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

A FOI request a friend submitted to SLC requesting copies of publicity material, adverts, press releases, promotional leaflets etc in relation to pre-1998 loans has been answered.

Doesn't appear on SLC disclosures site however, www.slc.co.uk/freedom-of-information/freedom-of-information-disclosures.aspx

A couple of booklets were released to friend all from 1998 onwards...

SLC say they don't keep any marketing information/releases for longer than 7 years.

The request was in relation to trying to prove that the loans were specifically marketed with the promise that your credit rating or ability to borrow in the future would defintely not be afgected by taking out a loan.

Anyone on here who has access to LexisNexis press database would probably be able to view newspaper articles from the loan introductory period and see what the Govt were saying - I suppose there's also the British Libray newspaper library in North London too but that's beyond my reach.

just passing on a message: Martin Lewis from MSE will be on BBC5live today, with erudio being an issue up for discussion (not the only issue though).
Here is the link if you have questions for him or to show support for him talking about it at all:
twitter.com/MartinSLewis/status/499809716026228736

Coffers that page is interesting - looks like people have been trying to ascertain the calculation method before, although SLC is typically evasive

Response
I can confirm that the deferment level is calculated in accordance with the definition of “deferment level” as provided by the Education (Student Loans) Regulations 1998:
“deferment level” means 85% of the lender’s estimate of average monthly earnings of all full-time employees in Great Britain for the January when the level will apply based on figures published by the Office for National Statistics, or if that Office ceases to publish relevant figures, any other published figures
The Student Loans Company Limited (“SLC”) does not calculate the deferment level. The deferment level is calculated on an annual basis by the Department for Business, Innovation and Skills (“BIS”), who notify SLC of the deferment level accordingly.
If you wish further information on how the deferment level has been calculated or any supporting documentation, I would recommended contacting BIS at [email protected].

I am interested in marketing material as I'm sure loans were 'sold' as interest free, which since they brought in CPI after introduction of loans which remained based on RPI I don't think they can now be classed as interest free.

LittleMissGreen I also thought that the loans were sold as interest free.

I wish I'd started uni a year later and been on the new style loan. It would have been paid off at a fairer rate in proportion to my income once over the threshold. In fact, if I could go back I wouldn't have done my degree at all. It hasn't benefited me financially or career wise in any way.

There is a debate about the lowering of the threshold on here. Sadly many people seem to be missing the point as to how mortgage style loans work.

i dont think people are shocked the threshold goes up and down, it does every year. The shock is by how much and that that amount seems all to convenient to our arch enemas, sorry, enemies.
Lets be honest, the threshold is pretty big, and it does go down sometimes. If i had earned that much personally, i could have paid my whole loan of in a year. As it is, i didnt, never have and doubt i ever will.

I wasn't told mine were interest free, I was told it was a maximum of 0.5% because at the time I asked what would effect that figure, I was told nothing it was a special rate that would never change to help people like me study and if I didn't earn enough it would be written off.

There have been other threads about Erudio on MN where people have had a but of grilling over this situation, it's because the loans after were totally different and they don't understand that. They also don't understand their loans can be paid over a much much longer period and they weren't told it wasn't a 'proper loan' I've not posted on that thread, last time I got involved I got flamed as well. I did pm the OP and suggest they come here for some discussion.

And here I am :) I'll read the full thread later.

I will admit to being shocked the threshold goes down as well as up. For years I was so far under it I never noticed what it even was. It's only the last 3/4 years I've known I was close but as it seemed to go up slightly every year I just assumed that was always the case. Foolishly as it turns out.

Or rather, misguidedly.

Hi Rumbelina, welcome to this happy forum celebrating the wonders of debt purchasing.
I wonder if you read the other 2 threads with another 2000 posts from the early 'total shock' days...if yes, let us know and i'll send an ambulance round later to pick you up.
Seriously though, welcome! And hopefully you will be doing the limbo under the threshold until your account literally disintegrates in front of your very eyes in a few years time.
We still have the settling short period to come when Erudio would sooner have something than nothing, and all other kinds of wonders, so buckle up and get ready for the ride we will all be taken on for the next 10 odd years.

