"New style" student loans question

[purephase]

Hi,

I am the proud owner of a large new style student loan. I started repayments on this in late '04. In mid '06 I moved jobs, and ceased PAYE on the loan (HR didn't tick the box on my P45 and I didn't chase). At one stage I phoned SLC about this to find out how to start this up again and enquired about my balance (this was in late '06). They told me they had received nothing from HM Rev and customs. I know I have paid at least £2800. The other weird thing is that they have sent me nothing, not even a statement since my final statement when I left uni in '03.

Disillusioned, I made no effort to re-start my PAYE, choosing instead to save the money. However as the interest rate on the loan has now risen to 4.8%, I am now considering restarting payment.

If I phone them, will they demand full payment for the time I have lapsed, and will they have just cause to do so? Is it worth me holding out 12 years to try and get rid of it?!

Thanks

[noomill060]

Why do their work for them?

Just keep putting the money away as if you were paying them.

With a bit of a search, I'm sure you could get a better savings rate than 4.8%!

A Student Loan is the cheapest credit you will ever, ever get, so dont be in too much of a hurry to pay it back.

You will get a letter from them eventually, and have to pay back what you owe them, assuming you earn over the threshhold, but in the mean time, put their money in a nice high interest savings account and simply pocket the interest for yourself.

[noomill060]

If you get to age 50 before they ask for it back, you will have a nice little nest egg all for yourself.

(And yes, you will get to be 50 years old one day (with a bit of luck!)

[noomill060]

But in the meantime, count the days until six years have passed since your last payment, and practise these words:

" Your honour, this debt is Statute Barred. In counterclaim I claim £50 expenses from SLC for this appearence and £xxxx as damages for harassment"

[rory32]

If I phone them, will they demand full payment for the time I have lapsed, and will they have just cause to do so?

These loans are income contingent so they couldn't demand full payment. I assume you are a contractor as you are able to opt out of PAYE, if you are not then you will eventually be served with a huge tax bill.

But in the meantime, count the days until six years have passed since your last payment,

These loans are not governed by the 6 year rule. CAG does not and never will advocate debt avoidance.

[purephase]

Thanks for your answers rory and noomill060.

rory32 - I'm not a contractor. I missed having my PAYE transferred as my previous employer didn't tick the box that permits this on my P45. I figure the only reason I haven't been asked to pay is that SLC are badly run, hence my getting no statement since '03, and no chase for what I could be paying.

I was staggered that the £3000 I know I have paid to them hadn't registered in my account, and frankly dubious about transferring any more cash into this "black hole". I'm not proactively trying to avoid the debt, but am I actually obliged to pursue a creditor who isn't seeking payment?!

I calculate I would be paying a min of around £500/month now, so was just a bit worried if they chased me for this amount backdated for 18 months!

Oh and could you explain the tax bill thing? I though loans were out of post-tax earnings - why would that affect my bill?

[rory32]

The loan is out of post tax earnings. I may have misinterpreted your post as it appeared you had been allowed to opt out of PAYE (something you can only do under certain circumstances).

You obviously don't need to pursue a creditor who isn't seeking payment and there is no legal basis why you would. That being said I would want to know where my £3000 has gone as you obviously don't want to pay any more than you should and the £3000 that hasn't been recorded will be acruing interest.

Realistically I think you need to get in touch with HM Rev and customs and find out what has gone wrong.

[purephase]

Thanks Rory... I hadn't really thought of talking to hm rev. Will do that, rather than contact SLC.

I don't think that I have been "allowed" to opt out of the PAYE payments. There's no reason why I should. Rather I think the whole system broke down when my last employer missed a box on P45... ah well!

[noomill060]

"That being said I would want to know where my £3000 has gone"

Yes indeed, rory, so would I.

As you now realise, I wasnt advocating debt avoidance, merely pointing out that it isnt the borrower's role to chase a creditor.