MSE News: Student loan deferment threshold to fall: Q&A on why it's happening

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"The Government is lowering the earnings threshold for people with a pre-1998 mortgage style loan. We find out why... "...
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Student loan deferment threshold to fall: Q&A on why it's happening

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  • rizla_king
    rizla_king Posts: 2,895 Forumite
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    Still stinks to high heaven.
    Still rolling rolling rolling...... :) <
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  • kathrynha
    kathrynha Posts: 2,469 Forumite
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    That totally stinks, although sigh of relief from me that I am part time, because my full time wage is only £188 a year below it, so with child benefit I would be over the level, but working only 30 hours a week it drops me safely below the level. Phew!

    It is going to effect an awful lot of people though, especially with Erudio taking all benefits into account.

    If it goes down further I wonder, is changing child benefit to be paid to my husband instead of me allowed?
    Zebras rock
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    why does it stink


    the T&Cs are as agreed when the loans were taken out and everyone concerned has had over 16 years to plan for this day.


    anyone with these pre 1998 loans has had a better deal that subsequent students
  • Lungboy
    Lungboy Posts: 1,953 Forumite
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    It stinks because it's only the 2nd drop in deferment threshold in the history of these loans, and it's a huge drop too (~£2k), just after Erudio bought the loans. Plus, all of the publically available ONS data shows average wages going up every month, yet somehow the government data (which doesn't seem to be available to the public) shows a massive drop in average wage.

    I don't personally think there has been anything dodgy going on, but releasing the data on which their calculations have been based would really help.
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    Lungboy wrote: »
    It stinks because it's only the 2nd drop in deferment threshold in the history of these loans, and it's a huge drop too (~£2k), just after Erudio bought the loans. Plus, all of the publically available ONS data shows average wages going up every month, yet somehow the government data (which doesn't seem to be available to the public) shows a massive drop in average wage.

    I don't personally think there has been anything dodgy going on, but releasing the data on which their calculations have been based would really help.



    if indeed there has been a new unannounced way of calculating the threshold than that would seem unreasonable


    has anyone contacted their MP and asked for an explanation?
  • cluelessfish
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    or does BIS/ons think average earnings are going to fall by 7% surely that should m ake mainstream news on its own
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
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    edited 13 August 2014 at 12:07PM
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    or does BIS/ons think average earnings are going to fall by 7% surely that should m ake mainstream news on its own





    there does seem some evidence that most 'new' jobs are min wage


    so if employment continues to rise then that would mean that average wage would fall




    EDITED TO ADD


    ons measure the drop at 0.2% and also observe that pay in april 2013 was affected by the change in tax from 50% to 45% causing a artificial spike in incomes for the high earners which hasn't been repeated in april 2014
  • cluelessfish
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    granted more lower paid new jobs would bring the average down( also any reduction in massive bonuses ) but does 7% still not seem like a big drop.

    if ons gives 0.2% drop then why 7% drop in deferment threshold.

    also deferment threshold is gross income so shouldn't be affected by tax cuts/rises.

    ok typing that last bit i think i figured it out.

    deferment threshold is based gross income including certain benefits

    but government has been busy capping benefits and is switching to universal credit .
  • Lungboy
    Lungboy Posts: 1,953 Forumite
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    There was a piece on the radio news earlier about average wages falling in the latest figures. I guess the ONS and Government are expecting that trend to continue, giving ~5 months of average pay decreases. If the benefit thing is also true, then that could make a significant amount, although 7% still seems huge.
  • cluelessfish
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    i'm not sure about benefits either as i have never claimed any. Just going on what have seen on the news with regards to caps and universal credit.

    are the benefits that are included in deferment application named in the original t&c's? or is there just a catch all term used and a list of things excluded?
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