Student Loan Debt

I'm in a bit of a bind....

I've got about £15K of loans for the Student Loans Company. Interest is arround 2.6%pa.

With student loan, 9% of your salary over £15,000pa is deducted. All well and good as I can afford the repayments.

But they're not charging me. I've contacted them a few times to confirm my NI number and payroll details - but they've never taken a single penny.

The interest on the loan is trivially low - so I don't really want to pay it all off from my offset mortgage.

So, two questions

1) Would I be better off not paying until they finally pull their finger out - or am I better off starting payments ASAP?

2) Am I morally "right" not to do anything further. They've got all my details - they're just not taking the money!

James
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Comments

  • crazyhazy
    crazyhazy Posts: 316 Forumite
    Well if you've already contacted them and they're not bothering to take payments, then I'd be tempted to take what you should be paying them each month and put it in an instant access savings account, I use ING and it pays 5% interest which is applied monthly. That way the money is there if they suddenly start taking payments, and you earn interest on it while they sort themselves out.
    Total Debt (27th Nov 08) £16,707.03 Now £5,102.72
    Debt Free Date [strike]Nov 2012[/strike] August 2011
  • lipidicman
    lipidicman Posts: 2,598 Forumite
    If you are disciplined, dont put it in ING - use it to reduce your offset mortgage (compare the mortgage gross rate to ING's net rate) This will give a better return, but dont let this make you feel you are better off and can spend more! I guess this is what you are doing anyway.

    Even when they do start taking money you dont want to 'pay it all off' as you say since the student loan is the cheapest debt you have - so pay the minimum.
  • meanmachine_2
    meanmachine_2 Posts: 2,624 Forumite
    First Anniversary Combo Breaker
    crazyhazy wrote:
    Well if you've already contacted them and they're not bothering to take payments, then I'd be tempted to take what you should be paying them each month and put it in an instant access savings account, I use ING and it pays 5% interest which is applied monthly. That way the money is there if they suddenly start taking payments, and you earn interest on it while they sort themselves out.


    That's very good advice. The loan company has given you money @ 2.6% which you could actually be investing @ 5%!

    You're actually paying zero interest on your student loan is it is linked to inflation. So it will always be "low". Don't worry about it. You're not doing anything wrong. It's just a quirk in the system. But don't assume that you'll never have to pay up.

    Death and taxes are unavoidable.
  • Eliza252
    Eliza252 Posts: 449 Forumite
    This happened to a friend of mine and they ignored it for over a year! - anyway, now the student loans company have realised and increased the amount they are repaying each month to compensate, (at least I;m pretty sure thats what they've done) - am not saying you should tell them but make sure that you read the small print relating to repayments and defo stash the cash away in a high interest account (tax free ISA?)
    I've made my debts bite-size too depressing to look at all at once so am handling them one at a time - first up Graduate Loan £1720 paid off! only £280 to go!!!
    Money to raise for tuition fees: £3000
    When you get to the end of your rope, tie a knot and hang on!!
  • gingercordial
    gingercordial Posts: 1,681 Forumite
    Name Dropper First Post First Anniversary
    When did you graduate? They only start taking payments from the April after you graduate, so if you finished uni in 2004 then the first payment would come out of your pay packet at the end of this month.

    If you graduated before that then this IS a bit weird!

    Your employer should be managing the repayments (you say you are on payroll) and taking them directly from your pay packet rather than you having to deal with the student loans company yourself. My repayments started without me ever having to supply the SLC with my details.
  • robindunne1
    robindunne1 Posts: 360 Forumite
    I'm in a similar situation but worse. I graduated in 2002 and they still won't take money off me. I wrote to them explaining that I earn over 24k and have done for some time, but they referred me to my payroll department who in turn referred me back to them. I'm going round in circles and can't get anyone to take the money off me! Maybe this time I've slipped through the net.
    Giving up is easy...... just keep on trying!
  • Ark_3
    Ark_3 Posts: 1 Newbie
    Sort of related ... Does anyone know if there is any truth in the rumour that after a certain number of years (?) the loan gets written off. I've heard several comments to this effect but never seen proof?
  • moneyuser
    moneyuser Posts: 1,085 Forumite
    First Post First Anniversary Combo Breaker
    I graduated in 2001 and haven't had anything taken out either. I've been sent stuff by the IR to fill in but still nothing, I put it down to my useless employer. Not that bothered really and since the threshold has increased I just miss out on having to repay anything. Hoping to change jobs this year so this will probably change.

    Never heard anything about it being written off Ark, but it will in the following circumstances

    From SLC Website
    Repayments on any loan that are not yet due will be cancelled if you die. If you have kept up your repayments, any loan you still owe will be cancelled when you reach 65 or if you become permanently disabled
  • ashmit
    ashmit Posts: 622 Forumite
    First Post
    Ark wrote:
    Sort of related ... Does anyone know if there is any truth in the rumour that after a certain number of years (?) the loan gets written off. I've heard several comments to this effect but never seen proof?
    What moneyuser said applies if you started uni after September 98, but if you started uni before September 98, the following applies:

    From here: Any loan you have not paid back will be cancelled if you die. If you have kept up your repayments, any loan you still owe will usually be cancelled after 25 years or when you reach the age of 50, whichever is the earlier. If you last borrowed when you were 40 or over, it will usually be cancelled when you reach the age of 60. Your loan will be also be cancelled if you are permanently unfit for work as a result of disability.
  • oueyouey
    oueyouey Posts: 103 Forumite
    First Anniversary Combo Breaker
    Ark wrote:
    Sort of related ... Does anyone know if there is any truth in the rumour that after a certain number of years (?) the loan gets written off. I've heard several comments to this effect but never seen proof?

    If you never earn over £10,000 you don't have to pay any of the money back
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