ERUDIO student loans help

Mr_McGuffin

anna2007 wrote: »

This, from Martin Lewis' blog back in May

"Erudio says it wants to provide a bespoke system for each borrower. It believes many who deferred in the past shouldn’t have been deferred, they should have been given forbearance (ie, they are eligible to repay, but should in special circumstances be let off doing so) and it wants to look at each case individually".

I would have thought that if you previously had arrears with SLC and you brought the account up to date (and SLC then continued to grant deferment each year), then Erudio would have no grounds to refuse deferment?

However, it does make me wonder if it's connected to those retrospective arrears notices issued by Erudio "to correct a long-running error in correspondence" by the SLC, which seemed more than a little suspicious:

I personally think that only confirms Erudio will scour the records for any pretext to force as many people as possible into default and/or ‘bespoke’ payment plans. It seems to me the loan agreements give them precisely this opportunity in a number of different ways. The borrowers' only protection from a lousy and nonsensical law and agreement was that the SLC continued to run deferment according to its original programming.

The Labour Government knew that when they sold the earlier loans in 1998 and 99 with SLC retained deferment, and this Government knew it last year when they sold these as a business opportunity.

Mr_McGuffin

anna2007 wrote: »

I was looking at the SLC statistics again (copy here - a couple of points re defaulted loans:

This, on page 3:
"The increase in the amount written off during the financial year under "Other" was due to a one-off exercise to write off the outstanding balance of Mortgage Style loans that had become uncollectable".

The number of borrowers with accounts cancelled or written off under "Other" was 3,700 shown on page 7 - table 2(i). This was up from 800 in the previous year.

Also, table 2(ii) on page 8 shows the number of borrowers with no repayment schedule and >=£100 overdue as 61,400 (of 78,600 borrowers not paying in accordance with the terms of the loan agreement).

The note at page 12 re these borrowers states:
"Borrowers who have no current repayment schedule and an amount equal to or greater than £100 is still due. This group generally comprises those in a long term arrears position, many of whom are in litigation".

It seems unlikely that many of these borrowers are in litigation because SLC took them to court for defaulting, by all accounts SLC had a very low record of taking court action. So the majority of this 78% could represent the number of borrowers who are in litigation because they're claiming their debt has become statute barred?

These are the figures reported by SLC for financial year 2012/13. BIS quoted 40% of borrowers not paying in accordance with the terms in November 2013. It's possible that the vast majority of that 40% relate to these defaulters who are "in litigation", i.e. statute barred?


If the majority of that 40% quoted by BIS is unrecoverable, that leaves very little other than deferred loans for Erudio to chase...

Thanks for posting those stats, that’s great. I hadn’t seen them, they are very helpful, although I’m not capable of reading them into the Press Release figures with certainty.

There is one major point I do not understand. The numbers in table 1(i) seem to show 57% of the value of the loans in deferment. But why does the balance at the end of the year 2012-13 show the total amount outstanding as £687m, when we know that loans with a face value of £890m were sold? Where did the other £203m come from?

Where could there have been another £203m worth of loans not showing in these statistics? Does anyone know? Where could more ‘underperforming’ mortgage-style student loans be found?

In November 2013, five months after these stats were published, the NAO Report Student Loan Repayments (copyright National Audit Office 2013) said this:

p.20 ‘The SLC has faced challenges in collecting mortgage-style loans… While the SLC tried to contact borrowers with overdue repayments, BIS and the SLC decided not to take legal action to pursue debts where they judged there would be a low likelihood of recovery. Consequently, some borrowers neither made repayments nor acknowledged their debt within a six-year period; as a result, £127 million of outstanding loans may become ‘statute barred’, meaning that legally the borrower would no longer have to repay. BIS informed us that, to date, £2 million has become uncollectable because of this issue.’

That seems to match the £1.8m written off that you spotted, its nice to make some sense of that at least. It also seems to confirm as you say, that the SLC did not often take legal action, and ‘many of whom are in litigation’ is an exaggeration to say the least.

From the figures in table 2(ii) I reckon there a few different ways to get close to the Press Release figures, although of course it is not even certain these were the stats they used.

Also it is difficult to interpret this table, because the categories are very confusing, and the reader has to try to understand how much of this ‘borrower activity’ is the same person doing different things with each of their loans, and so the total of the breakdown adds up to 2,000 more than the total of ‘all borrowers’.

The Press Release said:

‘46% are earning below the repayment threshold;
14% of borrowers are still repaying
40% are not repaying their loans in accordance with their terms.’

I don’t think these figures should necessarily be read at face value. The numbers add up to 100 but it does not say they are not counting the same thing twice, or counting everything. For instance, could there be a borrower who has past arrears, who earns below the deferment threshold, but is now choosing to repay his loans, who would appear in more than one category?

