Overseas Repayment of Student Loans

SmallPaws_2

Hello everyone,

My partner and I live in Australia and will remain here for the forseeable future. We both have student loans, totalling around 50,000GBP between us. We informed the SLC that we had left the UK and were instructed to fill out Overseas Assessment Forms. We are both employed. The cost of living here in Perth is very high. If you convert the salaries we receive here into GBP we appear to be high earners but this is a different economy and is not actually the case. Money is pretty tight. Furthermore, for the overseas assessment the SLC look at your salary before tax, rather than after. As a result, they seem to think we are a lot more comfortably off than we are in reality! Our repayments have been calculated really highly and we just don't know how we are going to afford them. I have managed to clean out my savings paying mine off for the year but my partner's is a lot higher (spent more time at uni doing Masters) and we are currently figuring out what we can sell. It is all pretty unsettling particularly as we are out here without any family support system and money worries aren't something that we need right now!

My question is firstly, does anyone have experience or heard anything anecdotal from others about paying off the loan when overseas? Secondly, what happens if we make regular payments but only pay what we can afford? What if we only paid half the amount?

I have called the SLC and received a vague and noncommital response and I received a letter telling me if I didn't pay x amount they would begin legal action. What can they do?

Thanks for reading. I am a bit clueless when it comes to financial stuff so sorry if this seems like a naive question!!

CLAPTON

SmallPaws wrote: »

Hello everyone,

My partner and I live in Australia and will remain here for the forseeable future. We both have student loans, totalling around 50,000GBP between us. We informed the SLC that we had left the UK and were instructed to fill out Overseas Assessment Forms. We are both employed. The cost of living here in Perth is very high. If you convert the salaries we receive here into GBP we appear to be high earners but this is a different economy and is not actually the case. Money is pretty tight. Furthermore, for the overseas assessment the SLC look at your salary before tax, rather than after. As a result, they seem to think we are a lot more comfortably off than we are in reality! Our repayments have been calculated really highly and we just don't know how we are going to afford them. I have managed to clean out my savings paying mine off for the year but my partner's is a lot higher (spent more time at uni doing Masters) and we are currently figuring out what we can sell. It is all pretty unsettling particularly as we are out here without any family support system and money worries aren't something that we need right now!

My question is firstly, does anyone have experience or heard anything anecdotal from others about paying off the loan when overseas? Secondly, what happens if we make regular payments but only pay what we can afford? What if we only paid half the amount?

I have called the SLC and received a vague and noncommital response and I received a letter telling me if I didn't pay x amount they would begin legal action. What can they do?

Thanks for reading. I am a bit clueless when it comes to financial stuff so sorry if this seems like a naive question!!

The legal situation and general level of flexibility, is probably about the same as you asking the Australian tax people if it would be alright to pay half your Aus tax because the cost of living in Aus is high.

BillJones

I think that the best advice wouuld be for you to post a statement of affairs on the "debt free wannabee" section of the board, so that people can help you see where savings can be made in your outgoings.

Tixy

The earnings threshold for Australia is higher than for the UK to reflect the higher cost of living there (£16k in UK compared to £23k in Australia).

Agree with Bill that perhaps posting on the debt free wannabe section might be useful, although it may be harder for people to advise on potential savings, there are a few posters on the DFW section who live in Australia.

People may also be able to advise on the cheapest way to pay your loan (in terms of converting your money back to sterling).

whodathunkit

SmallPaws wrote: »

Hello everyone,

My partner and I live in Australia and will remain here for the forseeable future. We both have student loans, totalling around 50,000GBP between us. We informed the SLC that we had left the UK and were instructed to fill out Overseas Assessment Forms. We are both employed. The cost of living here in Perth is very high. If you convert the salaries we receive here into GBP we appear to be high earners but this is a different economy and is not actually the case. Money is pretty tight. Furthermore, for the overseas assessment the SLC look at your salary before tax, rather than after. As a result, they seem to think we are a lot more comfortably off than we are in reality! Our repayments have been calculated really highly and we just don't know how we are going to afford them. I have managed to clean out my savings paying mine off for the year but my partner's is a lot higher (spent more time at uni doing Masters) and we are currently figuring out what we can sell. It is all pretty unsettling particularly as we are out here without any family support system and money worries aren't something that we need right now!

My question is firstly, does anyone have experience or heard anything anecdotal from others about paying off the loan when overseas? Secondly, what happens if we make regular payments but only pay what we can afford? What if we only paid half the amount?

I have called the SLC and received a vague and noncommital response and I received a letter telling me if I didn't pay x amount they would begin legal action. What can they do?

Thanks for reading. I am a bit clueless when it comes to financial stuff so sorry if this seems like a naive question!!

Overseas thresholds are adjusted for just this reason, although I don't understand your comment about your wife doing a Masters as student loans not applicable to post grad courses.

alexjonsson

Hi, I have been in this situation myself as I worked in Australia for over three years a couple of years back.

I never actually told SLC that I was working overseas, and they never chased me for payment - whether this is wrong or not is a different debate.

However, before leaving for Australia I had actually been registered self employed and hence was required to complete a self assessment form. On this form is a section for overseas income earned, and of course a box to tick if you were in receipt of a student loan.

Hence, the assessment would always determine that I owed x amount of SLC based on my earnings (both UK and Australian), and I'd have to pay it via the normal self assessment channel.

This approach didn't allow me to take advantage of the higher threshold for Australia, but it did allow me to save up over the year and make a lump sum payment at the end - instead of having to send money back on a monthly basis which costs money to do.

Also, one year I didn't have the cash for the tax bill (which was made entirely of student loan repayment), so I was able to set up a payment plan with HMRC. Not ideal, but it gave me a bit of leeway and essentially another 12 months to pay the student loan.

I know this doesn't help your current situation, but is it worth approaching the SLC to see if you can manage your student loan repayments via the self assessment route?

I lived in Perth and know all about the cost of living there. Unfortunately you are a victim of the strong Australian dollar, and the 23k threshold is nowhere near is high as it should be (IMO). I think it's just a case of sucking it up and realising that you owe the money and it has to be paid back one way or another.

alexjonsson

whodathunkit wrote: »

Overseas thresholds are adjusted for just this reason, although I don't understand your comment about your wife doing a Masters as student loans not applicable to post grad courses.

My understanding is that if you start a four year Master's course (for example Msci, Mgeol) it is counted. It's not the same as going back to to a dedicated taught or research masters. Perhaps that is what they have done.