Student loan sell off possibly back on!!!

ericctheking

I don't know if you are aware but the government was planning to sell off the student loan book but Vince Cable decided against it.

Some loans have already been sold off and it has been an unmitigated disaster for the ex-students involved.
Please see the Erudio student loans thread.

There is now evidence the sell off could be back on!!! (See below)

Interesting job advert for the student loans company.

http://appointments.thesundaytimes.c...-loans-company

Notice this little chestnut under job roles

"• Assist Government with the sales of loans"

and

" facilitate loan book sales for its stakeholders"

So prepare to be screwed post 98 ex students and current and future students!

Also it's a six figure package with a final salary pension!

So I guess the sell off is only "on hold"


Prepare to start dealing with debt collection agencies people even when you are fulfilling the terms and conditions of the loan.
Prepare to be pressured into paying more than you should!
Prepare to be pressured into paying even when under the thresholds.
Prepare to have money taken from your pay packet that you shouldn't be paying.
Prepare to be blackmailed into signing up to different terms and conditions.
Prepare to have a DCA trying to interprept the terms and conditions in different ways to the student finance.
Prepare to be lied to over and over again.

THINK VERY CAREFULLY ABOUT STUDENT LOANS!!!

Ed-1

ericctheking wrote: »

I don't know if you are aware but the government was planning to sell off the student loan book but Vince Cable decided against it.

Some loans have already been sold off and it has been an unmitigated disaster for the ex-students involved.
Please see the Erudio student loans thread.

There is now evidence the sell off could be back on!!! (See below)

Interesting job advert for the student loans company.

http://appointments.thesundaytimes.c...-loans-company

Notice this little chestnut under job roles

"• Assist Government with the sales of loans"

and

" facilitate loan book sales for its stakeholders"

So prepare to be screwed post 98 ex students and current and future students!

Also it's a six figure package with a final salary pension!

So I guess the sell off is only "on hold"


Prepare to start dealing with debt collection agencies people even when you are fulfilling the terms and conditions of the loan.
Prepare to be pressured into paying more than you should!
Prepare to be pressured into paying even when under the thresholds.
Prepare to have money taken from your pay packet that you shouldn't be paying.
Prepare to be blackmailed into signing up to different terms and conditions.
Prepare to have a DCA trying to interprept the terms and conditions in different ways to the student finance.
Prepare to be lied to over and over again.

THINK VERY CAREFULLY ABOUT STUDENT LOANS!!!

Vince Cable put it on hold for this parliament, not forever. Nothing's changed there. The difference (and it is very significant) in the sale of income contingent loans is that repayments will continue to be taken directly from your salary via HMRC so there is no direct debit nonsense and deferment application nonsense that goes on with the pre-98 mortgage style loan book.

amiehall

Same as mentioned above, newer loans are far less vulnerable to being messed about by being bought over as repayments are automatic through salary and managed by hmrc.

I would rather my loan not be sold I guess but I don't think it would be the end of the world.

ericctheking

Well in my opinion I think you are being naive to expect no changes if the loans are sold.
Some reasons why;
1) Repayments are automatic by the hmrc but the SLC instructs hmrc about the balance, would you trust a debt collection agency not to make "convenient" mistakes and let you try and claim the money back.
2) These loans have written into the the term that they can be changed at any time according to the regulations.
3) At the moment the SLC interpret the terms and conditions one way a DCA might choose to interpret them in other ways to your disadvantage.
4) People outside the British tax system have a similar deferment route to follow. Be careful if you are working abroad.

amiehall

Well what can anyone do about it... Better things in life to be stressed about than what will happen to my student loan.

Ed-1

ericctheking wrote: »

Well in my opinion I think you are being naive to expect no changes if the loans are sold.
Some reasons why;
1) Repayments are automatic by the hmrc but the SLC instructs hmrc about the balance, would you trust a debt collection agency not to make "convenient" mistakes and let you try and claim the money back.
2) These loans have written into the the term that they can be changed at any time according to the regulations.
3) At the moment the SLC interpret the terms and conditions one way a DCA might choose to interpret them in other ways to your disadvantage.
4) People outside the British tax system have a similar deferment route to follow. Be careful if you are working abroad.

1) Actually HMRC have no idea about the balance; they just collect the repayments and instruct SLC about the income figure (needed for post-2012 loans to determine the interest rate) and the amount of repayments so SLC can update borrower accounts.

2) They do while they are in the government's hands (note that this is to allow positive changes such as increases in the repayment threshold etc. and any amendments needed to follow changes in the tax system such as the introduction of real time information) but the terms would be fixed by the sale agreement at the point of sale.

