Erudio Student Loans Continued part 3

[erudioed]

I dont know if this is the right way to do it and i apologise if it isn't but this is the continuation of www.mumsnet.com/Talk/legal_money_matters/a2057131-Erudio-Student-Loans-Continued

New MSE article on these new letters 58,000 of us are getting that seem to appear like a thinly veiled threat of a mysterious nature. Dont worry about it the article suggests:
www.moneysavingexpert.com/news/loans/2014/07/hit-by-1990s-student-loans-blunder-check-for-erudio-packs-in-post?_ga=1.229204700.1169245283.1404124670

I posted my completed form today. I copied it and have got it to be signed for.
Blanked out the cheeky requests and made it clear a complaint about dd will follow. Any ideas where I can make this?

Some thoughts cut and pasted from a post i just did on MSE:

I think we may already have had an impact already. The more i think about it, the more it rings true we might have had a small hand in this:
www.independent.co.uk/news/bu...n-9620049.html

Although Vince Cable and BIS seem to suggest selling off the student loans is not financially valid now, with the press coverage making no mention of the Erudio debacle, i just wonder if we may have just had the ultimate effect. Here is one bit of th article: "MPs have told the Government set out the costs of the sale, as well as the benefits. Adrian Bailey, chair of the BIS select committee, said: “The student loans system needs urgent attention and it’s vital that BIS doesn’t further undermine the viability of the system by selling off the income-contingent loan book at a knock-down price.”

well, concerning the benefits of a sale, that is surely where we come in at some point. We are the case study for how future sales would go. BIS have been inundated with complaints from us and we have focused alot of attention on this issue with our peppering of everyone we could think of. With certain legal issues some of us have raised about changes to this and that, finding it virtually impossible to get specific answers to specific questions, and highlighting how poor Arrow, Erudio etc is (one of the best at this kind of operation according to what BIS believed) must have been on the radar of people like Cable and the Lib dems. I am not suggesting that we have been responsible solely for the about turn because money speaks louder to most, but when considering future loan sales, BIS will have been very aware of how the last sale of our loans has created much more work for them than they would like. BIS were also interacting very closely with Lewy, calling him numerous times a day, and even forcing his hand to admit the 500 DDs stolen and such things.
Maybe we had no effect, with poor oiks (us) being the last consideration, but i very much doubt anyone in government could say they cancelled student loan sales because the one undertaken so far where all power was handed over to a private company has been a disaster...no, they would give another reason, ie, that it doesnt represent good value for money (well, was the sale of our loans good value for money...rereading the earlier forum posts would suggest we thought not on the whole, nor did the earliest news reports of the sale).
Of course, that doesnt help our predicament dealing with these vultures for many years to come, but if we have had an influence (even a small one) on that decision to stop the sale of student loan debt, then we have had a significant result.

Well I think we are all about to have our Credit Records trashed if we have applied for deferral!

The constantly changing FAQs on Erudio's website now have a very distressing update advising that deferred loans will be registered with CRAs as being on a 'Payment Holiday.'

Erudio state :-

"Where your account is in deferral it will be treated in the same way as any other form of loan which is in a payment holiday and will not be treated as a default."

The Money Advice Service set up by government advises that Payment Holidays will adversely affect credit records. They state :-

"Even where your lender agrees this temporary solution, your credit file WILL be affected – this in turn could affect your ability to get credit in the future."

I think it is SHOCKING that this is being drip fed to us, and this low down and frankly deeply distressing update almost 5 months after most of us received our deferment form shows that Erudio never planned to be transparent, fair, or even compliant with the Data Protection Act.

And it apparently does not matter if we write all over the form that we do not agree to our details being passed to CRAs in this way. In using the form and signing the declaration, we apparently HAVE agreed to this distinct change to the terms and condition of our loan. There is no good news. I think we have been abandoned and Vince Cable could not care less about us. We were the experiment for student loans when they were introduced, and we have been the experiment again to see how fully selling loans to shady debt collectors would go.

