ERUDIO student loans help

Mr_McGuffin

erudioed wrote: »

heres another FOI request answer today. This one reporting info to CRAs. It is a rather half hearted reply pointing towards Erudio's website and repeating the standard reply... its upto Erudio but has to be within the original T&Cs (without offering the necessary meaning of that last part, i.e. being drawn into saying if it is or isnt in the T&Cs):
https://www.whatdotheyknow.com/request/224180/response/557494/attach/4/FOI%202014%2017916%20Mr%20K%20MacDonald%20for%20clearance%20v2.pdf

I'm interested by the answer to Q1. Copies of the 1998 and 1999 sale agreements between the Govt and Finance for Higher Education in 1998 and Honours Trustee in 1999 are public documents, and are in the House of Commons Library (Dep/36271 and Dep 99/828), with confidential information removed.

I have seen the first of these though not the second, if there is much difference. This originally specified that the purchasers must follow the recovery procedures of the SLC. It also specified additional recovery measures when loans were in arrears for more than 24 months. This could all be varied with the consent of the Govt.

This FOI reply indicates recovery procedures for Honours and Thesis must no longer be specified in detail by the sale agreements. For some time after they were sold the circumstances in which borrowers would be reported to CRAs were fully known by the relevant Govt Dept (the DfEE in 98/99, before BIS existed), as it had in effect specified this in the sale agreement for the loans. This must have changed later then, perhaps after 2004 and the end of full SLC management of the loans?

In the original 1998 contract any circumstances for reporting to CRAs would surely fall within part of the recovery procedures of the SLC. These are not detailed in the publicly available agreement, but are referred to. If the purchasers of the first two tranches of loans remained bound by anything like the original conditions then it would also be a matter for the relevant Govt department what information would be reported to CRAs and when. The Govt would have decided and agreed this with the purchasers of the loans to allow for variation from SLC procedures.

These loans were sold in '98 and '99 with certain permissions, when and how the permissions were varied, and to what, would be known to the Government, because it had to agree to it. I guess this FOI response means these sale agreements from 1998 and '99 have completely changed and no recovery procedures are specified. Otherwise BIS would know about them.

BIS sold the loans to Erudio without the kind of borrower protections provided in the 1998 and '99 sales. It sounds like there are also no longer any specified procedures for the Thesis and Honours loans either, other than that deferment should still be handled by the SLC, for now. Because if there were, who other than BIS would hold information on this? And they are saying here that they do not.

BIS is now saying that these loans are nothing to do with it, and are purely a matter for the companies it sold them to. In fact BIS/ Shareholder Executive is entirely responsible for the terms of the sale of this public asset to Erudio, which public money was used to achieve. They are responsible for the situation we are in. I do not understand how it can justify withholding information about what it agreed and allowed for the future management of loans originally made with public money, by a state vehicle, to British citizens, to achieve public policy objectives, under terms agreed by Parliament. It must have discussed all details of the loans and their management as part of the negotiations for the sale. Who does BIS work for? Who does it represent?

Incidentally, back in 1990, when the proposed rules and procedures of the SLC were first presented to MPs, reporting to CRAs was only proposed as the penultimate stage in 'sanctions' for misrepresentation by borrowers, prior to proceedings for fraud.

anna2007

erudioed wrote: »

heres another FOI request answer today. This one reporting info to CRAs. It is a rather half hearted reply pointing towards Erudio's website and repeating the standard reply... its upto Erudio but has to be within the original T&Cs (without offering the necessary meaning of that last part, i.e. being drawn into saying if it is or isnt in the T&Cs):
https://www.whatdotheyknow.com/request/224180/response/557494/attach/4/FOI%202014%2017916%20Mr%20K%20MacDonald%20for%20clearance%20v2.pdf

The reply to Q3, which refers to responsible lending and borrowing, is interesting too, where they say:"MS loans are no longer issued. It is a matter for the owners of the MS loan portfolios to decide what information is considered relevant and appropriate to report, within the terms and conditions of borrowers’ loan credit agreements and observing all regulatory requirements and industry guidance".

I've had a look for the FCA's guidance on responsible lending, and the one reference I can find in their handbook (FCA / MCOB / 11 / 6) relates to mortgages only (issued April 2014, when the tighter rules came in on mortgage lending and borrowing).

In Erudio's response to my complaint, their justification for disclosing info to the CRA's is:

"In the UK, it is generally agreed that reporting relevant and appropriate levels of information about credit agreements and how they are being paid is an important part of the process required to support responsible lending and borrowing".

No reference to the specific "regulatory requirements and industry guidance". Who has told Erudio that they're required to report our data (because it's not the FCA)?

Also, what I've seen on responsible lending refers to the point at which the agreement is made, i.e. a lender giving proper consideration to the borrower's ability to repay, before providing credit... a bit late for student loans issued 20 years ago by the Government, which is why I think BIS's comment that "MS loans are no longer issued" might be important.

There's a blog (more of a plug of the services they can offer to promote responsible lending) by Erudio's Experian buddies here:

http://www.experian.co.uk/blogs/latest-thinking/2013/05/what-is-responsible-lending/

And a FOS technical note on unaffordable lending (at the time it was taken out by the borrower):

http://www.financial-ombudsman.org.uk/publications/technical_notes/financial-hardship-unaffordable-lending.htm

If 'promoting responsible lending and borrowing' is Erudio's only justification for reporting our deferred loans, I think we need to be asking in our FOS complaints exactly what regulatory rules Erudio are abiding by and the industry guidance they are following - "it is generally agreed" seems a little bit vague.

