Student Loan Help - First contact in 10 years

anirishlass

Morning everyone,

long time reader but first post, so please be gentle.

Yesterday I received a letter from a debt collection agency seeking payment of £3750 for arrears on a student loan taken out more than 10 years ago.

Now I admit this is my fault as I failed to notify the SLC of many changes of address since graduation. It also doesn't help that I honestly forgot about the loan in the first place - unbelievable, but true!

I cannot afford to pay the whole amount in one go, but read somewhere that I should be able to arrange 60 monthly repayments - is that true?

Any advice or info really appreciated as I'm at a bit of a loss as to what to do and still reeling from the "surprise".

Thanks

Rafter

Irishlass,

Best thing you can do is to contact them and see what they offer. I'm sure they will not demand full payment.

Remeber too that if that is just the arrears element, you will probably have to start making the normal repayments due as well.

Make sure they are genuine arrears too - if you weren't earning over the threshold for any of the last 10 years, then no repayments would have been due in any case.

Unfortunately your defense that you forgot about the loan, even if true isn't going to help, but a positive step by you to demonstrate you want to pay what you owe, fairly, over a reasonable period I'm sure will be looked on favourably.

Good luck.

R.

anirishlass

Thanks for that Rafter,

I hadn't even thought about the possibility of defferments. I just about earn around the threshold now! I'm guessing it would be a real hassle trying to go back over ten years and prove my earnings for each year of a whole decade, so I guess I'll just see what arrangement we can agree and start paying it off?

And honestly, it is true that I forgot about it - wish I hadn't...

CLAPTON

as the debt is 10 years old and if you have not acknowledged the debt in that time then the debt is statute barred and they can't legally enforce the loan repayment.

see this link for more details
http://www.nationaldebtline.co.uk/england_wales/factsheet.php?page=25_liability_for_debts_and_the_limitation_act

anirishlass

Hi Clapton,

Someone did mention that to me. But I had a bit of a search on the forums and remember someone saying that student loans we made by the government and therefore the statute barred principle wouldn't apply. Is that true? I guess it gets even more complicated as the government sold the loans on to a private company...? I'd be interested to know which is the case, although I borrowed the money so I am going to pay it back. Fairs, fair.

CLAPTON

while student loans are no longer written off in bankruptcy, the statute of limitation still applies.

however, give nationaldebtline a ring and check it out.

the fact that they are passed to DCA makes no significant difference except that the DCA probably bought them for a small fraction of the nominal price.

anirishlass

Thanks again Clapton,

have now read the link and it appears to be true. May give them a call to check the exact circumstances. Still feel that I should repay as I did have the loan, OH may disagree though! Hopefully it might put me in a good position to negotiate with them.

Whats a DCA, by the way?

CLAPTON

DCA is a debt collection agent.. basically a company that buys debts and tries to collect them.

they often buy at very low prices say 10p in the pound or even less for old debts.

I do think you are being very responsible with your view that you should repay the debt. if your money would in fact go back to the tax payers that financed it in the first place then i would agree but in this case it will go to a private company.

anirishlass

Don't say that Clapton,

I thought I was doing the right thing and now you've given me something of a dilema. I won't lie and say that the money wouldn't be missed, it really would. Will have to talk to the OH and see what he thinks. Now feel bad that I've cost fellow taxpayers 90p in the £. Will be responsible in future.

Thank you for all your advice and information. This site really is a godsend.

Rafter

I'd be very careful about the statute barring rules on student loans. They are certainly a special case when it comes to bankruptcy and as they a government debt you should do the right thing.

Agree with Clapton though, what you don't want is the money going to a debt collection agency who have bought the debt - you want it going back to the government to fund higher education for others and better public services.

It may be worth contacting the student debt company, innocently, and telling them that you think your income now exceeds the threshold and that you need to start making payments. They may then pull your case base from DCA and get you paying off a modest sum each month as your income grows.

No moral dilemma that way!

R.

anirishlass

That's a thought Rafter, thanks.

Would SLC be able to / can they "pull" it back from the dca once they've sold it on?