Student Loan repayment history to appear on credit reference files

[car2403]

Here's a brief from a reputable credit reference file checking service; (sorry, I can't name it as it's a commercial site)

 

The Student Loans Company’s new online Repayment Portal is now up and running, giving millions of students long awaited access to up-to-date balances.

 

Until recently, a simple annual statement has been the only way of keeping track of how student debt is either building up, or is being repaid. The new online system gives access to up-to-date balance information and the ability to make online repayments.

 

It’s not all good news unfortunately. Thousands of older borrowers from the SLC continue to face the prospect of seeing their student loans appear on their credit files.

 

An official announcement from the Government is awaited and is expected to confirm that student loans taken out on the old system – for loans taken prior to 1998 – will be shared with credit reference agencies and made visible to lenders later this year. Only negative information will be shared. Regular and on-time payments won’t be made visible.

 

Those students who took loans prior to 1998 are responsible for making payments each month, whereas those on the newer system simply have a percentage taken automatically from their wages each month once they reach a certain threshold of earnings.

 

Any late or missed payments recorded onto a credit file will have a negative impact on that individuals ability to get other forms of credit in the future - in the same way that missing payments on a standard personal loan does.

 

The move is not without risk for the SLC, as it has not routinely sought consent from its borrowers to disclose to credit reference agencies as to how loans are being repaid. It is likely that the SLC will restrict the reporting to defaults, where it can claim that the ‘customer/lender relationship’ has broken down and where a default notice served in accordance with the Consumer Credit Act 1974. Even this is a grey area, and if the SLC attempts to go further, for instance by reporting missed payments, it runs the risk of being in breach of the Data Protection Act 1998.

[noomill060]

Worrying.

 

(For SLC!)

 

Time for everyone to write to SLC, expressly denying consent to process their personal data to CRAs,

[veester]

Does this also amount to a breach of contract by the SLC?

They are varying the agreements of the loan without express permission of the borrower? Thus its an unfair relationship?

 

Funnily enough i am about to go to court against the SLC for non-payment.

 

The DCA at the SLC won't take into account my long-term illness and give me an relief in the repayments.

 

The letter i got stated, "we will apply for default and to register details with CRA and it will make credit difficult to obtain blah blah blah".

Edited September 26, 2008 by veester
ommision

[studentdebtsRme]

If you were ill and weren't working why didn't you ask for a year's deferment? They let me when I was really ill.

[veester]

I did - this is about the arrears that have built up over time - when and as my cost of living was/is to high to sustain making any payments.

[noomill060]

Different tack-

 

So, SLC are now going to play at being a proper, grown up consumer credit licence holder and process data to the CRAs.

 

OK, first off, the Act that set up the SLC limits the period that borrowers can apply to be deferered to three months.

 

SLC are expert at "losing" such applications, so people could end up getting neg credit reference, simply as a result of SLC's numpitude, not of any action by themselves.

 

Borrowers are entitled to deferment if their earnings are below £15k, but the burden of proof is on the borrower.

 

This turns the law on its head. In any other contract, the burden of proof is on the creditor to show that the debt claimed, is owed. The debtor doesnt have to prove that it isnt.

 

In other words, SLC assumes you should pay, and unless you can show them that you earn less than £15000 , SLC will hassle you for arrears, levy unlawful penalties for letters, etc, and then tell the world you are quite definately, a debt defaulter, not to be touched, even by barge pole.

 

And if THEY lost your deferment application more than 3 months ago, there is not a damn thing you can do about!

 

This cant be considered either fair or (as you never gave even implied consent, nor did they ever ask for consent) fair processing of data.

 

Once they start using their Mickey Mouse Stalinist powers, it going to become expensive for them, when people start taking action against them under Data Protection Act.

[veester]

noomill - i look forward to attaining your input when my court papers arrive, as i intend to take the stance much in line with your argument.

 

Allright with you?