New style Student Loans and statute barred

thomnewman

Can new style student loans become statute barred?

I understand they can technically deduct payments from wages in the UK once you reach a certain threshold; yet if there has been no payment and no contact in over 7 years and I no longer live in the UK they cannot pursue.

From Martin's website it states, and I quote "The student loan has been set up as a contract, not a tax. Therefore, the fact that you're no longer living in the UK doesn't affect that contract."

If it is a contract, surely this falls under the limitations act?

I am not posting this to question the ethics of paying or not paying any alleged loans, just a simple question of it being statute barred. I was advised by the national debt line it is.

Cheers.

smashinglynaive

thomnewman said:

Can new style student loans become statute barred?

I understand they can technically deduct payments from wages in the UK once you reach a certain threshold; yet if there has been no payment and no contact in over 7 years and I no longer live in the UK they cannot pursue.

From Martin's website it states, and I quote "The student loan has been set up as a contract, not a tax. Therefore, the fact that you're no longer living in the UK doesn't affect that contract."

If it is a contract, surely this falls under the limitations act?

I am not posting this to question the ethics of paying or not paying any alleged loans, just a simple question of it being statute barred. I was advised by the national debt line it is.

Cheers.

https://www.nationaldebtline.org/fact-sheet-library/statute-barred-debts-ew/

In essence, the cause of action date to fall under the limitations act is whenever you reach the threshold to start paying it back.  If you never hit that point it's going to be enforceable forever.  You have a legal obligation as per per "Education (Student Loans) (Repayment) Regulations 2009" to inform them if you leave the country 

6.7 What happens if you travel or work overseas

If you don’t pay UK tax or you plan to leave the UK for more than 3 months at any point after you finish or leave your course (whether this is temporarily or because you will live in another country), you’ll make repayments directly to SLC. You must let SLC know before you leave the UK. If you don’t, they can charge penalties on your loan and where necessary, ask you to repay the full amount of loan plus interest and penalties in one lump sum.

SLC will ask for details of your income and will work out how much you should repay each month. They’ll change your income into pounds sterling and tell you the amount you need to repay each month in pounds sterling. You’ll be responsible for any costs involved in converting the currency and you’ll have to pay any fees your bank charges to transfer funds to SLC.

As you would in the UK, you’ll repay 9% of your income over the repayment thresholds for plan 1 and plan 2 loans and 6% of your income over the threshold for Postgraduate Loan. But because of differences in living costs, the repayment threshold SLC applies in another country could be different from the UK threshold.

If you think a government didn't think about that potential loophole you're a bit naive.

sourcrates

The short answer is yes, they are subject to the limitation act, however, the cause of action is likely to be when your earnings reach the set level at which deductions from your wages can begin.

Because the Student Loan Company can take money directly from your wages, it might be more difficult to use the Limitation Act.

I was going to refer you to National Debtline, but it appears you beat me to it, from what you have said, then the debt may possibly be statute barred, I suppose the litmus test would be to use section 5 against any request for payment, or as a defence to any court action that may occur, and see if they accept that, or not.

phillw

thomnewman said:

I was advised by the national debt line it is.

What will you do if that advice is wrong? Do you think that you'll do better with advice from a web forum?

I'd say that if you told them your address then you will have a better case in court than if you scarpered without leaving a valid forwarding address.

My understanding however is that if you return to the uk to work and earn above the threshold then they can start to take money through your tax code. As they don't need to go to court to do it & as you owe them the money, then you can't stop them.

If you're not in the UK then why are you worried? Have they contacted you?

thomnewman

smashinglynaive, the cause of action can come at 2 separate points. Firstly, if the person completes their degree and start to earn a certain amount. Secondly, if the person does not complete the degree and leaves uni, the cause of action is from the point the person leaves uni and at that point, SLC can request payment in full.

As of this, the statute of limitation could well apply. If in the UK, it's a bit irrelevant as they can simply take from peoples wages regardless. If the person is abroad, they can not do that and statute of limitations means they cannot chase through the UK courts would be my understanding.

Phillw; I would hope the national debt helpline would be the place to gain accurate information. I have seen a few contradicting pieces of information and was just hoping someone here may have had experience in the matter.