New (post '99) Student Loans Company debt - Living In Australia

[SLCedy]

Hi all

 

Great resources and posts here, you've helped many people, hope you keep up the excellent work.

 

First off - apologies - I've deep dived into the forum as much as I possibly could over the last couple of days but it is vast! I couldn't see anything matching my situation exactly. I also hope this is the right place to post - it was a toss up between overseas debt and student loans.

 

I am a "Pom" living in Australia - emigrated about 10 years ago. Up until about 18 months ago I was a fairly good (if a little reluctant ;-)) Student Loans Company "patron", filling out my income assessments each year, started paying when my income went over the threshold. Yes - a few times I got into arrears and didn't always pay each month. During those times I had pre recorded phone calls and messages etc from "debt collectors", but essentially I would always clear the arrears and they always went away, after some stern tellings off.

 

Times have been hard recently though. I've been sole income provider for my family for some time now and have copped some other "part of life's rich tapestry" unexpected expenses and events and have been struggling with my Aussie debts and mortgage, let alone the SLC one I still have reasonable earning power which looks OK on paper (which is essentially all that they look at), but circumstances are not very rosy. Interestingly they haven't hassled me much. The last payment I made when I was in arrears I explained my situation and that I was in some financial strife. They were totally unsympathetic, I felt very belittled on the phone (after being on hold for an eternity to get through to what I can only assume was a scottish, female version of Hitler) and I basically paid back the arrears in a couple of instalments after taking their medicine. My Australian credit card provider lapped up the big payment of course!

 

That was a good 18 months to 2 years ago now. I haven't rung them or contacted them in any way since - rightly or wrongly I decided that I couldn't pay the exorbitant amount they were demanding per month, they wouldn't negotiate on it, so I decided to focus my efforts on getting myself out of trouble financially in Aus first (wolfs at the door), with the intent actually of getting a personal loan over here to pay off the balance of my student loan when I'm able to. I have ignored two requests for income assessments. I have had no threatening phone calls or letters (which I have previously had). I did get a letter telling me my default payment seeing as I hadn't filed my income assessment (which incidentally was less than the calculated amount I think!)

 

I'm quite sure it's only a matter of time, perhaps even very short time before they take further action. But what is that going to be?

 

I'm not a legal eagle - I'm a bit confused by my research on this forum. On one hand I see a long thread about Barclays debts being sold to Aussie debt collectors and there being no case to answer to. But I understand that this is governed by a CCA and that essentially you need a CCJ issued to an address in the UK before it can be taken through the legal system over here. Also understand the data privacy issues with selling a debt to another country etc. all of which makes it hard to chase over here.

 

What does this income contingent loan come under? I know that stat baring doesn't apply and if I go back to the UK the debt would still stand and would come out of my pay. Would I end up in the courts over there? Can they get me over here or can I afford to take a little extra time before paying them back a lump sum borrowed from a loan over here? Can they wreck my credit rating here (which would obviously defeat my plans to borrow to pay them, and future mortgages? Do they still have to get a CCJ to start things rolling with these new income contingent loans? Can I expect calls from an Aussie debt collection service and how seriously should I take them?

 

Please... un confuse me and help me with an informed strategy! I haven't ruled out going back to the UK to live at some stage, and do honestly intend paying this back... just need some time. Would help to know exactly what can and cannot be done to me!

 

Cheers..

[unclebulgaria67]

Well at least you have been paying some to the SLC. Many people who go abroad don't bother. I would suggest you write to tell them of your current circumstances and provide a rough outline of your income/expenditure and debt situation. They may just suspend the account and contact you in say 6 months for an update. There is no point phoning. I don't think they can enforce the debt in Australia without a lot of hassle, for which I don't think they would bother. It may be technically possible for the SLC to apply to a UK court in your absence and then approach an Aussie court, but I have not read of them doing this.

 

Send the letter to them and see what they say.

[cerberusalert]

A SL post 1998 is a mortgage style loan and the repayments vary depending on the country you are in. Here is a link to the thresholds http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678668&_dad=portal&_schema=PORTAL

 

Unfortunately there are reciprocal agreements in place between Oz and the UK & in the case of SLs & with it being a government debt are a lot easier to enforce than a normal debt such as a credit card or bank overdraft.

