Student Loans Sold On

sweddle7

Just trying to get an undertstanding of the control that private companies can have if they buy our debt off the student loans company.
Can they wipe the threshold?
Can they increase the 9% that we have to pay back out of our pay each month?
Since it will be coming directly out of our paycheck, will we have any control?

Lungboy

It depends on the contract that they sign with the government, but generally no, they can't change the fundamental workings of the loan. It doesn't stop them trying however.

Ed-1

sweddle7 wrote: »

Just trying to get an undertstanding of the control that private companies can have if they buy our debt off the student loans company.
Can they wipe the threshold?
Can they increase the 9% that we have to pay back out of our pay each month?
Since it will be coming directly out of our paycheck, will we have any control?

Borrowers have no control over the terms of repayment as you sign an agreement that you'll repay in line with the regulations as amended from time to time.

Parliament has given the Government the power to amend the regulations without their approval. The Government has 2 options when it comes to a sale. They can either decide to:

(a) fix the terms for sold loans at the point of sale; or
(b) retain the ability to amend the terms from time to time but compensate the loan purchaser for any amendment that is detrimental to their repayment receipts.

It looks like the Government are favouring option (b) but in either case the loan purchaser has no control over terms.

See question 4: https://www.parliament.uk/documents/lords-committees/economic-affairs/Student_loans/161007_Jo_Johnson_to_Lord_Hollick_response.pdf