Erudio Student Loan End Date

[user1474557645]

A few years ago Erudio took over the loans from the Student Loans Company (probably bought each one for a few pence). I've found Erudio to be a pain to deal with, for various reasons.

I've never reached the threshold for repayment, and I knew that eventually the student loan debt would be cancelled (though it isn't clear whether at that point it is cancelled in the sense of "totally cleared and wiped" or cancelled in the sense of "get marked as a defaulter with credit agencies" - I suspect with the old SLC it would have been the former, but with Erudio the latter - would love to know for sure.)

I did offer Erudio small settlement figures since I'll never earn enough before the loan is cancelled to have to start paying it back. They refused my offers. Fine, their loss.

However, I wanted to know the exact date when the student loan is cancelled. I could then look forward to the first year of not having to fill in their painful deferment forms.

I emailed them last week to say:

^"Hi,

Please can you tell me the exact date when my loan agreements expire, and my connection to Erudio is therefore ended?

I realise I’d have to make some repayments before that if I reached the threshold for repayment, but that is incredibly unlikely, since my income has gone down year on year. I had offered settlement figures in the past (someone offered to clear the debt for me – a decreasing amount offered each year) but I was refused by Erudio. Which is fine by me.

Many thanks,"^

Their reply a few minutes ago said:

^"Thank you for your recent email.

The maturity date of your account at the moment is 29th June 2022.

This date will increase by twelve months every year the account is deferred.

If you require anything further, please do not hesitate to contact us."^

WHAAAT! They seem to be saying for each year of deferral, they add a year to the end date - so you'd never reach a point where the debt was cancelled!

The agreement text from 1995 said:

8. Cancellation of Repayments
The present regulations provide for (a) cancellation of repayments if you die and (b) cancellation of repayments (so long as you are not in breach of any obligations to us) if (i) you are aged under forty when you last enter an agreement to borrow from us and you attain age fifty or all all or part of your last borrowing from us has been outstanding for at least twenty five years or (ii) you are aged at least forty when you last enter an agreement to borrow from us and you attain age sixty.

So: can Erudio keep the loan active forever? Or will it one day cease to be a millstone around my neck? And what happens at that point?

Thanks!

Do you meet one of these criteria?

Not yet - I'll be 50 in 2022. One loan was from 1995, one from 1996. Which suggests the first should be wiped in 2020 (25 years), the second in 2021. I wanted to clarify exactly when the loans will be wiped, and what will happen then.

However, the bigger issue is their wording:

"The maturity date of your account at the moment is 29th June 2022.
This date will increase by twelve months every year the account is deferred."

Which suggests it will never be wiped, because when I defer next year, they will add 12 months to the "maturity" date. Surely that's not allowed?

Sounds illegal to change the terms of the loan so drastically to me. I have no idea what you can do about it though. You might have more luck asking for advice on the MSE site.

Just for information in case it is useful to anyone else.

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In response I asked Erudio:

"1. The ability to extend the date when the loans will be wiped was not part of the original agreement, so has Erudio changed the rules? Deferments are allowed, and shouldn’t affect the loan’s cancellation date. I did not agree to any such change. Has it changed for everyone? If so I need to publicise that.
2. Also: one loan was from 1995, one from 1996. Which suggests the first should be wiped in 2020 (25 years), the second in 2021. So why is the date you gave in 2022?"

They replied with:

"Thank you for your recent email.
We can confirm that the maturity date has no relevance to the cancellation rights you have within the terms of your loans.
The stipulation in your terms & conditions is that if you have upto 4 loans you are due to pay the balance over a 60 month term. When you defer your account you are not due to make any repayments and as such your 60 months payments term does not begin until you exit from deferment. Each time you defer the account the maturity date moves out by 12 months to take into account the 60 month term not having begun. This is not a change to the original terms & conditions of your loans.
As you have continually deferred your account your maturity date has changed each year from an initial maturity date of 2003 to now being due to end on 29th June 2022. This is indicative of when your final payment would be due should you not be eligible to defer your account after your current deferment period ends.
In relation to your second point, your loans are not cancelled at different points based on when they are borrowed. The cancellation rights are relevant from your last borrowed loan.
If your account remains up to date with no arrears your account will be cancelled on 04/10/2021. This would be under the 25 year cancellation right.
Should you have anything further queries , please do not hesitate to contact us."

It's because they combined your loans, like mine into one figure and set the 25 year write off as late as possible, I can't find it now but I know people have had difficulty getting them written off. I don't know what happens to your credit file. I've been refused credit/ability to open an account due to having a loan in 'long term payment holiday' which is how the loan shows on my credit file because erudio register the debt.

Erudio claim it doesn't effect anything, however, it definitely does. When I was being assessed for direct payments for a carer I (and my social worker) were informed by erudio they would take that money in payment for my loans even though legally it was for a carer as it wasn't excluded under the loan agreement (because direct payments didn't exist back then) and was income.

I fully expect it to register as a defaulted loan on my credit file when it gets written off (long term severely disabled and will never earn again, unfortunately) given the problems I've already had.