Hi erudioed. I don't think I'll attempt the other two threads but I'll give this one a good go!

I'm actually going to be over the new threshold = £180 per month to pay (to a hateful company) just as we are about to apply for a mortgage, which I'm already quite anxious about. That's why I started the other thread but it turns out I'm just a scrounger who should have paid my student loan off regardless of my financial situation and the fact that I was eligible to defer didn't mean that I should have.

Anyway I'll be back to discuss further....thanks for the kind welcome.

Ive just heard about someone else who has had a DD taken in the last few days after being defered, so just a quick heads up to everyone.

@rumblelina

That's a pity, if its benefits / child maintainence/ savings whatever etc pushing you over threshold just have them re assigned to the person who does not have the loans :)

@ erudioed - "i dont think people are shocked the threshold goes up and down, it does every year. "

I have to say I'm definitely shocked by this move. I've had loans for the best part of thirty years ( and yes my memory may not be what it was) but as far as I recall, the threshold was always a bit like public sector pay... it might not go up BUT it never goes down.... like council tax too...

I don't remember the threshold EVER dropping before.... would anyone have stats on that?

It seems likely to be more than just a coincidence that in the year the loans are sold off, after Erudio have harvested all of the data on borrowers incomes, the threshold for the first time falls .... and by a huge amount - roughly £2k or 7% ish.

I'd stake my reputation on there being a line graph on the wall at Erudio head office showing average borrower income and likely increases going upwards and another line showing repayment thresholds going downwards aand with a big golden star where the two lines meet and suddenly buying all those debts becomes gravy. Next to a picture of a grinning Vince Cable.

I certainly don't think the current economic circumstances should only have this unique effect on student loan repayment thresholds - surely the same guidance should allow reductions in MP remuneration, etc etc

I call FIX!!!

I read somewhere on MSE think that the threshold did go down once before in the last 10 years but it was by a much smaller amount. It was while I was self employed though and way below the threshold so I guess I didn't notice. Whilst I was working pre-children though I know it never went down as I was always given a payrise that left me just under the threshold - by chance not design.
Not sure if I said before but I am concerned that this drop puts the threshold very near the universal credit. Any further drop and it looks like they are targeting borrowers with children who are claiming benefits...
I have written to my MP as I think it very fishy that everybody else is reporting salaries will rise yet BIS think they will fall. Erudioed did Martin Lewis shed any light on this on the TV yesterday?

Thanks LMG - I'll have to dig out my old annual SLC statements - I wasn't aware of the Universal Credit issue - it's too obvious not to be intentional.

So, either don't claim benefits OR pay your loan back - hand in hand BIS and Erudio - lovely!

It seems unlikely that a £2000 adjustment can be possible in one year when there was no reduction the previous year!

Has the economic climate changed in that compressed period?

Perhaps only in a way that BIS can (il)legitimately bullshit about

Empty this is what BIS have told MSE the deferment thresholds were...
2005/06: £24,137
• 2006/07: £24,412
• 2007/08: £25,287
• 2008/09: £25,936
• 2009/10: £27,050
• 2010/11: £26,449

"Myth

Student debt will stop my child getting a mortgage or other loans

Fact

Student loans are unsecured lending from the government and are very different to credit cards or
commercial loans.They don’t go on credit files and don’t show up on credit checks"

Student Finance Wales is a service provided by the Student Loans Company."

class="underline">1415en_d.pdf

"Myth

Student debt will stop my child getting a mortgage or other loans

Fact

Student loans are unsecured lending from the government and are very different to credit cards or
commercial loans.They don’t go on credit files and don’t show up on credit checks"

www.practitioners.slc.co.uk/m...t_1314_d_b.pdf

So even today the SLC in their marketing is claiming that Student Loans do not go on cerdit files or show up on credit checks...

