erudio student loans

[mrsbug]

Hi, I have an old student loan from 1998 which I have been deferring since then as I have never earned enough to pay it back (there are some advantages to being poor )

I recently had a letter from a company called erudio student loans saying they have bought my student loan from the government. All very reassuring about how the t and cs of my loan won't change, etc.

Now I've had the regular deferral letter from them and it's much more detailed than before. They want my bank details which I'm not really happy to give, and they say my details will be checked with a credit reference agency, which I don't think they used to do - my loan has never shown on my credit file.

Has anyone else had this? Do I have to give them this info?

I noticed that child benefit is counters as income and found that quite odd - surely that money is for the child? I am still under the threshold even with cb but if it would have taken me over the threshold I guess we could get it paid to dp instead.

Sabby no advice but that sounds rubbish. I thought they weren't allowed to change the t and c of the loan?

Ooh thanks mandaki I will do that

Oh and why do they want my last 3 years of addresses???

Trying to remember as I did some digging years ago, but I think the only exemption under law for benefits being included in the gross income are disability related benefits? Unfair if so, but things frequently are.

SLC may have been more generous than that maybe, while Erudio are not.

I'm filling my forms in tomorrow, getting them off asap. My first loan was in 1992 so am so close to them being written off I just hope they accept the same sort of letter that I had to send to SLC. We'll see. Have this thread in my watch list, it will be interesting to see how this all pans out.

sabby I don't really know how the housing benefit works, but could you put it in your partner's name as the claimant?

I think it is awful that with one hand the Government are saying you don't earn enough money to support yourself and you are entitled to HB, and then Eurido class HB as income.

I can't remember what SLC did, I have only ever declared CB and income when I worked but I was never anywhere near the threshold for payment.

Sabby, I looked back at my old deferral forms from SLC and they also asked for details of Housing Benefit (plus other benefits) in the Gross Income section. Don't know why they wouldn't have taken it into account in the past - is it possible you were still below the repayment threshold in previous years?

Could you work less hours to bring you back under the threshold? You would need to carefully weigh it up against what the monthly repayments are likely to be - it might cost you less to begin repayment - sounds unlikely I know...

Having looked back over old papers, it seems having an up to date Direct Debit - IS a requirement of your agreement with SLC. I suspect if you cancel a DD, Erudio will claim you breached contract and demand repayment.
If they take a DD without permission or when you have been deferred - you can use the Banks DD Guarantee to get the money back.

Does anyone suspect the Homeowner/Tenant question may be with some view to obtaining charges over properties?.
Presumably after default/court action/judgement process which would no doubt take a very long time AND which if you were below the deferral threshold income - Erudio wouldn't win anyway as they are bound by original T&Cs of SLC loans and committed to OFT guidelines etc on 'fair practice' - although they have terrible reputation for underhand debt recovery tactics.

I'm fairly sure they can't do this as the original loans were unsecured but I'm no expert on debt recovery law

I think a lot of Erudio's 'method' is about using the power of suggestion in these documents to make people worry about how Erudio might influence their credit records and hope that this pressures people to prioritise student loan repayments even when they don't legally have to, when they legally do not have to repay.

Erudio's plan is to catch people out on technicalities and demand repayment that way or psychologically bully people into repaying even when they don't have to by implying they are constantly watching or putting black marks against peole's records.

Something else, for the people who are in employment and can supply 3 months payslips - don't also tell Erudio that you have financial support from a partner.

Keep it simple. Declare your income. Send your payslips. That's your legal obligation fulfilled. You don't have to justify/explain your life beyond that.

No matter how much they try to guilt trip/shame peole into explaining their finances - only give them what they need to obtain deferral.

Yes. It is also very revealing what was said during the sale. Emphasis was not on administering the loans, but instead things like:

www.gov.uk/government/news/sale-of-mortgage-style-student-loan-book-completed

"The private sector is thought best placed to collect the outstanding debt"

" The private sector is well placed to maximise returns from the book which has a deteriorating value."

In other words, we will sell it off to dodgy debt collectors, who so we can distance ourselves from it if they use underhand methods.

This is such an anxiety inducing subject!!!

Anyway, I've been checking online legislation to see the actual details that can be required of borrowers trying to defer. I've been looking around the mid 1990s for legislation in force when I took my loans.

Can't find anything on being a homeowner but I think this may be relevant:
www.legislation.gov.uk/uksi/1998/211/schedule/2/paragraph/15/made#text%3Dstudent%20loans%20deferment

Says the borrower can be required to repay the whole loan in full if a borrower does not make a payment when it is due! Erudio will like that.

This is about the proof they can ask for in relation to income:

www.legislation.gov.uk/uksi/1998/211/schedule/2/paragraph/9/made#text%3Dstudent%20loans%20deferment

It says the borrower can defer as long as their income is below the threshold in the 'relevant month' (this is the month before the month in which you apply to defer www.legislation.gov.uk/uksi/1996/1812/regulation/11/made#text%3Dstudent%20loans%20deferment) and if the borrower can 'show' that the income will be below in the 3 months following the 'relevant ' month.