If anyone is prepared to fight on, then the most important route is to complain to The Information Commissioner's Office. We have to make them aware that our original loan agreement did not make things clear, and we should be allowed to consent to having our details shared with CRAs. After all, the 1998 Data Protection Act has given students who took out loans from 1998 onwards the right NOT to have their details passed on to CRAs if they so choose - AND SO SHOULD WE!

Further more, I object to the 'payment holiday' term being used on 'deferred student loans.' It is worth complaining to the Information Commissioner's Office that this is not strictly accurate and WILL be detrimental to our credit records.

TO COMPLAIN TO THE INFORMATION COMMISIONER'S OFFICE follow the link ico.org.uk/concerns/handling/report_your_concern

Or call them on 0303 123 1113.

This is going to be a MAJOR issue for us all. It is worth reading through all Erudio's latest FAQ's. It is no surprise that the full extent of ther evil wickedness has only been revealed on their website now that the vast majority of people have folded and returned their UNFAIR deferment form. THEY HAVE GOT US. I am very depressed.

And finally, it looks like Martin Lewis's Money Saving Expert team have turned their backs on us too. The latest 'nothing to worry about' article by senior new reporter Helen Knapman seems to have a subtext. Doing Erudio's job for them in my opinion. It looks like Helen Knapman has received a press release from Erudio, and helped them out by saying how Erduio is doing the right thing while the SLC were bad. Thank you Money Saving Expert! Here is her one sided excuse for journalism - www.moneysavingexpert.com/news/loans/2014/07/hit-by-1990s-student-loans-blunder-check-for-erudio-packs-in-post?_ga=1.141964091.883861080.1393944622

Grrrrrrrrrrrrrrrrrrrrrrrr

Personally I still think the whole credit reporting issue is still a threat they won't carry out and they are just trying to scare people into deciding to pay back when they are eligible to defer.

However, if mine appear on my credit file I will be going after them. Complaints will be flying. Whilst it won't effect me in my current situation, it is the principle of it for me (and how it affects others who are not so lucky).

I think that the likelihood that I will earn over the threshold is pretty slim and I would have considered trying to pay it back anyway a bit at a time but they have burnt their bridges with me now so if I can defer I definitely will and if that takes me to my write off date then so be it! (or if it takes me to less than six years to my write off date then I'll accept that too as I am sure that mean they won't get the full amount!)

I don't see how they can say we 'have' accepted the new conditions when we wrote on the form that we didn't and were forced to use it against our original t &c - my complaint to the FOS is about the being forced to sign up to new t & c and I hope the reply from them agrees with me.

I checked my account today and a direct debit has been set up for'esl Ltd'. I cancelled it.

I agree sarebear, i also couldnt give a damn about the CRA mark personally, it is the principle and fact that it does affect quite a lot of others. I hate the whole threatening undercurrent of all their correspondences, their deliberate lack of clarity on the important points, and the fact that they exist solely though a system that allows people to sell and buy debt...lets fact it, anyone selling debt is conducting a firefighting exercse because they dont want the bad rep of sending around the dude with baseball bats, so anyone buying that debt has to enforce scumbaggery to try and get the debtors (or loanees in our case as we havent broken our agreements) to pay up. They are the asshole of the financial market and ultimately ruin many peoples lives...and what for, because someone couldnt afford to pay back some paper money or because some company didnt do rigourous enough checks before lending that cash. They are like the creatures at the bottom of the ocean picking apart the dead whale carcasses that fall down onto the sea floor. The only problem is, they are the nasty end of the financial system, the ones who have to do the ugly shit to force ordinary folks to pay up. As the old bust the door down approach has passed into seeming obscurity for these debt buyers who wish to have a better image, they have to use psychological tricks to get us to pay, and if someone cant pay (or doesnt have to yet in our case), about all they have is the threat of the CRAs. Its rather pathetic really but its about all they have. However, the question is, i guess, should that threat be being used on people who arent in debt and who have kept up every part of their original loan agreement!