The wording suggests a whole picture, but each category is separately defined, the list could carry on, describing more overlapping scenarios. That may not be so, but it is not clear it is not the case.

gardenia101

anna2007 wrote: »

I checked the 25 year rule a while ago, as that would apply to my loans before the age rule, and the regs say they're cancelled when the last agreement (not loan) has been outstanding for 25 years.

I take this to mean they qualify from the date the last agreement was made, as you owe the debt, with interest, from that time. That's not the same as the date repayments are due to start, which is usually delayed until the April after you finish your course.

This is important, as it makes quite a difference to the cancellation date, e.g. my last agreement was signed February 1993, but repayments weren't due to start until April 1994 - which means one less deferment application to Erudio!

What do others think?

I agree with you Anna about the agreement starting date point. It won't make any difference to me as I'll be 52 when the 25 years rule kicks in (& obviously hoping it'll have already been written off when I'm 50).

Mr_McGuffin wrote: »

This is very interesting. Quite right, BIS did not say 40% of the loans are in default.

The NAO Report of November 2013 said that ‘£127 million of outstanding loans may become ‘statute barred’’. That amount is 14.2% of the value of loans sold to Erudio, all of which were at least 13 years old. So this indicates 14.2% of the loans defaulted more than six years ago, and the oldest were 20 plus years old. That would leave a relatively much larger 25.8% to have defaulted in the last six years to add up to 40%. I think you are right, BIS are not saying 40% are in default, many of these may be in deferment.

If not, there was acceleration in the number of people defaulting in the previous six years, or an addition from elsewhere.

For various reasons, which are important and interesting, is it possible that the SLC allowed people to continue to defer even if technically they may have lost the right to? As I understand it, missing just one repayment over 20 years would be enough to technically breach the agreement.

The BIS Press Release also contained this ominous explanation:

‘Borrowers will continue to be able to defer repayment of their loan if they are under the income threshold provided they have previously met their obligations under the terms of the loan agreement, and similarly will still have their loans cancelled if they meet the criteria set out in legislation.’

Not just meet or continue to meet, but 'previously met'. This suggests to me that the purchaser may be able to retrospectively check whether borrowers ‘have previously met their obligations’ in deciding whether to defer future repayments, even if the SLC had previously allowed deferment.

I just hope Erudio haven't lost all the info that the SLC held on file - I have copies of a lot of my deferment paperwork, but not going back to cover all years.

I really don't like the sound of previously met, or the thought that we could have been incorrectly deferred

anna2007 wrote: »

This, from Martin Lewis' blog back in May

"Erudio says it wants to provide a bespoke system for each borrower. It believes many who deferred in the past shouldn’t have been deferred, they should have been given forbearance (ie, they are eligible to repay, but should in special circumstances be let off doing so) and it wants to look at each case individually".

http://blog.moneysavingexpert.com/2014/05/06/the-government-has-sold-people-out-over-erudio-student-loans/

I would have thought that if you previously had arrears with SLC and you brought the account up to date (and SLC then continued to grant deferment each year), then Erudio would have no grounds to refuse deferment?

However, it does make me wonder if it's connected to those retrospective arrears notices issued by Erudio "to correct a long-running error in correspondence" by the SLC, which seemed more than a little suspicious:

http://www.moneysavingexpert.com/news/loans/2014/07/hit-by-1990s-student-loans-blunder-check-for-erudio-packs-in-post

Anna, I agree with you again - even if SLC did incorrectly defer loans, that is hardly our fault if we've supplied the correct information, & I feel that nobody should be able to override the SLC's decisions (even if they we're wrong) now.

If these old loans are now going to be reclaimed on grounds of wrong deferment due to errors, I wonder if Erudio will be adjusting the interest accrued during these years?

I'm starting to think this is going to turn into an awful nightmare that will go on for ages - I just hope I'm wrong.

I'm afraid I also got a bit lost in all the stats info posted - will try & re-read it again & see if I can make it get into my brain.

anna2007

Mr_McGuffin wrote: »

There is one major point I do not understand. The numbers in table 1(i) seem to show that 57% of the value of the loans in deferment. But why does the balance at the end of the year 2012-13 show the total amount outstanding as £687m, when we know that loans with a face value of £890m were sold? Where did the other £203m come from??

Where could there be another £203m not showing in these statistics? Does anyone know? Where could more ‘underperforming’ mortgage-style student loans be found.

Laziness on my part Mr McGuffin - there are 4 separate tables for England, Wales, Scotland and N.I. - the link I provided and figures quoted are for the English table only

I'll have a look at the other 3 tables, although I'd have thought the proportion of defaulted/unrecoverable loans would be about the same (possibly higher in Scotland because of the shorter period for becoming statute barred?).

anna2007

gardenia101 wrote: »

Anna, I agree with you again - even if SLC did incorrectly defer loans, that is hardly our fault if we've supplied the correct information, & I feel that nobody should be able to override the SLC's decisions (even if they we're wrong) now.

If these old loans are now going to be reclaimed on grounds of wrong deferment due to errors, I wonder if Erudio will be adjusting the interest accrued during these years?

