Going over Student Loan threshold in middle of deferment period

Severntiger

Dear all, I've got about £8,600 of pre 1998 student loan debt and because I'm earning just below the threshold have had my loan payments deferred until June 2012.

Question is; what happens if I go over the threshold in the middle of the deferment period? Do I have to inform the student loans co and start paying back the loan when I'll start my new job? Or can I await until my deferment period ends in June 2012 before I have to pay it back?

In summary its likely that I'll get offered a job starting 1 Nov 2011 earning more money which takes me over the threshold. Because my pay will only be increasing slightly, if I have to pay it back as of 1 Nov 2011 the new job will actually leave me worse off because the monthly payments to the student loans co will actually be greater than my pay increase! In a perverse sort of way part of me was hoping that I'd never have to pay it off and it would be wiped out when I turn 47.

Any advice would be helpful. After previous experience of phoning SLC/Thesis Services, various legal battles (which I won!) & the governments betrayal of dishonouring a contract in raising it from CPI to RPI I don't trust them for impartial advice!

Ta very much

LovelyLeeds

Severntiger wrote: »

In a perverse sort of way part of me was hoping that I'd never have to pay it off and it would be wiped out when I turn 47.

And there you have it ladies and gentleman, the reason why the world is bankrupt.

Severntiger

Helpful advice would be nice. Rather than sarcy comments from people with too much time on their hands ;-)

Dabooka

My understanding (which is limited on Student Loans mind) is that it's deducted from source as soon as you start earning over the threshold.

I know your worried about the actual pay cut in real terms, but it isn't really; chances are that as time goes on your pay will increase, new job roles become available and it's less of an issue. Basically it's pay back time.

I can't see the point in gong to uni and then working at a low wage for 25 years just to avoid paying it!

DCFC79

Severntiger wrote: »

Helpful advice would be nice. Rather than sarcy comments from people with too much time on their hands ;-)

what advice would you like then, would you rather peple tell you to stick with jobs that mean you earn below the threshold

DCFC79

Severntiger wrote: »

Dear all, I've got about £8,600 of pre 1998 student loan debt and because I'm earning just below the threshold have had my loan payments deferred until June 2012.

Question is; what happens if I go over the threshold in the middle of the deferment period? Do I have to inform the student loans co and start paying back the loan when I'll start my new job? Or can I await until my deferment period ends in June 2012 before I have to pay it back?

In summary its likely that I'll get offered a job starting 1 Nov 2011 earning more money which takes me over the threshold. Because my pay will only be increasing slightly, if I have to pay it back as of 1 Nov 2011 the new job will actually leave me worse off because the monthly payments to the student loans co will actually be greater than my pay increase! In a perverse sort of way part of me was hoping that I'd never have to pay it off and it would be wiped out when I turn 47.

Any advice would be helpful. After previous experience of phoning SLC/Thesis Services, various legal battles (which I won!) & the governments betrayal of dishonouring a contract in raising it from CPI to RPI I don't trust them for impartial advice!

Ta very much

Quoting for prosperity

mysk_girl

If it is a pre 1998 loan, as far as I am aware, the deferment remains in place for the period agreed - you will be asked to submit payslips to re-defer next year and obviously you won't be able to, so your repayments will start next July.

I can sympathise with the sentiment that a payrise will actually make you worse off - I graduated 2001 with 4 pre 1998 loans and got a job paying £50 a year over the deferment limit. The £126/month payment was 11% of my entire NET salary and was my most significant outgoing bar rent for the entire period of 5 years that I was paying it off. I find it hard to sympathise with people who moan about paying 9% of everything over £15k, I would have been delighted by this! BUT it felt good to be paying it back.

Why don't you put your SOA up on the debt free boards and see if anyone can help you trim your budget now, so that when the payments start next summer, you are prepared for them? Also you can make voluntary payments to the SLC, so even if you can pay a bit now it will reduce the payments you have to make next year.

starfish1975

I had 3 student loans - dating from 94/95/97 - I only started paying the loan back 3.5 years ago - as I was then earning over the threshold - I only started to pay the loan back once my agreed deferment year ended. I started off paying back £95 for a 5 year period - which came out of my account via direct debit each month.

At one time I thought I would pay it off in one lump some from my savings - just to reduce the number of direct debits i had each month - but when I looked into it - I was better off keeping my savings and earning interest on them as the interest on the student loan was really low. However I got my statement a few weeks ago and noticed that my payments were due to increase and that the interest had jumped to over 5%.... So i quickly got on the phone and paid it off! Its good to get it out of the way..... but it annoys me to think that I had to pay a lump some from my savings for money that I "squandered" over 15 years ago.. on nights out and drinking!!! But.. I am sure it was fun at the time!!!

Severntiger

DCFC79 wrote: »

what advice would you like then, would you rather peple tell you to stick with jobs that mean you earn below the threshold

I asked for advice on when I would have to start paying back my loan, not advice on what life path to take. I was also being a bit tongue in cheek with my keep a low income until I'm 47 comment. Another sarcy comment from yet someone else who likes to judge others but not actually offer any help. Useful. Not

Severntiger

mysk_girl wrote: »

If it is a pre 1998 loan, as far as I am aware, the deferment remains in place for the period agreed - you will be asked to submit payslips to re-defer next year and obviously you won't be able to, so your repayments will start next July.

I can sympathise with the sentiment that a payrise will actually make you worse off - I graduated 2001 with 4 pre 1998 loans and got a job paying £50 a year over the deferment limit. The £126/month payment was 11% of my entire NET salary and was my most significant outgoing bar rent for the entire period of 5 years that I was paying it off. I find it hard to sympathise with people who moan about paying 9% of everything over £15k, I would have been delighted by this! BUT it felt good to be paying it back.

Why don't you put your SOA up on the debt free boards and see if anyone can help you trim your budget now, so that when the payments start next summer, you are prepared for them? Also you can make voluntary payments to the SLC, so even if you can pay a bit now it will reduce the payments you have to make next year.

Hi. Thanks very much for this. Very useful. This means I'll have the higher earnings for 8 months before I have to start the repayments, so will save over a £1,000 in the short term. I don't mind having to pay it back eventually, especially as I'll be earning a half decent wage, I should be OK with the payments as they'll be less than 10% of my income but thanks for the budget advice anyway. Take care

Severntiger

starfish1975 wrote: »

I had 3 student loans - dating from 94/95/97 - I only started paying the loan back 3.5 years ago - as I was then earning over the threshold - I only started to pay the loan back once my agreed deferment year ended. I started off paying back £95 for a 5 year period - which came out of my account via direct debit each month.

At one time I thought I would pay it off in one lump some from my savings - just to reduce the number of direct debits i had each month - but when I looked into it - I was better off keeping my savings and earning interest on them as the interest on the student loan was really low. However I got my statement a few weeks ago and noticed that my payments were due to increase and that the interest had jumped to over 5%.... So i quickly got on the phone and paid it off! Its good to get it out of the way..... but it annoys me to think that I had to pay a lump some from my savings for money that I "squandered" over 15 years ago.. on nights out and drinking!!! But.. I am sure it was fun at the time!!!

Thanks also. You confirmed what the other person said about not having to pay the money back until the deferment is up. Happy days. Yeah bit of an !!!! that savings rates are around 2-3% whilst the student loan interest is 5%+. I thought it below the belt when the SLC/Government lied and cheated on their agreement and changed the interest from CPI to RPI. I've never trusted the government/big corporations. But hey thats life. Enjoy the sunny weekend.