@Sarebear78

Yes if you have crossed out any new T&C on the form and even written a letter saying your are not accepting them, then it is ludicrous to claim that signing the form in those circumstances is agreement to them.

I don't quite know who LuckyEskimo4 is saying is claiming that, but it is complete bollocks whoever is saying it.

With clear evidence that you explicitly stated you did not agree and signed only a modified statement, then no court or judge could look at it any other way.

Sounds like typical debt collector lies and scaremongering to those who are gullible enough to believe it.

Yeah - I amended it AND wrote a letter too and have copies so I'd like to see them try to argue it :)

For the newer loans where there was no right to pass to CRA if people have NOT consented then that data should not be passed on, I thought. If I am right then not only could you complain to ICO which might just lose it down a black hole - they get mountains of complaints but you could sue in the country court for damages if you have suffered financial loss. You can do this on line at moneyclaimsonline although if they fight it it will end up in a hearing before a judge.

However you'd have to prove you lost money eg unable to get a good mortgage deal which you would definitely otherwise been able to get.

Just an update from me....
(All my dealings with them have been either by recorded post or email.)

I was deferred by email at the start of May. At the end of May I asked when they would be sending confirmation of my deferment in the post. The response (squished into the usual 'Please be advised that in order to assist you with your enquiry we require your full name, date of birth and current address to pass our Authentication Process' email) was 'I can confirm, customers who have been accepted for deferment, should receive a letter regarding this in due course. '

Two months later....... nowt.

I think if I have to contact them again, I will quote the following from their website at the beginning of all correspondence...

"Regulated by the Financial Conduct Authority, we are committed to maintaining the very highest standards of integrity and professionalism. Treating our customers fairly is at the heart of what we do...."

Good luck everyone!

@erudioed.

I don't think this sale and Erudio has done anything really to change hearts and minds with regard to the Select Committee report into student loans.

Now David Cameron was quite open about how his economic model would follow the Canadian system in the mid-1990's:

www.theguardian.com/politics/2010/jun/06/david-cameron-spending-cuts

In 1995 the Canadian Student Loans Act was replaced by the Canada Student Financial Assistance Act.

en.wikipedia.org/wiki/Student_loans_in_Canada#History

AS Wikipedia states:

"The Government of Canada developed a formalized "risk-shared" agreement with several financial institutions, whereby the institution would assume responsibility for the possible risk of defaulted loans in return for a fixed payment from the Government which correlated with the amount of loans that were expected to be, or were, in default in each calendar year. During this period, the weekly federal loan amount was increased to a maximum of $165."

In short, the government would pay a fixed payment, the institutions would bear the financial risk. That to me sounds quite similar to the 'synthetic hedge' proposal that the Select Committee report I posted up earlier in this thread mentioned with regards to selling off ICR loans to private institutions.

Now continuing on from Wikipedia...

"On July 31, 2000, the risk-shared arrangement between the Government of Canada and participating financial institutions came to an end. The Government of Canada now directly finances all new loans issued on or after August 1, 2000. The administration of Canada Student Loans has become the responsibility of the National Student Loans Service Centre (NSLSC). There are two divisions of the NSLSC, one to manage loans for students attending public institutions and the other to administer loans for students attending private institutions. Defaulted Canada Student Loans disbursed under this new regime are now collected by the Canada Revenue Agency which, by Order in Council dated August 1, 2005, became responsible for the collection of all debts due under programs administered by Human Resources and Social Development Canada."

In short, the Canada Revenue Agency (their HMRC) collects student loan repayments, the NSLSC adminsters them, the Government of Canada finances them.

Unfortunately the amount of student loan debt went up as did the number of people who were deferred from payment. Another aspect that caused that debt to rise was the scrapping in some universities such as the University of Toronto of three year honours degrees. It was felt that four year degrees offered more scope for the development of analytical thinking. The cynic in me at the time thought "Bollocks, it's just a way to get more people into more debt".

