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ERUDIO student loans help

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  • cluelessfish
    cluelessfish Posts: 46 Forumite
    Ninth Anniversary Combo Breaker
    edited 25 August 2014 at 11:17AM
    having read the last few posts it looks like several different things are getting tied together. While the following all cover the same topic they are not the same.

    before student loans scheme started their was lots of arguing about how much it would cost, for both the government and students.

    A deferment threshold was included but left open to adjustment by the government.

    In order to sell some of the loans in 1998 this adjustment was stopped and the 85% figure became the method for calculating deferment threshold.
  • anna2007
    anna2007 Posts: 1,182 Forumite
    In fact, if my maths is correct, the deferment threshold increased in each year from 1990 by +9.33% in 1991-2, +7.11% in 1992-3 , then +3.1%, +4.38%, +4.19%, +3.87%, and so on, with some quite large increases (+6.58% in 202-03, +6.53% in 2004-05). From 1990 to 1995-6 the threshold increased by 32% in five years. There was no fall until -2.22% in 210-11. Until the -7.12% drop just announced, the average change each year over 23 years was +4.07%. I am not a statistician, but will explore more whether these figures reflect increased earnings or indicate the figure is being adjusted for another reason.
    I do know that, when I worked in the public sector from 1997, the annual pay awards negotiated with the Unions were very generous, 5% wasn't unusual. Add to that another 3% with the annual incremental pay scales that were in place, and it fits with the increases you've calculated in deferment levels.

    Changed days now - when I left in 2008, I think the award was around 2-3%, and has been frozen in some years since. There were also new national (in Scotland anyway) pay scales negotiated around that time with the Unions through Single Status, which will have restricted public sector pay even further.

    Re the -2.22% fall in 2010/11 that you mention, I read reports from the ONS and Institute of Fiscal Studies that this was mainly due to the introduction of the 50% tax rate in April 2010, which resulted in many higher rate tax payers shifting income from 2010/11 to the previous tax year to avoid the higher tax. If you look at the deferment level in 2009/10, it was unusually high compared to the previous year, so seems to support this explanation.

    The official ONS figure for earnings growth which applies to the latest deferment threshold is +0.7% for April 2014 - so how they managed to arrive at a 7% reduction in the threshold is anyone's guess - my bets are currently on employee pension contributions, which I don't think are included in the ONS average earnings figure. These would have to be factored in again for gross pay, but could have been conveniently omitted from this year's calculation?
  • anna2007
    anna2007 Posts: 1,182 Forumite
    having read the last few posts it looks like several different things are getting tied together. While the following all cover the same topic they are not the same.

    before student loans scheme started their was lots of arguing about how much it would cost, for both the government and students.

    A deferment threshold was included but left open to adjustment by the government.

    In order to sell some of the loans this adjustment was stopped and the 85% figure became the method for calculating deferment threshold.
    But BIS has confirmed in the press that there's been no change in the calculation, which means that adjustment (however it is done) would still need to be made? No adjustment = change in calculation, surely?
  • erudioed
    erudioed Posts: 682 Forumite
    Part of the Furniture 500 Posts Name Dropper
    edited 25 August 2014 at 12:43PM
    Until BIS explain/present the maths used to make the calculation we will all be guessing. I think there is enough doubt on the forums by even those delving deeply into what we have been told about the calculation (well the £2000/7% figure) to need it properly explained. Martin Lewis implied he wants to know cause it feels a bit odd that BIS wouldnt explain the details, i want to know cause im suspicious of everything around this issue until explained otherwise and i think we all want to know because it affects us all, especially those close to the threshold.
    It is fair to ask for an explanation considering the figure seems difficult to explain by anyone looking closely at it yet. The best way to stamp out suspicion is openness, and openness is a severely lacking in everything around this loan sale. We may all be seen as a bunch of naggers but that is only because we have good reason to be, so unless BIS stop hiding what it is they dont want to reveal (and it is something slightly larger than what most of our own personal issues are, mine included) this suspicion will continue because when something smells rotten, especially to 300,000 odd people who have graduated from university across a wide range of specialties, then there is a good chance it is rotten and that will taint every subsequent announcement/change that comes from a) BIS and b) anything with the name Erudio attached. And it isnt just because our loans have been sold and all things Erudio have started to squeeze us more than SLC did.
  • anna2007 wrote: »
    But BIS has confirmed in the press that there's been no change in the calculation, which means that adjustment (however it is done) would still need to be made? No adjustment = change in calculation, surely?

    When I said adjustment I meant a change in the calculation.

    Was trying to break Mr McGuffin post into smaller chunks
  • anna2007
    anna2007 Posts: 1,182 Forumite
    edited 25 August 2014 at 2:11PM
    One more comment (ok, a few comments) on the calculation, then I promise to leave it alone until we get something back from BIS!

    If we assume that BIS has told porkies about no change to the calculation, and that Mr McGuffin's observations are correct (and they seem entirely plausible), that there has always been a discretionary adjustment by Government to fit in with their policies and the whole ethos of the student loans system, it seems that adjustment has always been favourable for the borrower, i.e. set at a level above the 85% of average earnings.

    If the moment our loans (a public asset) are sold to the Government's buddies at Arrow Global/CarVal at a heavily knocked down price, BIS decide to remove that discretionary adjustment to the detriment of borrowers (and benefit of their private sector pals) - the Government surely has to be held accountable for such a decision?? It reeks of scandal.

    This could be a coincidence, but when I tried to figure out the drop in deferment a while ago, I worked out the AWE to be around £546 (based on the male average wage - gender pay gap - and adjusted to remove N. Ireland earnings - G.B, not U.K.). Based on that, annual earnings would be £28,392, add 7% for pension contributions (not giving up on that one!) is £30,379. Take 85% of that, you've got £25,822 - not too far off the new deferment level.

