ERUDIO student loans help

anna2007

I have 3 loans (taken out 1990-92) transferred to Erudio, my deferment period comes to an end in around 4 weeks' time, and I've had some restless nights trying to figure out how best to approach the application. I've adapted the template letter from the forum, and was initially going to use this rather than the form, and refuse to set up the DD, but have had a rethink.

Erudio are well aware that there is a time limit on recovering all deferred loans. I remember they were phased in from my first year in 1990, so unless you qualify for cancellation due to your age, the first tranche of loans can be cancelled in 2017, with the last ones due for cancellation from 2023.

According to here: https://www.gov.uk/government/news/sale-of-mortgage-style-student-loan-book-completed

"Of the loans sold, approximately 46% are earning below the repayment threshold; 14% of borrowers are still repaying and 40% are not repaying their loans in accordance with their terms".

From Erudio's perspective, the repayers are easy money, and the defaulters have lost their right to have their debt cancelled, so can be hounded for repayment to their graves. But with the majority of the loans sold being deferred, it's obviously in Erudio's best interests to maximise their financial gain by turning genuine deferrers into defaulters. From what I've read on MSE and other forums about the way their handling deferment applications, I'm more convinced than ever that this is their intention. They'll use scare tactics to convert some deferrers into repayers, but they'll also use every underhand tactic they know of to turn you into a defaulter (and they seem to be very good at what they do).

I'm not scared of their tactics (definitely worried though), but I'm going to be very careful not to trip up and give them a reason to say I've defaulted. So I've decided to do it by the book and give Erudio what they've asked for (except consent for passing my loan details to the CRAs). However, it's a two-way street and I believe Erudio are already tripping up and breaking terms of the agreement and the law, going by the experiences of others on the forum. I'd urge everyone who is having issues with Erudio to make a formal complaint to them and pursue it with the FOS if need be - it's a free service for you but costs Erudio a good few hundred quid in arbitration costs! There's a useful MSE article on complaining to the FOS here:

http://www.moneysavingexpert.com/reclaim/fight-back-fos
The DD issue worries me- I'd be extremely wary if Erudio verbally told me there's no requirement to have one set up, as IMO it's a bit of a grey area and I can easily see them using it to claim you've broken a term of the agreement. In the end, I decided to set up the DD, and if they take a payment before granting deferment, it's just more ammo for a claim to the FOS.

Case

Recently informed of the gvmt sell off of my loans from 1993 - 1997 (not happy). Finally receive deferment forms requiring substantially more info, but, I give everything they ask for. About 6 weeks later I received another letter stating that they want more information including bank statements for the last three months. I call them on the 0845 number and am left waiting 10 minutes before I get to speak to somebody. I ask him about this and am put on hold for another ten minutes. He then informs me that as my wife had written a letter explaining that as I was out of work she was supporting me then she had to provide her bank statements too. Can this be legal? I didn't even know my wife when I took out the loans. I have managed to find info on the legislation.gov.uk website which states that they can only ask for the previous months' bank statement. Does this still hold true?

rizla_king

It doesn't actually say that.

It says

9. Each year the lender will tell the borrower the new deferment level for the period between 1st September and the following 31st August. The borrower can defer making repayments of the loan if—

(a)the lender has not already asked him to repay the loan in full, and

(b)he can show—

(i)that his gross income for the relevant month is not more than the deferment level, and

(ii)if the lender asks, that his gross average monthly income during the 3 months immediately following the relevant month will not or is unlikely to be more than the deferment level.

Now a fair way to establish that your income for the next 3 months may be to look at the previous 3 months. Wages or bank statement, or whatever proves it.

The legislation is vague to allow for various different ways of of establishing what is likely for the next 3 months.

Case

Does anyone know if the original regulations still apply concerning the provision of bank statements which as per the government website state:
(1) Subject to the provisions of this regulation, a borrower shall be entitled to defer making repayments of his loan if—

(a)he satisfies the loans administrator—

(i)that this gross income for the month preceding the month in which he applies for deferment does not exceed the product of £1,267 and the annual adjustment,

It quite clearly states that proof of gross income is only required for the month preceding deferment. I am being asked for three months worth of statements from both myself and my wife.

ericctheking

Case wrote: »

Does anyone know if the original regulations still apply concerning the provision of bank statements which as per the government website state:
(1) Subject to the provisions of this regulation, a borrower shall be entitled to defer making repayments of his loan if—

(a)he satisfies the loans administrator—

(i)that this gross income for the month preceding the month in which he applies for deferment does not exceed the product of £1,267 and the annual adjustment,

It quite clearly states that proof of gross income is only required for the month preceding deferment. I am being asked for three months worth of statements from both myself and my wife.