(I was living in Toronto and attending the university for a part-time accounting course at the time hence my interest in the subject. I can categorically say that there was a lack of decent salaried jobs in Toronto at the time and you'd get graduates working in Starbucks with no hope of paying their loans back for ages, hence the rise in deferments).

Tuition fees in Canada in 20 years up to 2011 went up by 200%, vastly quicker than inflatation. In the US over 30 years to 2011, it was 400%. In 2011, Canada had about $22 billion of student loan debt. The US... eeks, nearly $1 trillion. Crazy growth creating a bubble? I think we've seen that before...

www.theglobeandmail.com/globe-debate/another-day-smarter-but-deeper-in-debt/article14157421/

With the rise in tuition fees under the ConDems and the cutting of government funding for universities, we moved to a North American model of funding. Now we have a North American debt bubble issue and suddenly there are people shitting themselves about it.

From Vince Cable in that Indie link you popped up:

"“The Government was considering the sale of student loans on the basis that it would reduce government debt. Recent evidence suggests this will no longer be the case.”

Yes, and that links back to the synthetic hedge issue mentioned in the Select Committee report. It's that hedge which means the Government could end up paying out an unknown but sizeable wedge to the like of Arrow if Arrow bought those ICR loans.

What is going on is that finally people are being fucking realistic about the figures and sums used in the analysis of the loans and their repayment. Cameron and Osborne are very happy to get out the party hats with the employment figures going down and Britain's economy getting back to something like pre-recession figures. What the student loans debt demonstrates is what countless analysts have said, namely that the jobs that have been created are of a lower wage bracket. The rise in self-employed people for instance lowers the unemployment figures but the average earnings of those people is lower than the average earnings of employed persons.

Lower earnings = more chance of deferring your student loan payments = less chance of the Government getting its money back.

Lower earnings = private companies want to pay less to buy ICR loans as they are less likely to get a decent repayment rate back

That's why the SC report mentions that synthetic hedge. It's basically an idea where the Government subsidises a private company for the loans it bought.

The BIS Select Committee aren't electioneering, they're stating the facts as clearly as possible and it's those media politicians like Cameron who will stick their fingers in their ears and bury their heads in the sand about it. The financial model is utterly screwed and a lot of that is down to grossly optimistic figures about the level of repayments that would be forthcoming.

Really the Erudio sale is a pretty small drop in the ocean. Us older loan takers are more likely to be in a higher paying job than the younger people with ICR loans. Those ICR loans could be hugely toxic and far more problematical. What makes it even more troublesome for the Conservatives especially is that soon you're going to see a huge explosion in student loan debt at the end of the 2015 academic year. The £9k fees came in place in September 2012. 2012-13, 2013-14, 2014-15 academic years, so come the summer of 2015 when those three-ear students graduate, we're going to see just how many can find decent salaried jobs and repay, and how many will be filling out their deferment forms.

PS: Sorry for the Godzilla-sized post!

'course, it does beg the question how one Government report can be so over-optimistic about calculating how much we could get from selling student loans yet be so cautious (well, deceitful really) when it came to selling off Royal Mail...

#servingthefinancialsectoranddoingwhattheywant

Incidentally, the Indie was reporting this back in February...

www.independent.co.uk/student/news/hated-9000-tuition-fees-might-not-save-any-money-says-report-9278477.html

The BIS response:

"The Department for Business, Innovation and Skills said: "As a result of our reforms, a greater proportion of students from disadvantaged backgrounds are going to university than ever before. Our universities are well funded for the long term and now receive around 25 per cent more funding per student for teaching. These figures for repayments are estimates and based on a prediction of economic circumstances some 35 years in the future. They will continue to fluctuate and do not present an immediate pressure on the system."

That was in April 2014. Three months later, it's a markedly different story. Funny, very funny.

