Repaying a career development loan

stephhhhaniee

I have just finished my masters degree which I completed to better my chances at moving forward in my career. To fund this I took out the full £10,000 loan as the course cost £6500 and the remainder I used to pay for my rent whilst studying (although I also had TWO part time jobs which paid for the rest of the rent, food and petrol).

I finished at the end of September and my first repayment date was the 13th November. As soon as I finished the course I was job hunting, during the end of the degree it was very intense thus leaving me no time to keep applying for various positions.

Within a month I had 2 interviews scheduled for early November. During that month I worked more frequently at my two part time jobs in order to pay the rest of the rent that had been previously covered by the CDL. But this money JUST covered all my essential bills leaving me no extra money for my first repayment date. I contacted the Co-op and they advised me to contact stepchange, a debt charity, who then assured me things would be resolved and that I was doing the right thing to pay my essential living costs (and I mean essential as in a roof over my head and my electricity and water) instead of the co op CDL.

I wrote to the co-op with my budget and offered to pay 10% of the loan until I gained a full time job which worked out as £21, which really was all I could afford. They wrote back to say that they would not accept any reductions and if I did not pay my details would be passed to another debt collection agency. Great.

What most annoys be about the situation is that IF I was unemployed and on benefits, even if I was receiving the same amount that I now EARN in my part time jobs, I would be allowed to defer the payments!

So when I am trying to stay employed in any sort of job I can to earn money rather then take from the government and tax payers, I am being penalised compared to someone else who refuses to take any job, relevant to their career or not, and doesn't EARN a penny, but who gets to suspend their repayments. Its an extremely frustrating situation, and perhaps in the future it should be looked at in terms of amount of money being earned... e.g. even if I work 3 days a week (because that's all I can get atm), just to stay in employment which I think is the respectful thing to do, I clearly cannot afford the full monthly repayment right now ontop of all my essential living costs.

ANYWAY. Thankfully I have been offered a job in my chosen career and begin this month (December) so will shortly be able to begin the full repayments. I just wish the co-op would be more understanding in that to get a job straight from uni is not as easy as it used to be and whilst I should be over the moon I have now gained a job, I still am extremely stressed over the next two payments (December and January) in which I will not be able to repay as my first pay date is the end of January!

I have decided to let the co-op pass on my details to their debt collection agency and if need be I will explain my situation to any visitors. I really do want to repay my loan, I am very grateful that I was lent the money as it did enable me to do my masters and ultimately help me to get this new job. However, I think realistically people need to be given 3 months from finishing their course to find a job and actually get paid from the job! I feel I have done very well to get the job I have done in such a short amount of time but there just seems to be no flexibility with the bank, even if I can assure them full payments will be made from the end of January!

I really wrote this thread for other people in the same situation. I have felt so stressed recently and want other people to know that there are other people in similar circumstances. All you can do is try to take any job you can right now to be able to make a contribution to the loan and TRY not to let it overwhelm you. It will be interesting to read experiences from other people in similar situations.

AND please... don't go on about how I agreed to the terms and conditions of the loan and that I knew I had to pay it back etc.... I WANT to pay it back and not have the debt hanging over me.. it is just a very short amount of time to obtain and get paid from a new job in time for the first repayment. I hope in the future they may relook at this amount of time.

John1993_2

stephhhhaniee wrote: »

What most annoys be about the situation is that IF I was unemployed and on benefits, even if I was receiving the same amount that I now EARN in my part time jobs, I would be allowed to defer the payments!

So when I am trying to stay employed in any sort of job I can to earn money rather then take from the government and tax payers, I am being penalised compared to someone else who refuses to take any job

Looking at things like this is not going to help you. There is no fairess onbudsman making sure that no-one is helped more than you, so it's not helpful to feel bitter. It's also not helpful for you to allow the situation to deteriorate. If your debt is defaulted on, then your credit file will be marked with this default, and you'll struggle to get credit at a reasonable level for the duration.

You'll still also owe this loan.

tiger_eyes

I hear your frustration, but you've known that this would happen ever since you took the loan out - what was that, eighteen months ago? That was plenty of time to put aside an emergency fund in case you had to cover the first few months' repayments out of your savings. I was in exactly your position and repaid my CDL from savings until my income picked up.

stephhhhaniee

John1993 wrote: »

Looking at things like this is not going to help you. There is no fairess onbudsman making sure that no-one is helped more than you, so it's not helpful to feel bitter. It's also not helpful for you to allow the situation to deteriorate. If your debt is defaulted on, then your credit file will be marked with this default, and you'll struggle to get credit at a reasonable level for the duration.

