ERUDIO student loans help

eroneo

anna2007 wrote: »

@ gardenia Your legal right to a 3 year deferment is set out in the Student Loan regs, Erudio can't change that. What they've done is confuse the requirement for disabled borrowers who want to apply for the 10 year repayment term if they're unfit for full-time work, to show they're unfit for work (letter from GP probably). The cynical among us might think that confusion's by design... there's no requirement for a disabled borrower applying for a 3 year deferment to show they're unfit for work, only to show income, same as a standard deferment.

My comment about the declaration on future income was more general, how can any borrower say with absolute certainty what their income will be in 3 months' time, never mind 3 years? I always thought it was daft for SLC to include in their declaration that income for the following 3 months wouldn't be above my declared income, because I never gained the ability to see into the future! It just seems ridiculous to me to ask someone to do the same, but 3 years forward.

With the CCA remediation, I remember you saying you'd never had arrears, why would there be any charges on your account, have you ever seen any added (separate from Erudio messing with the interest)? It's pretty clear from the amount of info on CCA remediation redacted from the S&P agreement that this whole issue is crucial to Erudio extracting profit. I've asked the ICO to issue a formal decision notice over the redactions, so it can then go to tribunal. They said it can take months for the IC's decision notice alone, so it's another waiting game...

Whilst I agree that predicting future income is a woolly criteria, I do not think Erudio are confused.

According to the regs(Sch2.(6)), a disabled borrower who is unfit for full-time work (but may be fit for part-time work)who either exceeds the deferment level or has volunteered to repay, repayments are spread over 120 months.

I have not seen anything to say Erudio have changed the above.

What they have done is change Sch2(11). Erudio are now applying a new, tougher test where the borrower must be unfit for any work whatsoever for at least 3 years to get 36 month deferment.

The original criteria makes no reference to fitness for work.

Please look on the final page of the statement to see the new criteria.

ESL have used language similar to other criteria ("unfit for work", etc) to blend in the new criteria without being noticed.

By the way, very well done for the FOI result!

gardenia101

eroneo wrote: »

Whilst I agree that predicting future income is a woolly criteria, I do not think Erudio are confused.

According to the regs(Sch2.(6)), a disabled borrower who is unfit for full-time work (but may be fit for part-time work)who either exceeds the deferment level or has volunteered to repay, repayments are spread over 120 months.

I have not seen anything to say Erudio have changed the above.

What they have done is change Sch2(11). Erudio are now applying a new, tougher test where the borrower must be unfit for any work whatsoever for at least 3 years to get 36 month deferment.

The original criteria makes no reference to fitness for work.

Please look on the final page of the statement to see the new criteria.

ESL have used language similar to other criteria ("unfit for work", etc) to blend in the new criteria without being noticed.

By the way, very well done for the FOI result!

I'd love to look at the wording on the new statement, but Erudio are unable to provide me with one. I have been putting it down to poor systems regarding large print, but am now wondering if they're deliberately not sending me a statement since they know I'll be unfairly affected by their attempt to change T&Cs?

Any other disabled customers had a statement yet?

anna2007

eroneo wrote: »

What they have done is change Sch2(11). Erudio are now applying a new, tougher test where the borrower must be unfit for any work whatsoever for at least 3 years to get 36 month deferment.

The original criteria makes no reference to fitness for work.

As much as they'd like to, Erudio can't change any part of the Regulations or t&c's. This is no different to the DD issue, their false claims over rights to credit searches/reporting, quoting the wrong Regs, etc, etc.

Although I agree Erudio aren't confused when they make these 'mistakes', they'll claim to be when caught out!

I've PM'd MSE's Helen to ask if they can take it up with Erudio and write an article setting out the correct position. If it gets resolved in this way, it saves individual borrowers having to fight to enforce their rights, and is more bad publicity for Erudio. If others could also contact MSE, hopefully they'll agree to take it up with Erudio.

It's probably worth letting the FCA know, by sending a quick email to consumer.queries@fca.org.uk

You don't have to be affected by the issue, as FCA won't look at individual cases, it's just to make them aware of Erudio's conduct and inability/refusal to correctly apply the terms/treat customers fairly.

eroneo

anna2007 wrote: »

As much as they'd like to, Erudio can't change any part of the Regulations or t&c's. This is no different to the DD issue, their false claims over rights to credit searches/reporting, quoting the wrong Regs, etc, etc.

Although I agree Erudio aren't confused when they make these 'mistakes', they'll claim to be when caught out!

I've PM'd MSE's Helen to ask if they can take it up with Erudio and write an article setting out the correct position. If it gets resolved in this way, it saves individual borrowers having to fight to enforce their rights, and is more bad publicity for Erudio. If others could also contact MSE, hopefully they'll agree to take it up with Erudio.

It's probably worth letting the FCA know, by sending a quick email to [EMAIL="consumer.queries@fca.org.uk"]consumer.queries@fca.org.uk[/EMAIL]

It's probably better to ask Helen to leave it for the moment. If MSE take it up with them, they will just weasel out and remove it.

If the change is left alone and one of us ends up in court we can prove in black and white the terms and conditions have been changed. Don't give them the chance to fix it because then it will be harder to prove wrongdoing.

There is no rush to do anything about it and better to keep up your sleeve. MSE can always challenge it later on.

I hope you follow my reasoning, but it is up to you.

Also, the FCA are a waste of time and better not to help them weasel for Erudio.