Very interesting, its a shame it wasnt longer actually.
I still dont quite understand why your very informative case suggests the Erudio debacle has had no impact though, but i agree its a small drop in a bigger ocean. However, when one department (BIS) is overrun with calls and firefighting exercises for a company that lied to them and were then forced by BIS to admit that lie, why that wouldnt be spoken about in relation to selling off student debt (being the first real world full case study), i think that has to have some influence, however minor. But i also know philosophy or ideology usually wins over a few hundred thousand peoples problems, so you could be right.

BIS haven't admitted shit really when it comes to the Erudio sale. If you haven't, read this:

www.publications.parliament.uk/pa/cm201415/cmselect/cmbis/558/558.pdf

I don't think BIS fought fires at all. They washed their hands of it as shown by the anaemic responses given by them quoted in these threads. Any complaints were not their problem and that is the overwhelming impression I have of this sale. Everything now lies with Erudio.

In that BIS SC report, the Higher Education Policy Institute is mentioned. They carried out analysis in 2012 that said the RAB charge (the amount of student loans that would never be repaid) was aroond 40%. The Secretary of State, BIS, and the IFS disagreed.

At the time of the BIS SC report being produced, the Government was now talking about a RAB charge of 45% although 40% appears to be the agreed figure. Why the change? Because the projected growth of earnings in line with inflation has not happened and does not look like happening. That fucks up the calculations immensely.

In essence, the BIS SC report nails down the idea that for every £1 of student loan cash given out by the Government, there will be 40 pence repaid. Between 2008 and 2011, there's apparently £6 billion worth of loans. With a RAB charge of 40%, that would represent £2.4 billion quid never paid back.

£2.4 mofo'ing billion out of £6 billion. We ain't talking back of the sofa change here.

The Erudio sale didn't wake BIS up. Actual real relevant information did. The figures were wrong. The calculations inaccurate and people finally woke up to the fact that the Government would be pissing out billions in student loans and that the pisspoor growth in average wages as inflation rises means it would be unlikely to get more than 60% of everything it paid out each year back.

I said a few weeks ago that all we can really do is to press Erudio and to make sure nobody gets screwed over by them. I stick by that. Until the FOS gets a mass of complaints about Erudio, we have to wait.

Amusingly, I received a letter from Erudio this morning saying that they had registered my complaint and would respond within eight weeks.

The irony is that I haven't actually filed my complaint. I told them by telephone it would be done in writing. it sounds like there is a great deal of firefighting within Erudio now.

Yep, there certainly has been a lot of firefighting at Erudio. I wonder if we have even put them off chasing up all those others who have done a runner thus far. In fact, i imagine it to be a rather bleak place to work at those Capita/Ventura megacenters..but then again, when i was reading around before, they believe in really making their staff feel part of a team that is them Vs the world. Could be bullshit and they treat everyone like dogshit but i guess you have treat people who have to be nasty rather well.
BIS certainly back their decision in public, of course they do, to them the sale is the important thing. How the company they sold the loan to is handling it isnt really their problem. That was until a shit storm emerged in BIS student department when we all started to realise the gravitas of what had happened and peppering them with complaints and phone calls. But i know for a fact Lewy was continually getting calls from BIS during the direct debit stealing debacle and just before. Erudio being so hesitant about certain things and giving way on a number of issues pushed by us in the forums was definitely pressure exerted more by BIS. Without that pressure though (and the MPs i guess, and other pieces in the press by Simon Reid etc to a lesser degree) nothing would have changed and we would all have been steam rollered. As you said before though, there are bigger waters. But the ones you suggest sticking to concern the main fight where we have had a real effect, the only fight we can realistically have any influence on. The one to get them to play fair every year so we dont have to spend hours every fucking week thinking about shit that should be effortless, take 30 mins work and unproblematic.

I can't keep up with this thread, it's a few weeks since I checked it!

Erudio ignored my letter and evidence requesting deferment (it was based on the template going about). They sent me another copy of their form, which I (perhaps unwisely) ignored. Now I've had a letter saying I'm a month in arrears, and they took another month by DD (I've since done an indemnity claim on that one).