    If there has been a discretionary adjustment removed, and you put the morals and ethics of that to one side for a moment, then I suppose BIS has acted in accordance with the Regulations. There's been talk of the deferment level continuing to fall in future years, but it can't fall any lower than 85% of average earnings - if it did, then BIS would be breaking the law, which I'm sure a Ministerial Department would never do...
  • anna2007 wrote: »
    ...This could be a coincidence, but when I tried to figure out the drop in deferment a while ago, I worked out the AWE to be around £546 (based on the male average wage - gender pay gap - and adjusted to remove N. Ireland earnings - G.B, not U.K.). Based on that, annual earnings would be £28,392, add 7% for pension contributions (not giving up on that one!) is £30,379. Take 85% of that, you've got £25,822 - not too far off the new deferment level.

    If there has been a discretionary adjustment removed, and you put the morals and ethics of that to one side for a moment, then I suppose BIS has acted in accordance with the Regulations. There's been talk of the deferment level continuing to fall in future years, but it can't fall any lower than 85% of average earnings - if it did, then BIS would be breaking the law, which I'm sure a Ministerial Department would never do...

    So do the deferment calculations only take into account earned income from paid employment? Probably over simplifying it with that question, but wondering if the average wage calculation that is used to set the deferment threshold includes benefits/child maintenance etc. or not.

    If not, then it doesn't seem fair (to me) that income not used in this deferment calculation can then be counted when we apply for deferment.

    Or have I got the wrong end of the stick as usual....

    Having spent many hours hunting for paperwork, redacting bank statements etc. I'm happy that I'm under the threshold even if they include child benefits/tax credits & child maintenance, so I can't see how they'll be able to refuse me deferment (but I'm sure they'll try).

    Sending off my letter & proof tomorrow so will keep you updated.
    And I find that looking back at you gives a better view, a better view...
  • anna2007
    anna2007 Posts: 1,182 Forumite
    So do the deferment calculations only take into account earned income from paid employment? Probably over simplifying it with that question, but wondering if the average wage calculation that is used to set the deferment threshold includes benefits/child maintenance etc. or not.

    If not, then it doesn't seem fair (to me) that income not used in this deferment calculation can then be counted when we apply for deferment.

    Or have I got the wrong end of the stick as usual....

    Having spent many hours hunting for paperwork, redacting bank statements etc. I'm happy that I'm under the threshold even if they include child benefits/tax credits & child maintenance, so I can't see how they'll be able to refuse me deferment (but I'm sure they'll try).

    Sending off my letter & proof tomorrow so will keep you updated.
    Take a copy of your letter and evidence if you can, and remember to send it recorded delivery... Erudio are notorious for 'misplacing' documents. If you can scan it all and email it to them too, even better, tell them it's an electronic copy of the paper application they received on xx/xx/xx, I also emailed the RM proof of delivery. It's also an idea to write your Erudio customer number on every bit of paper you send - all of this might seem like overkill, but it gives Erudio very little scope for losing your paperwork :)

    I shouldn't be talking about this anymore, I promised, but the deferment level per the regs is 85% of the Government's 'estimate' of average earnings for all full-time employees in Great Britain, for the following January, based on the ONS figures of Average Weekly Earnings and earnings growth.

    I agree with you that it's extremely unfair if benefits, child maintenance, etc are included in the assessment of income for deferment applications, but not factored into the deferment threshold - these people would effectively be penalised for being in receipt of e.g. means-tested benefits, or even for having children! I'm sure the Government and SLC would be aware of that, and is another reason I think it's more likely the SLC disregarded this type of income (assuming it's not factored into the deferment level).
  • anna2007 wrote: »
    Take a copy of your letter and evidence if you can, and remember to send it recorded delivery... Erudio are notorious for 'misplacing' documents. If you can scan it all and email it to them too, even better, tell them it's an electronic copy of the paper application they received on xx/xx/xx, I also emailed the RM proof of delivery. It's also an idea to write your Erudio customer number on every bit of paper you send - all of this might seem like overkill, but it gives Erudio very little scope for losing your paperwork :)

    I shouldn't be talking about this anymore, I promised, but the deferment level per the regs is 85% of the Government's 'estimate' of average earnings for all full-time employees in Great Britain, for the following January, based on the ONS figures of Average Weekly Earnings and earnings growth.

    I agree with you that it's extremely unfair if benefits, child maintenance, etc are included in the assessment of income for deferment applications, but not factored into the deferment threshold - these people would effectively be penalised for being in receipt of e.g. means-tested benefits, or even for having children! I'm sure the Government and SLC would be aware of that, and is another reason I think it's more likely the SLC disregarded this type of income (assuming it's not factored into the deferment level).

    Yes that does seem really unfair :mad:

    Good point about the Erudio number - I now have to hand write it onto lots of sheets of paper as I'd forgotten, so thanks. I'm guessing its the 16 digit number that appears on my letter with no clarification of what it means?

    No scanner at home, but will investigate if the stationers in town can scan it for me. Another good idea, thanks. I was going to send it by special delivery so I know they'll receive it by 27/08. which I'll follow up with an email requesting proof of receipt.
    And I find that looking back at you gives a better view, a better view...
  • anna2007
    anna2007 Posts: 1,182 Forumite
    Received a response to my FOI request to SLC for information leaflets, promotional material, etc, which refers me to their disclosure log on their website (someone put the same request in before me). There are a few leaflets attached, not had a proper look, but doesn't look like anything earlier than 1998/99. It's under June 2014, Request reference: 104-14, if link doesn't take you straight there:


    http://www.slc.co.uk/freedom-of-information/freedom-of-information-disclosures.aspx#June
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