I posted it to help disabled borrowers challenge ESL individually if they get 36 month deferment turned down. But, it's better not to give ESL a way out.

anna2007

Have to disagree with that approach eroneo, as all that will happen is the borrower (if prepared to take it to court, many aren't) will be granted the 3 year deferment before a court decision is ever made. So Erudio will still weasel out of it, but the borrower will have a long and quite stressful process getting there.

Also disagree about not bothering with the FCA, if we don't make them aware of what's going on, it's a given that they won't intervene. Although it seems to take forever for Regulators to act, they do sometimes get there eventually. I was one of many consumers who bombarded Ofcom a couple of years ago about EE/T-Mobile, which ended in a £1m fine for EE:

http://media.ofcom.org.uk/news/2015/ofcom-fines-EE/

So we can't assume FCA are doing nothing. There's also the grey area over Erudio's authorisation. It certainly can't hurt to keep FCA informed of Erudio's conduct by firing off a quick email.

fermi

eroneo wrote: »

Please look on the final page of the statement to see the new criteria.

Are they stating or relying on that anywhere else apart from the annual statements?

Sorry, I've not had time to go through everything to check.

GinOClock

There is an update on the BIS DAF FOI:

https://www.whatdotheyknow.com/request/erudio_student_loans_and_dafs#incoming-712272

It seems BIS have not objected to any draft DAF whatsoever:

Agreement was given for each of these forms on the basis that Erudio Student Loans Ltd reasonably believed that the language in the documents was factually correct and accurately represented the position in respect of borrowers' legal obligations and the creditor's legal rights.

So, BIS just took Erudio's word for it? Weren't they, at the very least, caught out in the language used in describing whether a setting a direct debit during a period of deferment was a mandatory part of the terms and conditions?

eroneo

I lost faith in the FCA after watching this:

https://www.youtube.com/watch?v=79k1zJrd1-c

I would be astonished if the FCA took any action.

fermi

Interesting re the equivalent loans owned by Thesis Servicing.

https://www.moodys.com/research/Moodys-downgrades-UK-student-loan-ABS-deal-THESIS-class-A3--PR_336806

Rating Action: Moody's downgrades UK student loan ABS deal THESIS class A3 and A4 notes


Global Credit Research - 19 Oct 2015

London, 19 October 2015 -- Moody's Investors Service has today downgraded The Higher Education Securitised Investments Series No. 1 PLC's (THESIS) class A3 and A4 notes' ratings to B3 (sf) from Ba2 (sf), on review for downgrade. At the same time, Moody's affirmed the accrual facility notes' A3 (sf) rating. THESIS is a UK asset-backed securities (ABS) transaction backed by student loans.

Today's downgrade reflect the worse-than-expected performance of the collateral backing the affected notes.

The transaction is a static cash securitisation of student loans extended to obligors in the UK, which closed in March 1998. The loans were originated by The Student Loan Company ("SLC"), a UK public sector organisation established to provide loans and grants to over one million students annually across the UK.

Please refer to the end of the Ratings Rationale section for a list of affected ratings.

RATINGS RATIONALE

Today's downgrade reflect the worse-than-expected performance of the collateral backing the affected notes, which resulted in a decrease in the class A3 and A4 notes' credit enhancement. Moody's has affirmed the accrual facility notes' rating, as the tranche will benefit from an indemnity on the loans, given its seniority in the structure.

WORSE THAN EXPECTED COLLATERAL PERFORMANCE

Defaulted loans (which overdue for more than 24 months) have increased by GBP4.5 million between Aug 2014 and Aug 2015. The rise in defaulted loans has resulted in an increase in the principal deficiency ledger to GBP58.5 million from GBP55.2 million, and reduced the class A3 and A4 notes' credit enhancement to 5.47% from 7% over the same period.

Moody's considers the performance deterioration to be partially linked to the fact that a higher portion of loans exited deferment in April 2015 due to a lower deferment threshold (which is -7.1% lower since April 2014). A borrower may be entitled to defer loan payments if their income is lower than the deferment threshold, which is equal to 85% of the average full-time earnings in the UK.

PROJECTION OF FUTURE LOSSES

Moody's projected future default on the outstanding portfolio by assessing the proportion of loans leaving deferment each year. In its analysis, the rating agency assumed that the future deferment threshold would either stay stable or increase with the average monthly salary in the UK.

Out of the loans that left deferment, Moody's estimated the amount of loans that would benefit from the UK government's cancelation indemnity, which covers loans outstanding for more than 25 years. For the remaining part of the pool which is not covered by this indemnity, Moody's assumed a default rate of 14% on loans in repayment without arrears and 30% on loans in repayment with arrears with a 30% recovery rate for both loan type.

Loans that continue to be in deferment and satisfy the aforementioned criteria will benefit from the indemnity. As such, these loans are unlikely to result in incremental losses to the transaction, in Moody's view.

As a result of Moody's analysis, and given the class A3 and A4 notes' current 5.4% credit enhancement, Moody's has downgraded the ratings on these tranches to B3 (sf) from Ba2 (sf), on review for downgrade.

Moody's affirmed the A3 (sf) rating of the accrual facility notes, the most senior tranche in the structure, given the current 30% credit enhancement level and the fact that the notes will benefit from the indemnity on the loans that will continue to be deferred and on the repaying ones meeting the criteria of age.

anna2007

fermi wrote: »

Interesting re the equivalent loans owned by Thesis Servicing.

https://www.moodys.com/research/Moodys-downgrades-UK-student-loan-ABS-deal-THESIS-class-A3--PR_336806

It's probably the taxpayer who loses out (again) when our Government makes guarantees/pays subsidies to offset the "worse-than-expected performance"!