Becoming a Student & unable to pay loan

polkadot01

Hi there, I am looking for some advice...

In September I will be a full time Social Work Student. I have a loan which I used to rennovate a property, however, due to my change in circumstances I am unable to afford the £170 a month repayment.

I have also had to rent my house out and house share as things are so tight.

At the moment I have very good credit and have never missed payments or defaulted, the loan is with Halifax.

I don't want to stop paying the loan completely, but reduce the monthly payment significantly (to about £20) for the next 3 years.

Is this an option and how do I go about doing this?

Thanks for any advice!

Delree

Are you doing this course because of redundancy (or something similar) or because you wanted to make a change?

duchy

Perhaps you could consider defering your college place for a year until you've paid off the loan ?

Is the loan secured or unsecured ? How long of the term is left ?

Are you in negative equity ?

awayinchina

Ok,
there are a few things you can do. You will be getting a full student loan. which equates to approx £3500 every term. Plus you can get a student bank account which will allow you an overdraft.
When in study all universities have a fund for crisis (usually mature students with financial commitments) you can apply for that as soon as you start your course. Also, you can get part time work ie. student union bars or a shop as all courses at undergrad especially the first year do not count towards your degree (you need to pass).
you have options, do not put the study off as course fees are set to continue to rise.
I did my unergrad at 30 and have since done a masters and currently final year PhD.

awayinchina

duchy

Not much use getting a degree a year earlier if the house is repossessed in the meantime though.

OP has to find £2040 a year out of his/her student loan before food, rent, books etc and if fails risks losing their good credit rating which could have other consequences in the future.

Yes education is important but so is financial education and keeping the existing property if possible (no mention of a mortgage OP is there one getting paid for by rent or are you mortgage free-If the former what happens if your tenants don't renew or default and it takes a few months to find new tenants-could you still pay the mortgage ?

I'm honestly not saying you shouldn't do this but I think you need to be very clear on the "what if's". If your loan is secured on your property you could be putting that property at risk -if the property is mortgaged -does your mortgage allow you to let ? Could the loan be rolled into the mortgage ? Have you found a part-time job yet? Lots of questions that need to be resolved by you to decide how viable this is for this September. Would a year of living in shared accomadation , working two jobs and saving like crazy give you enough of a cushion to make it more viable next September for example ?

awayinchina

Duchy, you have valid points for sure. however, student note takers earn upto £12ph I did this when self funding a MSc and BSc. Plus did friday night and saturdays at supermarkets. other options are find a university close to home (ie you remove the living costs and live in your own home). As clearing is less than a month away this might be an option. Another, important fact is being at university is never financially easy you can be comfortable from time to time but 90% of the time you will be in the red and thats the reality.
All universities have student support and they are run independant of the university. Best thing is to speak directly to the student support unit ASAP and find out what the OP can get. Crisis payment, hardship funds etc. then place all of debts on a spreadsheet and offset to the income. Also, part-time work is handy especially if at a supermarket and you get the 10% discount (wise move). 1st year undergrad you have a lot of spare time and I was making £230 pcm doing note taking plus a part-time job. I used the note taking as making notes for my own course (I picked the course I would not take on).
It might not be an option to study and taking 1 year out to get money in might be the only option. But, september is not far away and you really need to speak to the loan company, student support and get all your information together. the earlier you inform the university the better as they might well keep a place for you next year. Or offer part-time study which might best fit where you are now.

Good luck

natlie

Hi I am with awaywithchina I worked through my degree I did about 5 shifts in the pub per week. My friend waitressed and she never took any loans and paid her fees herself.

19lottie82

I also worked during my time at Uni, however I think with Social Work courses you have to do a lot of placements too which quate to the hours of a p/t job. My friend did a SW course, a placement and held down a p/t job, but it was hard!

If working isn't possible OP, you may be better in postponign the course until you can afford it.

polkadot01

Hi all, thanks for the replies.

Just to clear a few things up, sorry I should have put them in my original post...

I have my mortgage covered by my tenants and the loan is not secured on the property.

I am now house sharing, so have rent as an outgoing.

I will be working 2 part time jobs to cover my rent and car finance (as a car is essential for my course) The reason I have chosen to study is that I am on a fixed term contract until September, which the funding doesn't look good for, so decided to apply for the social work degree as it's my background and there are many many jobs available with a good salary attached. I've worked hard to get on the course (700 applicants for 22 spaces) so want to take advantage of this opportunity, so I'm having to take one step back to hopefully take two forward in three years time.
Is there an option of paying small repayments for 3 yrs then paying normal repayments when I graduate and get a job?

rising_from_the_ashes

It's highly unlikely they'd agree to reduced payments without the account going into default (which they will be entitled to do as you've not stuck to the original terms of the agreement) - which will then affect your credit rating for 6 years.

Does the amount you rent the house for give any profit at all - which could go towards the loan payments?

Time_to_face_the_music

Well done on getting on the course :T

How much is outstanding on the loan and how many payments are currently remaining?