Mr_McGuffin

Q3 is a good question.

BIS does not want to specify what is 'generally agreed' to be 'relevant and appropriate'. This was written by a Government Minister, but BIS says the owners of the loans will decide what it means.

anna2007

The student loans booklets arrived from BIS today - I'm about half way through reading them, starting with the earliest, but so far there's nothing particularly helpful.

The loans are described in the earliest booklets as "Government-funded loans to help meet your day to day living costs". The purpose and source of the loans obviously set them apart from your usual commercial borrowing, and still thinking of the responsible lending thing - the loans were optional, but you were guaranteed to get one if you met the eligibility criteria (residence requirement, eligible course, etc) - responsible lending has nothing to do with it.

Was it erictheking who mentioned the legality (under the CCA?) of financially gaining from minors who were sold student loans? The booklets mention not being eligible for further loans if "you have previously received a loan when a minor and have refused a valid request to ratify that loan on reaching the age of 18". "Ratify" is defined as "if you ratify a loan on reaching the age of 18, you agree that the contract for the loan is valid. In effect, you promise to pay back the loan in due course". Not sure how that sits with the 'financial gain' issue?

Most of what I've read so far is summarising what we already know from the regulations, and I'm guessing the later ones are more of the same, but if anything different crops up, will post it here.

ericctheking

Yes, I mentioned about the legality of promoting and selling loans to minors.
Basically. the loans were miss sold.
Current IR loans will probably go the same way.
Hate to say it but Martin needs to be very careful with his advice to prosective students, and we are talking about a lot more money with them. It looks an attractive loan but in the future you will be stitched up should be the advice, Learn a trade, don't go to University!

vicky_r_2

Hi,
Totally new to this thread, but I have quickly scanned what has been written about Erudio and haven't come across what I am currently experiencing.

Received a letter from SLC/Erudio in March 2014 to say that my student loan has been sold/bought by them, then nothing.

Due to defer during the summer months, but uncertain as to when. SLC was always on the ball with sending out deferment forms & letting you know when you hadn't responded/not sent the correct info etc etc.

I was aware that I had not received deferment forms, but currently have health issues, so not my main concern atm.

Yesterday I received a letter from Erudio which was my statement of account, but with it there was information stating that I was in arrears, and what to do when you get into debt.

A little confused, jumped straight on the telephone asking what the letter meant, and where was my deferment forms, to which the whippersnapper could only say, 'well the forms were sent to you on 24th May 2014, and you should have received them'

I asked to speak to a supervisor, which he duly did, who was able to help a little more, but the internet & forums like this has been the biggest help!

My questions/concerns are:-

Erudio, in purchasing all the details from SLC appears to have lost my bank details (still with the same bank I was when I was a student), do I have to change my bank as my personal security has been compromised?

Why have Erudio not informed me that payments were due to start in mid July, which would have prompted me to sort out a deferment.

Why have Erudio not informed me when they were unable to honour my DD in July, and again in August, and waited until my account was 2 months in arrears? - In the past I have issues with mortgage/utility companies etc, and as soon as I didn't make a payment for whatever reason, they are sending me a letter to tell me a payment hasn't been made.
I did ask Erudio for their policy on notifying people on missed/late payments, but after reading the majority of the 87 pages on this thread, I don't hold out much hope that they do have a policy.

I am now not going to wait for the defer forms, and use the template on this thread (thanks guys), and keep everything crossed I can get a deferment, which will be back dated 3 months.

Pluthero

@Vicky r

Be prepared for a battle if you are not going to use Erudio's form. Although the fact they have not sent you one and were unhelpful when you phoned them about it could work in your favour. Document all your dealings with Erudio, use recorded mail and don't bother phoning them. Erudio do have a POLICY: To Make as much money as possible

Good luck

anna2007

@vicky_r By template, do you mean the letter? It's just that no-one's been deferred without using Erudio's deferment form (that's being fought by others at FOS at the moment), so if you use the template letter, you'll only end up with further arrears. There's a blank form on page 71 of this thread, I'd suggest getting that in quick, remove the FPN and only fill out the details you're happy to give, you'll need your customer reference number from Erudio if you don't have it.

Erudio seem sure of when your deferment application pack was sent, however you should have received details of your repayment schedule before deferment ended, arrears notices, etc - legally they have to provide that and can't reasonably claim it's all gone missing in the post. I'd put in a formal complaint in at the same time as your form, there's info on the default process on Erudio's website:

http://www.erudiostudentloans.co.uk/faqs/default.htm

erudioed

yes, i concur. An even simpler answer is that Capita who controls the customer contact side are crap and shocking historically. Coupled with the fact that Arrow Global and all interested parties are not overly concerned if we default, so we have to unfortunately be ready before the time comes to make sure we have everything needed to defer with the most ease possible.
Unless we all complain to first Erudio, and then the FOS, nothing will be changing for the next 10 or so years, other than the nature of the fights that will evolve over time.
Welcome to this rather unfortunate club of 200,000 or so. If only everyone was coming to the forums, we would have real power.

GirlGeek

I assume everyone here has posted some info about this 'situation' on their social media feeds? I posted a couple of times warning people what's going on, at least a couple of my friends hadn't a clue there was a problem because their deferment isn't due until early new year.

This would add to our numbers as Erudioed is suggesting.