Bad financial advice on student loan repayment 1999

Ally_Cameron

Dear MSE forum team

I had student loans in 1995,1996, and 1997.

In 1999 I inherited some money from my grandparents and took financial advice regarding investing the money.  At that time I was advised to repay my student loans and clear my debts, which I did, even though my earnings were not at the level required to start repayments.  In fact I have never earned the threshold to repay.

I see in the student loan article that if you have voluntarily repaid you cannot claim from the student loans company.  My questions is:

Can I make any complaint to the financial ombudsman regarding bad financial advice? and if so, what could I expect to happen?

Please thank Martin for all his advice, he continues to save me money on a regular basis and as far as I am concerned he is a peoples champion/ hero.

McKneff

Took financial advice from who and when
Are they still in business
Are you actually hoping you can sue them

saajan_12

- You'd need to complain to the actual advisor / company first before the ombudsman would pay attention
- Any (successful) complaint would need to be based on the reasonable knowledge and actions at the time, not on hindsight 
- The negligence or lack of due care would need to be severe to surpass any disclaimers they had eg to check xyz yourself. 

silvercar

These were old style or mortgage type loans. They operated in a very different way to the newer style student loans. So any advice you were given would be different to advice you may receive on today's loan.

You could defer every year that your income was below the threshold. Are you quite sure you never earned above the threshold? Loans were written off at age 50 or after 25 years, so they would have been written off by now, if you are sure they never entered repayment.

The problem is that your financial advisor could not have been expected to know exactly what you would have earned every year going forward from 1999, so would only be able to advise you based on the likelihood of you earning sufficient, or not. If you feel you were badly advised then you can complain to the company and if you reach deadlock to the ombudsman. But your complaint would be about bad advice at the time, not whether in hindsight your advisor was right or wrong.

silvercar

Here is the MSE article specifically for paying off the old style loans. Note that the interest rate is very high, so if there was any chance of you earning sufficient to be making payments, I can see why someone may say it is best to clear it. But I don't have your total financial picture, your advisor would have done. eg it may be that you could have got a bigger mortgage (that you needed) by not having the student loan.

https://www.moneysavingexpert.com/students/student-loans-repay-pre98/#pay