You'll still also owe this loan.

I do completely understand this... but there isn't any more I can do until the end of January. I will continue working in one of my part time jobs until then so I will be working 6 days a week. Unfortunately I cannot make repayments until then. And for the record... it does actually make me feel better to think about things in this way.

stephhhhaniee

tiger_eyes wrote: »

I hear your frustration, but you've known that this would happen ever since you took the loan out - what was that, eighteen months ago? That was plenty of time to put aside an emergency fund in case you had to cover the first few months' repayments out of your savings. I was in exactly your position and repaid my CDL from savings until my income picked up.

It would have been pretty much impossible for me to save anything up whilst paying my essential bills and studying full time and working 2 part time jobs. It was 14 months ago.. I started at the beginning of October. You were obviously lucky to already have savings, or be living in a very low rent accommodation to be able to save whilst studying. I did come out with a distinction so in a way I am glad I put the studying first and didn't take up a third job.

I really wrote this for people in the same situation rather then people to pass judgement. I have always tried my best to keep on top of all my finances and I have no other debt but this.

John1993_2

stephhhhaniee wrote: »

And for the record... it does actually make me feel better to think about things in this way.

I wasnt referring to how it makes you feel, I was talking about mitigating the effect on your credit file as much as possible. If you ar starting a career then it's very likely that in the next six years you may want to think about having a mortgage, and you are making that more difficult once the debt is passed to an agency who'll start levying fees, and entering defaults onto your file.

stephhhhaniee

John1993 wrote: »

I wasnt referring to how it makes you feel, I was talking about mitigating the effect on your credit file as much as possible. If you ar starting a career then it's very likely that in the next six years you may want to think about having a mortgage, and you are making that more difficult once the debt is passed to an agency who'll start levying fees, and entering defaults onto your file.

I know they are all valuable points I have thought about myself. But there is just nothing else I can do. If I don't have the money to pay for it.. I simply can not pay. I do realise it will effect my credit history but I hope that as soon as I begin to make the payments it will begin to recover.

John1993_2

You can't get some seasonal evening or weekend work to find the extra to make the first payments?

You could also ask about a salary advance. Many companies understand that new workers will have a lot of bills before they get paid, and will advance a salary payment to help.

tiger_eyes

stephhhhaniee wrote: »

It would have been pretty much impossible for me to save anything up whilst paying my essential bills and studying full time and working 2 part time jobs. It was 14 months ago.. I started at the beginning of October. You were obviously lucky to already have savings, or be living in a very low rent accommodation to be able to save whilst studying. I did come out with a distinction so in a way I am glad I put the studying first and didn't take up a third job.

Congratulations on your distinction! That's very impressive.

I don't mean to pass judgement, I know it's tough and I understand that you're frustrated. It's just that this was a particularly foreseeable situation, and there was plenty of time to prepare before and during your degree, and you're obviously a hard-working person with a strong work ethic (unlike me!) so I'm scratching my head a bit. Glad you found a job.

iolanthe07

Could the bank of mum & dad help out a bit? I would be happy to lend my daughter some money to tide her over, especially if she got a masters' degree with distinction!

National_Debtline

Hello there.

Sorry to learn about the situation.

There could be other options, it's very dependant on your precise circumstances though. The first thing to do would be to have a go at completing a financial statement/statement of account. This will allow you to calculate how much you need to live on (e.g. housing costs, utility bills, travelling costs and housekeeping etc.). You can then see how much money there might be left to offer to the loan. This amount is known as your surplus. If you have other debts too you should divide this surplus up amongst all creditors, this is typically arranged on a pro-rata basis with the biggest debt getting the greatest share of your surplus. You can then write to all creditors asking them to accept your offer of payment and to also consider freezing the interest and charges.

There is a very useful guide with budget sheets available for free via our website: http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#4

If you do have to make reduced payments it can affect your credit score. You should only take this route if you have no other viable alternatives.

There are a few different options available for dealing with debts, here's a link to a brief otherview of them all:
http://www.nationaldebtline.co.uk/england_wales/page.php?page=35_options_for_dealing_with_your_debts

Best wishes,

David @ NDL.