I've now written again telling them to either process my deferment based on my previous request (back in April), or to start a formal complaint. Is there anything else I should do at this stage, or just wait for the muppets to reply? Should I do a CCA request?

One or two people are saying online that they've successfully deferred without completing Erudio's form, but it seems the majority of us are still fighting them?

@erudioed.

The debate on student loans has already moved on.

www.theguardian.com/education/2014/jul/29/universities-responsible-student-debt-david-willetts-proposals

www.bbc.co.uk/news/education-28528824

The top universities will love the idea. In their mind an Oxbridge graduate could reasonably expect to earn more in their first graduate job than someone graduating from a university right down the list therefore the Oxbridge universities could charge a greater tuition fee.

The i newspaper detailed that universities could go into partnership with hedge funds investors and pension fund investors to fund these loans. Hmmm... someone like CarVal Investors could get right in there and already have something in place for managing those loans when it comes to repayment time. Essentially it'd be privatisation of the loan process, we'd end up with the equivalent of Nelnet and Sallie Mae in this country, and there is no doubt that fees would go up and up with a corresponding level of student debt.

The US has over $1 trillion in student debt now.

www.forbes.com/sites/specialfeatures/2013/08/07/how-the-college-debt-is-crippling-students-parents-and-the-economy/

@erudioed (again!)

The BIS Select Committee report really damned both BIS and the SLC for a lack of data on debtors. One wonders if the loans themselves were sold to Erudio/CarVal et al and the information supplied to the consortium was somewhat dodgy itself. I suspect that Erudio themselves thought it'd be a damn sight easier than it has been to get money back from people.

"But the ones you suggest sticking to concern the main fight where we have had a real effect, the only fight we can realistically have any influence on. The one to get them to play fair every year so we dont have to spend hours every fucking week thinking about shit that should be effortless, take 30 mins work and unproblematic."

Exactly. The bottom line for our loans is that there is this threshold and we need to ensure that everyone under it gets deferred. Going by the posts on these threads, the greatest problem I feel is for those people having benefits included as part of their income. There is an awful lot of grey area around including these benefits and nothing Erudio has done in my case, a comparatively simple one, gives me any belief that they are capable of handling the ins and outs of benefit calculations.

They were very interesting, it sounds like acts of desperation to me. Anything involving selling and buying debt is doomed to fail somewhere along the 'value' chain. You would have thought they'd just take the tried and tested old methods that work very cleanly, which is debt cancellation! Thus sending all the vultures who prey on this area of debt spinning upwards into their thermals, never to return to planet earth again. But then again, terms like debt cancellation and nationalisation seem to have vanished into those thermals, especially as we now have a bunch of self-interested wanna be businessmen/millionaires masquerading as politicians.

I think the biggest problem is Erudio moving the goal posts by changing the T&C. This is surely the thin end of the wedge as they ratchet up the pressure to get people to repay.

We all had it pretty easy under the SLC, they were quite laid back about it all, and we've got used to that. Erudio are clearly taking the hard line on everything, and pushing beyond their remit where they think they can get away with it by bending the rules.

It sounds like the vast majority of current deferers have completed and returned Erudio's form (either without realising what they're agreeing to, or under duress as their existing deferment is about to expire).

I'm willing to bet that the next step is Erudio will sell data to Experian about the state of our loans (en bloc, that's what the new T&c were about, to bring them all into line with the pre 98 loans). Loans that are deferred will be reported to the CRAs as on 'payment holiday', as the credit reporting systems aren't setup to deal with deferred student loans. But payment holidays are bad (in credit reference terms), they are basically saying that you couldn't afford to repay and made an agreement with the lender rather than going into arrears. So its a black mark against you in credit terms. And that's strong, but indirect encouragement for most people to repay sooner/quicker than they have to.

As i have said before ekim, Arrow are actually in business with Experian, via the Experian Collections Network. If you can find the nature out of that relationship, you will get an answer to your suspicion that i for one would certainly like to hear.