Starting Repayment - Will I Have To Backpay?

[Jam Banjo]

I've just been reading the advice on Martin's Money Tips about Tax rebates and realised I should be repaying my Student Loan, I am paid more than £15,000. I assumed that the student loans company took it directly once you passed a certain threshold. I have paid in the past but took a new job at a much lower rate for a few years and have now built up past £15,000 again.

 

My question is, when I get in touch with the SLC will they expect me to back pay for every month since I have been paid over £15,000? As I definately cannot afford that. I am currently on a Payplan scheme paying back creditors and am trying to get to a point where I have enough surplus earnings to apply for an IVA. I can afford the amount worked out on the tax calculator I guess, but worried they will suddenly take a few hundred quid out?

 

Thanks for any advice you can give me.

[reallymadwoman]

Are your student loans the old type or the new type? Are you sure £15,000 is the threshold - I'm sure it was around that when I started paying mine back about 10 years ago.

[Sol]

It's £15,000 for post 1998 loans and around £24,000 for pre '98 loans

[reallymadwoman]

Why would the limits be different? Oh, silly me, it's so the government can get more money out of us of course.

 

Assuming the loans are the new type, I'm afraid I can't help. I only know about the old ones.

[Jam Banjo]

Hi thanks for the replies so far.

 

I started Uni in 1998, I always thought it was £24,000 threshold which I am below. Glad to know that figure came from somewhere and I didn't make it up!

 

But it seems I'd be on the new £15,000 threshold loan? Any help would be massively appreciated.

 

Thanks!

Edited November 19, 2009 by Jam Banjo

[reallymadwoman]

Check on the student loans website to find out exactly what type of loan you are on - I have a feeling the change was in 1998, but I'm not certain.

How did you pay student loans in the past? If the money was taken direct from your salary then you're on the new type but if you had to pay by DD then it's the old.

Incidentally, even if you are below the threshold for payment you do have to apply to have the old type of loan deferred, and if you don't (or they don't get the form) you will have arrears showing.

Again if it's the old type, exactly how many years is it since you last paid? If it's more than 6 (or 5 if you're in Scotland) it may be statute barred anyway.

[Jam Banjo]

Thanks for your reply

 

I definitely used to just have deductions from my salary. But when I moved jobs to the much lower salary (round £10,000) the deductions simply stopped and I assumed the whole system was automatic.

 

So if I contact them now saying I have been earning over £15,000 for a couple of years I will have arrears for then and also since I moved jobs? That doesn't seem fair if I was earning less than the threshold?! I still have payslips and stuff to confirm my previous salary.

[reallymadwoman]

It seems that your loans are the new style ones, and I have no idea how these work if your income drops etc. Is there any information on the SLC website, or any threads in this forum about new style loans?

 

Alternatively maybe someone who knows what they're talking about could post some advice, please?

[Sol]

Yep you're on the new style loans.

 

It should happen automatically, but occasionally it doesn't. Speak to your payroll dept about it or the HMRC as they collect the money and send it to SLC each financial year.