student loan deferment refused due to tax credits

justme2010

Hello, I'm after some advice or wondering if anyone else has been in this situation.

I've been refused deferment for my student loan as the tax credits I receive take my earnings over the thresholds. My tax credits are payments towards the nursery fees for my toddler, I am struggling to make up the difference as it is.

I am really worried about this, they want me to pay £167 every month, which is something I don't have.

I'm a single parent and money from tax credits takes into account that my wages wouldn't be able to pay for child care without them. I just don't know what to do.....anyone been in this situation and found a way out?

thanks in advance

jason1231972

justme2010 wrote: »

Hello, I'm after some advice or wondering if anyone else has been in this situation.

I've been refused deferment for my student loan as the tax credits I receive take my earnings over the thresholds. My tax credits are payments towards the nursery fees for my toddler, I am struggling to make up the difference as it is.

I am really worried about this, they want me to pay £167 every month, which is something I don't have.

I'm a single parent and money from tax credits takes into account that my wages wouldn't be able to pay for child care without them. I just don't know what to do.....anyone been in this situation and found a way out?

thanks in advance

I don't know the exact specifics re: student loans in particular, but as you will now have gathered, Tax Credits are generally classed as 'income' for many intents and purposes. Mortgages, loans, credit cards and so on are quite happy to accept Tax Credits as a form of income when providing you with money. The flipside is that anyone you owe money to also considers your TC to comprise a proportion of your income. I don't see any obvious 'way out' of this, though somebody else here may have an alternative suggestion.

Have they asked for all details as to your outgoings as part of their refusal? If so, have you provided them with full details, i.e. £xx is spent on childcare, and so on...?

justme2010

Thanks for reply, the tax credit form I sent off for proof of income shows that the only credits I receive are for the childcare element, as for list of outgoings, nothing has been requested.

I'm just so worried as not sure that I'll be able to afford to go to work, as got no one else to look after little one if can't pay the nursery fees.

only got my letter today, so this is why I'm in panic mode I think

shop-to-drop

Would you be better off to pay for childcare with childcare vouchers through work as that would reduce you income not increase it.

MonkeyMad

Didn't think Student Loan deferment had any relationship to outgoings, only on level of income?

Use of Childcare Vouchers will reduce any childcare element of tax credits payable ie you will receive less so you will have to calculate if you are actually better off using vouchers (which would of course depend on whether it avoids paying back the SL) .

justme2010

hi, thanks for the advice, but without the tax credits I wouldn't even be able to afford the nursery. The nursery fees plus my rent is the whole of my wages lol.

Anyway, they also take childcare vouchers into consideration.

justme2010

as the tax credits I receive are only for the childcare element and it clearly states on my award form how much the nursery fees are, I didn't think they'd class this as income

Tixy

£167 a month?

How much is your income from your job per year?

You pay 9% of any income your income over £15795, so is your total income around £38k?

justme2010

no I have a pre 98 loan, which is different to yours. My salary is 22000

Tixy

justme2010 wrote: »

no I have a pre 98 loan, which is different to yours. My salary is 22000

I don't have any student loan. My mistake to assume that you were post 98, most of the queries we have on here tend to relate to the later income contingent loans.

To answer your question, yes the tax credits will count towards your total income when deciding if you have reached the threshold.

jason1231972

It may be possible to negotiate these repayments in the same way it's usually possible to negotiatethe repayment of any credit account, but there's a couple of things to consider:

1) Whilst I already assumed you had a pre-1998 loan, I know very little about these things, so as far as I know, they may not negotiate at all. There may (or may not) be special rules specific to the SLC.

2) Renegotiating repayments on any credit account - SLC or otherwise - on the basis of financial hardship can trash your credit rating, if you're concerned about that at all.

I assume the first stop would be to try to speak to someone in more depth. I'm guessing they have some kind of debt management team. Be clear on what will and will not be reported to credit reference agencies, in the event they accept reduced or deferred payments. If in doubt, seek advice from the CAB, CCCS, etc.