i never missed anything)

pavlovs_dog

i ahvent got a clue about the paying back side of it yet - still getting my loan, havent really thought much about paying it back yet

look forward to reading the responses tho - sorry i couldnt be more help

stuwilky

Unfortunately they are correct. Its 9% of your salary above the threshold (and any associated payments - eg bonus). The huge %'age of your bonus last year would only have been 9%, not that huge compared to the 33% or so that Gordon Brown takes.

The only way to pay any other way is if you are subject to self-assessment, or you live outside the UK.

crana999

Not to be harsh, but this is a good example of why it's important to read the terms & conditions of any loan, including student loans, you sign up to. Things like this really shouldn't come as such a huge surprise.

System

Unfortunately the only way the government could figure out to operate this farce was to make it the employers responsibility to collect the payments.They work with a set of deduction tables which they can't deviate from.

sly_dog_jonah

Take comfort in the fact that in April 2005 the repayment threshold will increase from 10k to 15k, so your repayments will go down. For example, someone on £20k will payback £37.50 a month instead of £75 a month.

Midas

Just look on it as an extra income tax - the more you earn, the more you pay! Its an okay system in terms of the fact that if your income drops for any reason - which might mean you couldn't meet a fixed monthly payment - you pay less, or nothing if its below £15k p.a. from April.

zcaprd7

Not quite - the more you earn the more you will pay off and the less you'll pay overall.

Its annoying if you have other more expensive debt though...

crana999

not necessarily. if one person earned less and kept the balance of their loan in an ISA, say, they could pay the interest they would get on it (above the SLC interest rate) to the SLC as well, which would enable them to pay less out of their wages overall. If that makes any kind of sense!