IVA & Student Loans

mrcactus

Hi all.

I've applied to Open University a few months ago and am due to start my course in October. I applied for student finance and grants and all that.

I applied for maintenance loan as well and in October when my course starts, around £1200 will be paid directly into my bank account to spend on what ever I like. The course fee etc is being paid directly from Student Finance to the Open Uni.

Just wondered if the £1200 is classed as a loan/extra income and if I have to pay the 10% 50% thing (still can't work out what it is in terms of my IVA agreement)

I'll be studying part time and will still be working the same 40hrs a week so wont be losing money and will still keep up the IVA payments.

Wanted to spend the £1.2k on some extra study books and a laptop but if I have to pay some/most of that into the IVA, then I won't bother with it.

Just wondering if anyone could shed some light on this...I'll call up IP tomorrow anyway to confirm but if anyone knows anything that would be great

thevdm

From my understanding a grant is classed as income, whereas a student loan is considered a form of finance not included in the IVA. It should be no different than you borring money allowed by the IP.


It would be best to contact the IP office to ask just in case though as they will be able to give you the definitive answer.


On a side note, I wasn't aware that you could get a maintenance loan with the OU. I started studying with them in 2014 and haven't seen much about it (mind you, I don't pay much attention to the general news section on the OU)

mrcactus

thevdm wrote: »

From my understanding a grant is classed as income, whereas a student loan is considered a form of finance not included in the IVA. It should be no different than you borring money allowed by the IP.


It would be best to contact the IP office to ask just in case though as they will be able to give you the definitive answer.


On a side note, I wasn't aware that you could get a maintenance loan with the OU. I started studying with them in 2014 and haven't seen much about it (mind you, I don't pay much attention to the general news section on the OU)

Well, you were right. Called IP today and they said the maintenance loan would be classed as extra income and the creditors would most likely want some (if not all) of it.

The tuition fees etc that are paid directly to the OU are fine under the t&c's of the IVA.

The maintenance loan was through Student Finance Wales. When I applied I just applied for max everything, not thinking that the money paid to me would possibly affect the IVA :(

mwarby

Given your IVA us quite new it could (emphasis on could) be an idea to see if an IVA is still for best. In bankruptcy they may well take nothing

PrettyKittyKat

It is income and therefore should be included. If you can evidence what you are spending it on (e.g. receipt for laptop purchase, receipt for study books purchase etc) then your IP may offset these costs first before additional monies is calculated - you would need to ask them directly about this.

mrcactus

PrettyKittyKat wrote: »

It is income and therefore should be included. If you can evidence what you are spending it on (e.g. receipt for laptop purchase, receipt for study books purchase etc) then your IP may offset these costs first before additional monies is calculated - you would need to ask them directly about this.

Yep, they basically said as I'm not reducing my hours at work and using the student loan as a replacement then it would be considered income.

Would there be any way they could find out if I just accepted the loan? They only asked me for September's bank statement, and Jun,Jul and Augusts payslips...so the student loan is only paid 3 times per year. In my case it is paid in Oct this year, Jan and April next year.

It;s proving difficult to get student finance to cancel the loans at the moment, and the money is due to be paid to me in like 2 weeks time. As far as I know it doesn't show up on credit file, nor on payslips or p60's etc (unless I earn over a certain amount).

Would it be risky to accept it do you think? My IP said they would need proof that it's been cancelled, but they don't really know if I'm actually getting it with out requesting more bank statements...I completed my annual review last week I think and so far I haven't heared anything back from them to say it's gone ok or gone bad?

PrettyKittyKat

mrcactus wrote: »

Yep, they basically said as I'm not reducing my hours at work and using the student loan as a replacement then it would be considered income.

Would there be any way they could find out if I just accepted the loan? They only asked me for September's bank statement, and Jun,Jul and Augusts payslips...so the student loan is only paid 3 times per year. In my case it is paid in Oct this year, Jan and April next year.

It;s proving difficult to get student finance to cancel the loans at the moment, and the money is due to be paid to me in like 2 weeks time. As far as I know it doesn't show up on credit file, nor on payslips or p60's etc (unless I earn over a certain amount).

Would it be risky to accept it do you think? My IP said they would need proof that it's been cancelled, but they don't really know if I'm actually getting it with out requesting more bank statements...I completed my annual review last week I think and so far I haven't heared anything back from them to say it's gone ok or gone bad?

Yes it is risky. You are breaking the rules of your IVA which you are fully informed of (IE it won't be an honest mistake). It will be noted on your notes at your IVA company that you are getting a student loan so any relationship manager/IP worth their salt would
request updates on this - which may not be until later in your arrangement. This could potentially result in an IVA breach and subsequent termination and your creditors not going to look very fondly upon the reason for this.

Of course they may never realise and you may have 'cheated the system' but is it really worth all that time of worry? I presume as you are in an IVA you are having a substantial amount of debt written off so even if you 'loose' 50% of your student loan money (although if you only get it 3 times a year and it is being assessed under income in your 6 monthly reviews you are like to have to pay in less) then it is most likely still substantially less than the amount being written off.

I am sure you can cancel and loan and return the money if it does come to you straight away. You would be able to evidence it was returned straight away on your bank statement and provide the letter confirming the loan was cancelled.

mrcactus

Yeah, I guess you're right...as soon as I would receive the money I would be worrying the IP would find out lol.

How could the IP do such checks on this then? Could they simply phone up student finance and ask or because I've already spoke to them about it could they randomly request a bank statement and then see the money go in?

I find it strange though that my main bank is Starling but I got a monzo one as well but they never asked for any statements for that one. I keep the monzo one as an emergency just in case anything happens with my starling one. I've never got any money in there anyway :rotfl:

PrettyKittyKat

mrcactus wrote: »

Yeah, I guess you're right...as soon as I would receive the money I would be worrying the IP would find out lol.

How could the IP do such checks on this then? Could they simply phone up student finance and ask or because I've already spoke to them about it could they randomly request a bank statement and then see the money go in?

I find it strange though that my main bank is Starling but I got a monzo one as well but they never asked for any statements for that one. I keep the monzo one as an emergency just in case anything happens with my starling one. I've never got any money in there anyway :rotfl:

Yes they can request bank statements and they could also request you provide the letter from student finance confirming the loan was cancelled and not taken out. They wouldn't be able to ring student loans direct as far as I am aware.

This is a legal arrangement, you are getting a substantial amount of debt written off (I presume, if not then this may not be the best solution for you), simply put - just follow the rules. If you aren't happy with introducing the money then fail the IVA and do debt management whilst you are a student then propose another IVA at a later date. The implication of this is that there is no guarantee it will be accepted at a later date and you would end up repaying more than you get to 'keep' from the student loan anyway!