@ LMG - just checked though SLC old letters/statements and MSE figures are on the money.

One would expect, if the calculation method is consistent, with the current booming economic climate, that wage inflation for the following year could be expected to be quite high - and we should see a stonking increase in the repayent threshold at that point for 2015/2016....

Mind you... Vince Cable will probably be signing on by then and won't give a monkeys (no change there then!)

We'll have to see what the 'new' masters of BIS come up with and how they interact with Erudio.

Has anyone ever had a reply to a CCA original agreement copy from Erudio - just realised I wrote at beginning of April and got a holding letter in May promising a response in due course!!!

Is 4 months an unreasonable amount of time in which to produce a copy of a credit agreement?

@emptycoffers

I got my CCA's after about 7 weeks!

@littlemissgreen,
Martin Lewis thought the decrease was just a coincidence in it being the 1st year after the sale but he did say BIS have so far refused to provide the actual figures they used for this specific calculation to get a £2000 drop...he also asked a person from SLC on the BBC show but they also didnt know what BIS had used. That he did think was odd because BIS engaged with his MSE site about the decrease but didnt give them the actual figures used when probed.

its worth listening to actually if you can find it on the BBC website, i thought he was very good in his Erudio bit. The BBC said they were trying to get Erudio to come on but it didnt happen...not a surprise considering they dont really exist.

@emptycoffers They must have lost the April requests as I also asked in April and got a holding letter too but no CCA yet! - Also have had no reply to my complaint or my SAR . I have a complaint with the FOS about the first two of these and will be taking another complaint to FOS in 8 weeks about the latter of these (as complained to Erudio about lack of response last week after waiting for the time limit).

Also if it shows on my credit report or if any money disappears from our account into theirs while I am in deferment then complaints will follow..... I never loved complaining so much :)

@ LittleMissGreen Apparently the 2009/10 and 2010/11 earnings figures were skewed by lots of canny higher rate taxpayers shifting their 2010/11 income to 2009/10, to avoid the new 50% tax rate. Explains the relatively high deferment level in 2009 and the one and only reduction (down 2%) in 2010, which makes the latest 7% cut look even more suspect.

The Institute of Fiscal Studies said that the fall in household income due to the fall in earnings in 2010 was the single largest one-year fall in income since their records began in 1962... I'd love to know what they make of BIS's latest estimate at more than 3x the fall in 2010? Honestly, BIS must think that if we're not Oxbridge-educated, cigar wielding male toffs, we won't notice how seriously fucked up their calculation is. With such a big fall in the deferment level, I think all affected borrowers are at least entitled to an explanation of what's caused the drop, because it's clearly not down to a huge fall in earnings.

I put a mailing list/email up on MSE for contacting the media about the deferment drop, I'll not clog up the MN thread with it as it's not exactly short and to the point, but if anyone wants to send it or make use of the mailing list, it's posted here:

forums.moneysavingexpert.com/showthread.php?p=66270892&highlight=erudio

Heres Martin Lewis on BBC5live yesterday, the Erudio bit start around 24mins in...just 6 days left: www.bbc.co.uk/programmes/b04d4k7t

I have been reading some of the comments on another thread about Erudio.
There was a comment about Ombudsmen and legal decisions. In my professional opinion, an Ombudsmen decision is not the same as a legal determination. In fact, in some cases Ombudsmen make decisions that conflict with the law. The reason is that Ombudsmen usually make decisions on what "they" deem fair and reasonable within their "scheme rules". This might be alright in some cases, but for a strict legal interpreatation of the law a decission of a court is needed.

I am that lawyer mentioned from the Legal Beagles site. I am finding this topic fascinating and I am happy to give my views on the issues surrounding Erodio etc without charge. If a case is strong, then I am prepared to help people bring a case on a CFA.

If you want my contact details, then send me a PM.

Anthony Reeves