These are such open-ended terms. esp. (a)

erudio are reading it to mean they have the right to delve into people's financial circumstances. They can always say they are not satisfied. for example did you declare the pint your mate bought you in the pub!

Deferment is something that can only really be run by the government, it is too much of a conflict of interest to have erudio do it. It is an unfair contract, an unfair relationship!

Are there no ex-law students who know contract law????

There have never been loans like this. erudio should be forced to run it through the tax system like current loans, then it is fair because the tax people know who is over or under the threshold.

anna2007

Case wrote: »

Does anyone know if the original regulations still apply concerning the provision of bank statements which as per the government website state:
(1) Subject to the provisions of this regulation, a borrower shall be entitled to defer making repayments of his loan if—

(a)he satisfies the loans administrator—

(i)that this gross income for the month preceding the month in which he applies for deferment does not exceed the product of £1,267 and the annual adjustment,

It quite clearly states that proof of gross income is only required for the month preceding deferment. I am being asked for three months worth of statements from both myself and my wife.

You have to show proof of income for the month before you request deferment, but you also have to show that your income for the current month and the following 2 months is unlikely to be above the deferment level. I think the point Rizla was making is that one way to check the likelihood of this is to check your income for the previous 3 months, that's probably why Erudio have asked for your bank statements for the last 3 months.

Whether they're entitled to ask for details of your wife's income is another matter. I'm in a similar situation to you, in that my husband pays the bills, etc from his salary, so 'supports' me in that way, but the only income I have is Child Benefit and Child Tax Credit.

Since I gave up work a few years ago to be at home with my kids, the SLC asked for a letter each year from my hubby, confirming that he doesn't provide me with an income (I wish!), and SLC were satisfied with that. I was going to do the same for my application to Erudio, but your experience has me thinking I should just leave the letter out - as long as your spouse/partner doesn't pay any money over to you, that could be regarded as income, it's none of their business what my husband earns!!

Edit - just read that back - even if he did pay money over to me, surely it's still none of their business? You would provide your own bank statements, showing the payment coming in, but there's no justification that I can see for needing to see your partner's bank statements?

ptolomy

I finally spoke to a team leader at Erudio this afternoon (they didn't call back, I had to call and chase it up...) They are still maintaining that 100% of the rent from the flat I own jointly with my husband is classed as my income for the deferment. Even though HMRC don't view it that way and only 50% of the rent is taxed as mine. How can they make up their own definitions of gross income?
So now the only way to get the decision overturned is to write a formal letter of complaint.
I'm 6 months pregnant and have ME so am currently beyond !!!!ed off that all my energy for the last 2 days had gone on trying to sort out this stupid mess.

ericctheking

ptolomy wrote: »

I'm 6 months pregnant and have ME so am currently beyond !!!!ed off that all my energy for the last 2 days had gone on trying to sort out this stupid mess.

They really of scum of the highest order.

If I were you, I'd just keep my evidence that I'm under the threshold and not pay them a penny and let them take me to court if they want anything.

I don't now if that is the right approach or not?

ptolomy

Well it's a bit of a risk really, it seems from reading this thread that there's something in the T&Cs that says they can recall the whole loan if you get into arrears and obviously I don't want that to happen!
Even if they take the whole rent into account, I'm still only £5 over the limit so I asked about discretionary decisions on that. Surprise Surprise, they don't do those at all at Erudio.

ptolomy

I am being asked for three months worth of statements from both myself and my wife.

I used to be in this position where my only income came from a small amount my OH paid to me each month. SLC used to be happy with just a letter from him stating that and I always got my deferment approved. I don't see how they can have any legal right to see your wife's statements as her income can't be taken into account. I guess they might have a case for asking to see 3 months of your statements though just to confirm there is no other income.