When are student loans written off?

trimmtrab_2

I have 3 loans from 1996, 1997, 1998 and are on the old mortgage style loans. They were taken out through the SLC but were taken over by Erudio 4 years ago.

I am now 45 and live in England (Loans were also taken out in England).

I have never earned over the threshold and therefore have not paid these back. I read in some places they are written off after 25 years or when you are 50, and in other places after 35 years or when you are 60.

Can anyone confirm for me when this happens and perhaps even give the link to the official information?

If you need any more info please indicate. Thank you

fermi

The Education (Student Loans) Regulations 1998 was the last set of loan regulations under the old mortgage style loans, and the provisions in that replace all the ones from previous years and the earlier T&Cs in the loans before that.

So that is the current legal provision that applies to your laons given the dates and the system you were on.

http://www.legislation.gov.uk/uksi/1998/211/made

12. The lender will cancel the borrower’s liability to repay the loan if the borrower—

(a) dies,

(b) is not behind on any repayments under any agreement for a student loan and—

(i) was under the age of 40 when his last agreement for a student loan was made and he reaches the age of 50 or when the last agreement for a student loan has been outstanding for not less than 25 years, whichever is the sooner, or

(ii) was aged 40 or older when his last agreement for a student loan was made and he reaches the age of 60, or

(c) if the borrower can show the lender that he gets a disability related benefit and because of his disability is permanently unfit for work.

So as you were under 40 at the time your last loan was made, then it must be cancelled when you reach 50 according to that.

PasturesNew

Do they get written off even, if, say, you win the Lottery?

Is the loan write-off completely disconnected from how much money you actually have at that time?

silvercar

PasturesNew wrote: »

Do they get written off even, if, say, you win the Lottery?

Is the loan write-off completely disconnected from how much money you actually have at that time?

Not sure about loans taken in the 90s, but loan repayments from loans under the newer schemes are linked to income. So you could win the lottery, but if the interest on the money you won meant you had an income above ~ 18k you would make repayments.

You are paying back 9% above a certain level income, it would take a brain of below degree level stupidity to avoid earning a higher salary just to avoid paying 9% of it back.

fermi

PasturesNew wrote: »

Do they get written off even, if, say, you win the Lottery?

Is the loan write-off completely disconnected from how much money you actually have at that time?

Disconnected in a direct sense, yes. The legal write off is not contingent on any other conditions than those set down in the 1998 regulations. The loan administrator cannot change those or impose any extra ones. Money in the bank or income does not affect your right to have whatever outstanding balance exists at the time you reach the write off point being wiped.

May perhaps seem a little unjust, but I suspect they wanted a definite cut-off point for these loans and to not have too much overly complicated administration towards the end of their life, so probably decided that was an acceptable compromise.

trimmtrab_2

Thanks for that. Hypothetical question: Erudio say they want everything paying back in 60 months if you go over the threshold. Let's say I was 47 and then went over threshold. Would Erudio base payments over 60 months still but stop when I'm 50? Or would they want the full amount back by the time I'm 50?

(hope you understand what I'm trying to say here).