 

Normally your scheduled repayment amount is fixed for a 12 month period. However, you can apply for a reassessment of your scheduled repayment amount at any time if your income level falls. http://www.studentloanrepayment.co.uk/portal/page?_pageid=93,6678653&_dad=portal&_schema=PORTAL

[SLCedy]

Cheers guys. My experiences of SLC tell me that a letter pleading my situation won't help, but it's worth a shot I guess- not much to loose re. "Resetting the SB clock". Wonder if I scorch the letter a bit I can convince them I've passed away and am writing from hell! Mind you, the prob have an arrangement for collection with the devil! In fact I think he might moonlight as one of their call centre operators.

 

Doing some reading on mortgages - the main feature is that they're secured against real property in some way - is this the case with the SL? What is at risk if they decide to pursue me?

 

Also, being that type of loan should I try for payback of any charges, or have they got that sewn up too?

[cerberusalert]

When we refer to mortgage style loans it means that they are treated in the same way under CCA 1974 i.e the Statute of Limitations is 12 years rather than 6. They are not secured against any property & to take any enforcement they would need a court order which they can't get in the UK as you are no longer a resident here. They would need to bring an action in Oz.

 

Also, being that type of loan should I try for payback of any charges, or have they got that sewn up too?

Any penalties and charges will be covered by the terms & conditions of the loan.

 

Was it the SLC you have been speaking to or a debt collection agent?

[SLCedy]

I think it was the SLC's evil cousin - the in house agents who used to ring and harass. I had written a couple of emails to them saying that it was an offence over here to ring at strange hours etc, they never rang again.

 

Thus far in this episode I have only had the standard letters from the SLC, but they refer in their letter that I should make arrangements with their collections department, so I presume the account is with them.

[cerberusalert]

Personally I would have the repayments reassessed. Even if they expect you to pay more than you can afford as long as you make some kind of payment it should keep the wolves from the door. Besides, in the unlikely event that it ever went to court it would show that you are not trying to avoid repayment but are in fact making an effort to pay it.

[marmaris30]

Unfortunately there is no latitude for SLC to reassess your payments based on hardship or other needs for the money due to them, because it is assessed on your gross income before any deductions. If your hardship is due to a low income then you don't have to worry too much about SLC, provided you talk to them.

 

However, as I'm sure you know, there are different thresholds for different countries and you should make sure the correct one is applied for residence in Australia.

 

They would be unlikely to check if you had more than one source of income and only provided information about your main job. If your income has fallen then get it reassessed straight away. You will not make it any easier for yourself if you delay telling them, because they will 'estimate' your repayment at a standard (high) rate otherwise.

 

If you were working in the UK then the repayment would be deducted from your salary because it even hit your bank account so unfortunately for you, they will not take a sympathetic line if you decide to attach other priorities to the money.

 

They can and do commence legal proceedings for arrears outside of the UK, although it is quite rare. However if you let it get that far then you will see lots of penalty and legal fees added on. Even if you disappeared, these would be collected eventually if you ever came back to work in the UK.

 

Better to talk to them now and ensure your repayment is set correctly, and a realistic plan is set up for any arrears.

[SLCedy]

Unfortunately there is no latitude for SLC to reassess your payments based on hardship or other needs for the money due to them, because it is assessed on your gross income before any deductions. If your hardship is due to a low income then you don't have to worry too much about SLC, provided you talk to them.

 

However, as I'm sure you know, there are different thresholds for different countries and you should make sure the correct one is applied for residence in Australia.

 

They would be unlikely to check if you had more than one source of income and only provided information about your main job. If your income has fallen then get it reassessed straight away. You will not make it any easier for yourself if you delay telling them, because they will 'estimate' your repayment at a standard (high) rate otherwise.

 

If you were working in the UK then the repayment would be deducted from your salary because it even hit your bank account so unfortunately for you, they will not take a sympathetic line if you decide to attach other priorities to the money.

 

They can and do commence legal proceedings for arrears outside of the UK, although it is quite rare. However if you let it get that far then you will see lots of penalty and legal fees added on. Even if you disappeared, these would be collected eventually if you ever came back to work in the UK.

 

Better to talk to them now and ensure your repayment is set correctly, and a realistic plan is set up for any arrears.

 

I do appreciate your advice and I do want to get this sorted out. I am not even considering running away from the debt and it's only fair that I pay it. However, not wanting to post a sob story here or post my very personal circumstances, it would be incorrect to assume that I have lived a life of Riley and ignored my student loan in the hope that it will go away. Quite the opposite in fact. But enough on that.

