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

fermi

Dixi wrote: »

While browsing this thread I realised that I had not received a deferral pack for my student loans. After checking it would appear that they are now wiped out as I have reached the grand age of 60. After being disabled for several years, it is a worry that has been removed. I presume, at some point I will receive a letter of confirmation from Erudio?

dotties wrote: »

Hi all,
Just looking for some help and advice, my deferment ends at the beginning of October and suddenly I thought I usually get my forms in August so called the new Erudio Loan Company to ask if they had sent them. They hadn't and have now sent me a pack as of today. They mentioned the change in deferment amount which made me gulp, and head for here!
If I get my deferment forms in a timely manner from them then I guess I have time to get them back before the 31 August, but will they be considered then? Or am I going to be looking at repayment? My earnings have actually gone down since I deferred last year, and I am at threat of redundancy at the moment, but I am still over the new threshold. I can't quite get my head around a £2k drop.
Apologies if this is the wrong place but I've gone into a bit of a panic.

Keli80 wrote: »

erudio advised us today we would have to pay full loan within 3 months after end of deferment date not the 60 month period we thought. when we asked why this was the case they advised it had to do with the maturity date of the loan. could not get a straight answer on the ins and outs of this

Moved to the main Erudio thread where more likely to get replies.

https://forums.moneysavingexpert.com/discussion/4923210

ACL7

I just wanted to know if those with old style student loans recently sold to Erudio were aware the deferment threshold has been reduced by the BIS by two thousand pounds. This means many who have been deferring will be hit by monthly repayments from April onwards. In my case I will have to repay £180 a month. I personally can't afford this and will be hit by the creditors and debt collection for the first time in my life. I'm very concerned and just wanted to know if others were aware and how they planned to deal with the situation.

fermi

ACL7 wrote: »

I just wanted to know if those with old style student loans recently sold to Erudio were aware the deferment threshold has been reduced by the BIS by two thousand pounds. This means many who have been deferring will be hit by monthly repayments from April onwards. In my case I will have to repay £180 a month. I personally can't afford this and will be hit by the creditors and debt collection for the first time in my life. I'm very concerned and just wanted to know if others were aware and how they planned to deal with the situation.

Yes, see main site article.

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

Merged with main discussion thread on this.

ACL7

Thanks. The inevitable question I must ask then is what if I refuse to pay or only offer partial repayment? What would be the repercussions and would the repercussions be less severe if I offered to pay half of what is required per month?

Ed-1

ACL7 wrote: »

Thanks. The inevitable question I must ask then is what if I refuse to pay or only offer partial repayment? What would be the repercussions and would the repercussions be less severe if I offered to pay half of what is required per month?

Arrears, debt collectors (who own the loans now anyway!), mark on credit file. Erudio could choose to refuse to grant deferment in future years if you default and could potentially take legal action to recover the full balance through the courts as it's a breach of contract (your loan agreement) on your behalf.

fermi

If you refuse to pay then you would be in default of the loan and arrears would build up.

- Even if you defer again sometime later, arrears stay payable and can be chased.
- If you are in default on full payments, then depending on the terms of your agreement they could trash your credit files by recording a default or arrears.
- And if you fail to make full payments under the loan when you should, under the loan terms they could end the entire loan agreement and demand the complete loan payable back immediately in full.
- If the agreement is defaulted and terminated, they could take legal action against you to recover the loan.

If you offer to pay a reduced amount all the above still applies, but obviously arrears would build up slower. They may be less inclined to take action against you or hassle you, but you could still be chased and defaulted for it, with possible legal action.

You could find that they accept a lesser amount for some time, or they could play hardball straight away. Have heard of both happening.

ACL7

Thanks for the replies. It's a worrying situation. Is there any chance the BIS could review the limit before April or is that it and a certainty for at least one year?

1998

Is anyone going to have to start paying this year due to deferment rate drop?

fermi

Think I've seen one or two mentions on the Erudio main thread or elsewhere that people might.

rebeccak

I've just received my deferment papers and only just found out that the threshold has decreased and I now have to start repayments