This from the 1998 regs:

"If the borrower does not make a repayment under the agreement when it is due, the lender may ask him to repay the loan in full immediately. The lender may do this even if the borrower’s obligation to make other repayments is currently deferred".

The wording of the BIS statement is worrying, but I don't think it's a case of loans being incorrectly deferred by SLC - my understanding of the above reg is that it allows the lender to call in the whole loan at the time the borrower goes into arrears, and it's discretionary. SLC chose not to do that (although I think they might have started to at some point, from posts I've read on the forums).

If the borrower clears the arrears and the account's up to date, I don't think SLC/Erudio can retrospectively call in the entire loan (but probably won't stop Erudio trying, e.g. I'm sure this is why Erudio left a one month gap when renewing deferment - to manipulate that regulation - one 'missed' repayment = call in entire loan). The wording of the regs re cancellation supports this, as there's no reference to previous arrears:

"The lender will cancel the borrower’s liability to repay the loan if the borrower—

(a) dies,

(b) is not behind on any repayments under any agreement for a student loan".

leigash

anna2007 wrote: »

leigash There are procedures Erudio legally have to follow - arrears notice, default notice, etc - there's a section on their website under FAQ

Remember you're not choosing to default though, if Erudio say you're in arrears, they've put you in that situation due to refusing to complete their form. All you're legally required to do is show Erudio your income's below the deferment threshold - the relevant parts of the legislation are in post# 1474, page 74.

If you're not prepared to take them to court, then I think it's a case of waiting to see how far Erudio take this - I can't remember anyone actually being sent a default notice for refusing to complete the form, probably because there's no legal basis for Erudio to refuse deferment on those grounds?

You could formally complain to Erudio - this puts your account on hold for up to 8 weeks (so they can't chase for arrears) then you can complain to the financial ombudsman, which is a free service.

I keep reading on the forums that FOS won't actually consider any legal disputes, which seems ridiculous as the whole point of an ombudsman is to resolve disputes before resorting to court action? When I complained to the FCA (I got the same response as Forever - it's being passed to the "supervisory team"), they advised to take my issues to the FOS (even though I said I was doing that already!), but I think you have to word the FOS complaint in terms of unfair treatment, rather than the legalities of it, hopefully then they will consider it.

Thanks for the info Anna, we have already made a complaint to Erudio and the FOS so guess we are going to be waiting to see what happens

Mr_McGuffin

anna2007 wrote: »

there are 4 separate tables for England, Wales, Scotland and N.I. - the link I provided and figures quoted are for the English table only ).

Aha, now i understand. That would make sense, and the proportions would remain consistent.

What I was driving at was if it was possible BIS bought back loans from the earlier tranches to consolidate into one block for sale, apparently not.

No laziness at all, thank you for finding the info and posting!

Former_MSE_Andrea

Hi everyone

Following a request last week we removed a direct email address. We asked the company for an alternative email address and to let us know how long it will take for people emailing it to get the help they're asking for.

Here's the response:

The correct email is: customerservice@erudiostudentloans.co.uk.

If a complaint cannot be resolved by the close of the next business day following its receipt, Erudio will send a written acknowledgement of the complaint within five working days of receipt and a full investigation will follow. After investigation, Erudio will endeavour to send a final response to the customer within eight weeks of receipt of the complaint in line with FCA complaint handling guidelines. If Erudio is unable to provide a final response within this time, Erudio will send an update to explain why they have been unable to respond fully. Erudio endeavours to respond to customer complaints as soon as is practically possible.

anna2007

Mr McGuffin - you may have seen this already, but some info here from the Honours Student Loans website, who bought the second tranche of loans:

http://www.honoursstudentloans.co.uk/Application/AboutHonours/Default.aspx

And deferment info here:

http://www.honoursstudentloans.co.uk/Application/FAQs/Default.aspx#I

From Thesis Servicing's website on deferment, who bought the first tranche:

http://www.thesis-servicing.co.uk/background/

I'm not sure how we would check whether deferred accounts transferred back to SLC (or perhaps never left the SLC in the first place)?

I'll have a look through some old threads, see if I can find anything.

ericctheking

anna2007 wrote: »

Mr McGuffin - you may have seen this already, but some info here from the Honours Student Loans website, who bought the second tranche of loans:

http://www.honoursstudentloans.co.uk/Application/AboutHonours/Default.aspx

And deferment info here:

http://www.honoursstudentloans.co.uk/Application/FAQs/Default.aspx#I

From Thesis Servicing's website on deferment, who bought the first tranche:

http://www.thesis-servicing.co.uk/background/

I'm not sure how we would check whether deferred accounts transferred back to SLC (or perhaps never left the SLC in the first place)?

I'll have a look through some old threads, see if I can find anything.

People with split accounts (eg. one years loan with Thesis and the others with Erudio) were defered by the SLC and using the SLC's forms this year, This was never made clear however.
Next year will be the same I assume.