 

I think the consensus is to contact and try to reason, which I will do. Do you think that me stating that I am trying to sort my affairs to pay off the entire balance would carry any favour? I know they would have to take my word for this, but would it buy any time ( which I would need to sort out the finance). I am worried that if I contact them it would stir up some action on their part..

 

By the way.. Is the money in he UK taken out pre-tax? Because it is post tax in the payments I've made here..

[marmaris30]

I know I may have come across as unsympathetic but only because I think SLC will be! I doubt they will be very encouraged by a promise to repay the full amount 'soon' with money borrowed from somewhere else, because their concern will be to enforce the repayment scheme, which is 9% of gross income (i.e. before tax) above the relevant repayment threshold. In the UK, this is enforced directly by your employer via PAYE, or via HMRC Self Assessment, and it is therefore payable with the same priority as your taxes.

 

In any case, the loan you propose to take out, presumably from a bank in Oz, would have to be repaid on a fixed schedule, irrespective of changes in your income, and the interest rate would almost certainly be much higher. In the UK, they don't even advise using savings to terminate the loan, because it's not a good use of the money. The Student Loan is very forgiving because of the low interest rate and income-based repayments (and it doesn't even appear on credit files), even if it is unforgiving of other problems and personal circumstances.

 

On the other hand, it can only help the situation if you contact them and discuss how to get back on track. It is true that many people do default from overseas and it is true that SLC have not been very good at pursuing them (according to the papers), so the fact that you are making an effort to sort it out from the other side of the world, must count for something!

[Guest]

I agree with the posters above me regarding contacting them to talk things through.

 

I ignored my (new style) loan for five years until two days ago actually when I called to see what the damage was (as they do state that they add fees to the balance for every month that you don't contact them). To my surprise, they didn't mind the fact that I had disappeared and also they hadn't added on any fees, other than the 1.5% per annum interest. They were very nice to deal with, considering I had obviously ran away from them! Anyway my point is that it probably will go a lot better than you imagine. Best of luck !

[SLCedy]

 

In any case, the loan you propose to take out, presumably from a bank in Oz, would have to be repaid on a fixed schedule, irrespective of changes in your income, and the interest rate would almost certainly be much higher. In the UK, they don't even advise using savings to terminate the loan, because it's not a good use of the money. The Student Loan is very forgiving because of the low interest rate and income-based repayments (and it doesn't even appear on credit files), even if it is unforgiving of other problems and personal circumstances

 

I'm not so sure that's sound advice, and sounds very much like SLC's unwavering line. If you take into consideration that I'm paying income tax on the money I'm using to pay the student loan, then add in all the fees and exchange charges that I have to pay every month to send SLC money, suddenly a salary sacrificed low interest loan here in Australia seems quite attractive. Plus I get the pleasure of denying them any further of my business, how ever low the interest rate is. The SLC has no concept of personal circumstance, is unwilling and inflexible, has terrible customer service and significantly disadvantages its overseas customers. It's no wonder so many of them default. Even the ones that want to pay back are chastised and belittled. That is before you consider any personal issues which may cause my "income to be assigned to other priorities" as you so eloquently put it. You have no idea and neither do they. Sick children with expensive medication, expensive and messy divorce settlements, deaths in the family overseas... I guess all of those are would be much less a priority, as long as SLC gets its 9% of a pre tax income, after tax.

 

End rant.

 

I think I know which direction I will be heading, thank you for helping me to make up my mind marmaris, you've reminded me why I haven't rung them before now. It's like negotiating with a high an mighty brick wall with a script.

Edited October 9, 2012 by SLCedy

[SLCedy]

Just to clarify: I have none of those circumstances, but do have others. Many of your readership could have. My point is you should not make assumptions.

[unclebulgaria67]

If you can get an affordable loan in OZ to pay off the SLC, then that might not be a bad idea. I bet a lot of people who move abroad, don't bother to repay the SLC, if they never plan in returning to the UK. Personally I don't blame them.

 

In regard to paying off the SLC, have you asked them whether they would accept a reduced full and final settlement offer. I doubt they would accept, but is it worth asking, given that you now permanently outside of the UK. It makes sense to me, but probably not to them.