3) As with Erudio, this is always going to be a problem when the loans are in the hands of debt collectors, but while HMRC are in control of repayments deducted from income (e.g. the private "lender" has no control over what counts as income like with pre-98 loans), there is much less scope for income contingent loans to be unfairly manipulated to the private firm's gain. One of the only major regulations I can see that could well be a target for any firm like Erudio on income contingent loans is the ability to call in the full balance in one repayment if a borrower breaks the agreement in any way (as long as the borrower stuck to the loan agreement they wouldn't be able to) which would be particularly horrendous for those with escalating plan 2 debt from £9k fees!

4) True. These are a group of borrowers that really get away with breaking the loan agreement by not making due repayments with SLC as they are much less prone to chase them. A debt collector would be much better equipped to do this. As long as you are overseas and making any due repayments, there would be nothing to worry about. The only ones that would have to worry is those deliberately (or otherwise) avoiding repayments by working overseas and it is right that these borrowers should be at the mercy of a debt collector.

ericctheking

1) If they have no idea about the balance how does HMRC know when to stop taking repayments? The SLC must instruct them the loan has been paid off. I can imagine some mistakes with that. In fact, I think it is already happening at the moment with SLC. I am sure I have heard of cases of HMRC continuing to deduct wages when the loan has already been paid off in full.

2) Just saying keep a close eye on any amendments to sweeten the sale!

3) I agree, there is much less scope for problems than with mortgage style loans but then that doesn't mean there won't be any. Reporting to CRAs etc, as you say calling in the whole loan for a technical breach of contract (say not updating your contact details in 14days or something like that) To be honest, I don't know the terms and conditions but look at the Erudio mess. I imagine if the loans were sold it will be a nightmare to find what your balance is etc. You might get registered of being on a "payment holiday" with CRAs. You might get sneaky "fair processing notices" in the post that you innocently sign and change the terms and conditions.

4) I'm not talking about people avoiding repayments I'm talking about people under the thresholds. They have to proof this to the DCA (not easy with Erudio where you are blackmailed into signing new terms and conditions to be deferred and they ask for irrelevant information, lose deferment forms on purpose etc). Then problems start, arrears build, loans get called in etc.

Ed-1

ericctheking wrote: »

1) If they have no idea about the balance how does HMRC know when to stop taking repayments? The SLC must instruct them the loan has been paid off. I can imagine some mistakes with that. In fact, I think it is already happening at the moment with SLC. I am sure I have heard of cases of HMRC continuing to deduct wages when the loan has already been paid off in full.

2) Just saying keep a close eye on any amendments to sweeten the sale!

3) I agree, there is much less scope for problems than with mortgage style loans but then that doesn't mean there won't be any. Reporting to CRAs etc, as you say calling in the whole loan for a technical breach of contract (say not updating your contact details in 14days or something like that) To be honest, I don't know the terms and conditions but look at the Erudio mess. I imagine if the loans were sold it will be a nightmare to find what your balance is etc. You might get registered of being on a "payment holiday" with CRAs. You might get sneaky "fair processing notices" in the post that you innocently sign and change the terms and conditions.

4) I'm not talking about people avoiding repayments I'm talking about people under the thresholds. They have to proof this to the DCA (not easy with Erudio where you are blackmailed into signing new terms and conditions to be deferred and they ask for irrelevant information, lose deferment forms on purpose etc). Then problems start, arrears build, loans get called in etc.

You make some good points.

FYI HMRC don't know when to stop making deductions (it's actually the employer making the deductions and submitting them to the taxman). The onus is on the borrower to keep an eye on their remaining balance. The SLC should send a 'stop notice' to the employer to tell them to stop making deductions. When you estimate the loan will be repaid in full within a couple of years, you can switch to making repayments by direct debit. Hopefully the SLC's online account would still be available to check balances as BIS has said:

"Following a sale, SLC and HMRC will continue to administer loans, with the collection processes remaining the same. This means that there will be no changes to the way individuals make repayments through the PAYE system or to the way individuals make repayments through self-assessment channels."

I think we'd all rather the loans not be sold, but have to accept that this is inevitable and hope we get one that isn't a trading name of Arrow Global! BUT since SLC would still be administering the loans rather than a private firm I think it wouldn't be half as bad as the Erudio situation where they are in full control of administration as well as owning the debt. Presumably, overseas borrowers (and UK borrowers) would still contact and deal directly with SLC on repayments.

The difference between a sale of ICR loans and mortgage-style loans is that ICR loans are still being issued and presumably will be for the foreseeable future as the principle has been established. Mortgage-style loans were discontinued so it would have been costly for SLC to continue administering them (that said, they still administer deferment where a borrower has shared loans).