UK Tier 2 Student Loan repayment from overseas

Commercially_Confused

Hello,

I went to pursue a degree in England and took out a student loan. After graduating in 2019, I returned to live in my home country Bulgaria.

I then started to work full-time in Bulgaria and since I was no longer in the UK, I had to contact Student Loans Company to inform them of my current residence and income so that I can start paying instalments towards my student loan. The amount of my monthly repayments is set by the SLC each year based on the pay slips sent to them by me.

I have been paying this loan for 4 years now and it has grown from £32 000 to £39 000. The reason for that is the high interest rate. The living standards in Bulgaria, wages and currency are much lower than the UK. For this reason, my not so low monthly instalments, determined by my income in Lev, are literally not contributing anything and so this loan will never be repaid. If my salary increases, in 30 years when this loan is written off, I will have paid back much more than the amount I originally took out. I have decided I don’t want to pay it all in one lump sum.

Does anyone know what happens if the payments and contact with SLC are stopped? My particular concern is that they already have my employer details, personal details, address and pay slips and I do not know what they can do with that information if I just stop contact. To what extent can they pursue people abroad and has this happened before? Could they make contact with a Bulgarian institution and sell the debt to a collector’s agency here?

 

I’ve read that in instances where you stop paying them voluntarily, they can pursue a CCJ towards you in the UK, however I do not know what the implications of that would be in another country. Also, if a CCJ is issued, I am also not sure if the loan can become statute-barred 6 years afterwards as per the UK statute of limitations. If this is the case, what would statute-barred mean in my case, being a person abroad? Can student loans of delinquent payers even become statute-barred, or are they kept “active” for life?

I apologise in advance for the wall of text and questions. It is just a stressful situation and I am trying to obtain as much information as possible before making a committed decision.

I would wholeheartedly appreciate any feedback and personal experiences!

Thank you and stay sane!

silvercar

Fairly standard, when your income isn’t enough that the repayments you are required to make are less than the interest being charged, so the outstanding amount grows.

When your income reaches a level that means repayments are at the maximum level for repayments for those that choose not to declare income in Bulgaria it would make sense to choose to no longer declare income. This will give you a repayment that is fixed. You continue to pay this until the loan is written off.

My understanding is that student loans are never statute barred. They also don’t get written off if you haven’t kept up with repayments or maintained contact. So it is in your interest to make the repayments due.

Whereas I have some sympathy for someone on a low income continuing to make payments to a debt that is only increasing, at the end of the day you took a loan, funded from the UK government, through which you obtained a degree. You then leave the country, so not returning any money to the British economy, and are now looking at evading your pay back responsibilities. Think of it as a graduate tax.

Your chances of being caught out by this, if you discontinue payments, are far greater if you ever return to the UK. 

silvercar

Currently the fixed payment from someone working in Bulgaria is £148.80 a month. So if the repayment calculated on your earnings is above that, you could choose to not declare your income and pay that instead.

The threshold is an annual £10,920. So you pay 9% of everything above that.

Once you earn £30,760 it would make more sense for you to choose not to declare income and pay the fixed payment for undeclared income.

I’m assuming a Plan 2 student loan from England.

these figures change each year - here is the link:

https://www.gov.uk/government/publications/overseas-earnings-thresholds-for-plan-2-student-loans/overseas-earnings-thresholds-for-plan-2-student-loans-2024-25