Am I liable for my Wife's Student Loan arrears?

BoGoF

Is interest accruing on the arrears?

If so, I don't see the benefit of not clearing the arrears now seeing as you will have to pay them to get the loan wiped. Principles are all well and good.....but sometimes they cost you money.

MrBowman

BoGoF wrote: »

Is interest accruing on the arrears?

If so, I don't see the benefit of not clearing the arrears now seeing as you will have to pay them to get the loan wiped. Principles are all well and good.....but sometimes they cost you money.

No, the arrears amount has never changed since they were accrued years ago, therefore no interest is being charged. The interest is only on the overall loan amount.

So Erudio have approved my Wife's deferment for another year. They said that no action will be taken on the arrears because they are historical, but they will if new ones are accrued, which can only happen if you don't submit the deferment in time (although they will back date new arrears by three months anyway). Needless to say we will not be letting that happen or even getting to that point.

But, in order for the loan to be wiped in 2024, we will have to pay the outstanding arrears so we will be doing that at some point anyway. But like I said, I am not prepared for my Wife to be threatened or be pressured into paying anything now when she (i.e. me) does not have to.

Lungboy

One thing to note is that the writing-off of the loans at 25 years/age 50 won't happen if there are any arrears on the account.

Mojisola

MrBowman wrote: »

Her loan has arrears on it from previous years that she accrued by being a bit slack on applying for the deferment, but Erudio up and until now have never chased for them to be paid.

They have even suggested she looks to claim benefits so she can pay it off. She does not work due to medical conditions

Now in 5 years time she will be eligible for the loan to be wiped away, and to do that, the arrears will have to be paid. That is fine, and I would stump up the cash to get that done

As your wife is already coping with health problems, why prolong the stress of being chased for the debt? You know you're going to pay it in five years time - why not do it now and put an end to the problem?

flanker6

MrBowman wrote: »

They have even suggested she looks to claim benefits so she can pay it off. She does not work due to medical conditions but we have never claimed a penny off the state and have not intentions of doing so, especially to hand money over to them.


Now in 5 years time she will be eligible for the loan to be wiped away, and to do that, the arrears will have to be paid. That is fine, and I would stump up the cash to get that done,

When the debt is "wiped away", it is the state that will be paying it off!
So, if you are prepared for the state to pay it off in the future, why not get them to pay it off sooner?
You could save yourself (and wife) money and hassle if your wife was able to claim benefits to pay off the loan.

Terry_Towelling

What @flanker6 says is sound logic. If your wife claims benefits to which she is entitled, these can be used to pay the arrears (instead of you paying it out of your own cash). Think also of your wife's state pension. Claiming benefits can protect her NI contributions and possibly retain full pension entitlement.

Obviously paying what you owe on your own is the honourable way (and I don't necessarily espouse any other way), but it sounds like she is missing a trick by not claiming benefits to which she is entitled.

[Deleted User]

I'm baffled why if she cannot work for medical reasons does she not claim the appropriate benefits ESA and PIP spring to mind, either of those could pay off the debt in a matter of weeks. ??

Lungboy

flanker6 wrote: »

When the debt is "wiped away", it is the state that will be paying it off!

No it isn't. These loans are owned by a DCA called Erudio and have nothing to do with the state.

BoGoF

Lungboy wrote: »

No it isn't. These loans are owned by a DCA called Erudio and have nothing to do with the state.

And did Erudio provide the loan that will be wiped......

ToxicWomble

It’s the magic money tree from which people can take from without worrying about ever paying it back.
Personally I do think these should EVER be wiped out - after all it’s a LOAN, not a gift.
You talk about it being wiped In 5 years - is there NO chance of your wife managing to find employment in that time due to her health conditions or is she avoiding finding work to avoid paying the loan back ?
This might sound harsh, but it happens on a very regular basis.
But as others have said, you are biting your own nose to spite your face via your principles.
Your wife and yourself could potentially be much better off claiming any benefits you are entitled to - but your principles and pride are getting in the way.