So, essentially, no matter if they start asking you for the last year's bank statements, you don't have to give them.

You only have to satisfy the administrator that your income in the month before you apply to defer was less than the threshold and 'show' or sign the 'warrant/certificate' that you believe your income in the following 3 months will aslo fall below the threshold.

Phew! I thought they had power to ask anything ... just goes to show.

Hope this helps anyone else

Sorry, left out the 'Homeowner' context. Yes, I wonder if a borrower missed a repayment and Erudio then decided to demand repayment in full, as they are allowed under the legislation.

If a borrower had no income but owned a home, Erudio may be able to obtain a charge against the property title, meaning they get their money when the house is sold.

I think they would pursue this anyway, regardless of answering the question on the form, if they were going for repayment in full.

Just been reading a discussion on consumeractiongroup about this and I'm appalled at the advice on there. They claim that Erudio could not take you to court. Utter nonsense. As the absolute legal assignee of debts they have all the legal right to take you to court if you break the agreement that SLC did.

The contract also obliges you to keep an up to date direct debit mandate in place. If you don't you are breaking the agreement and allowing them to demand full payment AND take court action if you don't pay.

Wow, that's interesting and a bit worrying!

maybe it is better to give direct debit instructions, so they cant try to claim you missed a payment?

I'm going to do mine this weekend - i need to check how much interest my isa earned. It will be a few pounds and I've never bothered to declare it in the past but i will this time as it seems like they are trying to trip you up.

not sure what they are going to make of my payslips as over the last three months i have returned from maternity leave, then gone down to part time. So they are all for totally different amounts.

does anyone know if your gross income should be the amount before or after childcare vouchers come out? On my payslip the salary sacrifice amount is taken from the initial payment, and isn't counted as a deduction in the same way as my tax and pension etc.

Good advice mandakl - just looked up the consumeractiongroup thread - there's a lot of dangerous opinion on there.
I think a lot of people could come unnecessarily unstuck - which is exactly what Erudio want.

With all these dormant, time-expiring debts, it would be in Erudio's interest to encourage people to break the terms of the original contract and allow them to take you to court, thereby gaining a proper judgement rather than a deferred loan, many of which run out in a few years when people hit 50.

Would i be breaking the terms of my contract if i don't tell them whether i am a homeowner and don't give them a phone number?

Nothing in the credit agreements or legislation obliges you to give that information as far as I can see mrsbug

I'll leave it off then and see what happens. I'm going to send the letter linked to above asking for a copy of my loan agreements along with the deferral application too.

mrsbug & mandakl - that question about leaving out address status and phone number is puzzling. I can't imagine that there's any obligation or consequence for not answering those questions BUT...

On the SLC Certificate/Warranty that borrowers had to sign it used to say, false statements and mis-statements may result in proceedings against you.

On the Erudio paperwork they refer to mis-statements and 'omissions'.

Nobody can demand a telephone number because people are allowed not have phones - so Erudio can't have you for not giving a phone number.

They already know you live at a certain address - can they really have any right to demand your address status?
It must have an ulterior purpose given that loan repayment is exclusively tied to income -- unless you default and they obtain a court order perhaps.

Can they argue you breached your agreement by 'omission' if you don't tick the box?

I am very wary of Erudio perhaps verging on paranoia

Erudio can write whatever they like on their paperwork, but it doesn't mean you have to supply the information.

"Does your uncle bob have a beard? yes/no"

They have as much right to insist on that as they do to insist you answer the house questions.

The only criteria for deferment is proof of gross income.

They don't need and cannot insist that you provide or prove anything else.

If omit something they are not entitled to in the first place, they have no comeback against you.

Obviously if you omit something relevant to your gross income and hence the deferment, that is another matter.

Thanks mandakl - that's reassuring. I get very oppressed by dealing with organisations which profess to have great power over one. It's interesting that in the back of the Erudio deferment guidelines FAQs they say this:

"Some of the sections of the application form require you to provide more detail, however the requirements to successfully apply for deferment remain the same as last year."

It's demanding more details, as though by some implied legal right, but saying the rules for deferment remain the same.

It's typical debt collector behaviour - fishing for more info than they are entitled to.

You have to remember what this company does as their main business. And even in that low company, they have a reputation as being lower than most.

Oh and by the way, the format and content of the deferment form is not specified in the terms and conditions of theses loans. Have seen it claimed on other sites that it is, so cannot be changed, but that is just plain nonsense.

These loans are also different to normal credit card or bank loan debts. With those if you get in to trouble, get a CCJ etc, and have no other option, you can go bankrupt, do an IVA, a debt relief order etc and wipe them out.

As mortgage style loans were made under the Education (Student Loans) Act 1990 they are exempt from be written off by those. There is no final "get out" in the worst situation that you have with normal debts.

On top of that, if you breach your obligations under these loans you ALSO while you are in breach lose you right to have them written of at age 50/60 or after 25 years - whichever applies to you - so again you can't just say sod them I'm not paying without extra consequences.

The agency collecting and administrating these may be a DCA under another name, but there are important differences that it would be foolish to ignore.

Have a copy of agreement here. Will post.

These are what my agreements looked like (example).