Student Loan Arrears
Student loans are loans offered to students to assist them in paying their annual tuition fees for their college or university. These loans are convenient and offer lower interest rates than other loans, and are usually issued by the government.
In the UK, student loans are provided by the Student Loans Company (SLC), a non-departmental organisation of the UK government. This company is responsible for providing financial support to students attending university. These loans do not have to be paid back until the April of the year after students have completed their course and are earning £15,000 a year.
Should you take out a student loan, you are required to repay the loan using the PAYE system, with 9% of your gross salary over £15,000 automatically being deducted from your account every month to pay the loan. If a student loan is not cleared in 25 years after repayment began, or if you turn 65 years old, the remaining debt will be cancelled. This is only subject to students who have continually met their repayment obligations and who have not defaulted on payments at any time during the period of the loan.
What if you have difficulties in repaying your student loan?
Student loans are loans offered to students to assist them in paying their annual tuition fees for their college or university. These loans are convenient and offer lower interest rates than other loans, and are usually issued by the government.
In the UK, student loans are provided by the Student Loans Company (SLC), a non-departmental organisation of the UK government. This company is responsible for providing financial support to students attending university. These loans do not have to be paid back until the April of the year after students have completed their course and are earning at least £15,000 a year.
Should you take out a student loan, you are required to repay the loan using the PAYE system, with 9% of your gross salary over £15,000 automatically being deducted from your account every month to pay the loan. If a student loan is not cleared in 25 years after repayment began, or if you turn 65 years old, the remaining debt will be cancelled. This is only subject to students who have continually met their repayment obligations and who have not defaulted on payments at any time during the period of the loan.
What if you have difficulties in repaying your student loan?
There may come a time when you find yourself facing financial difficulties and cannot make the necessary repayments on your loan. You may be earning above the student loan threshold but cannot defer or meet repayments. In this instance you need to contact the SLC and inform them of your situation as soon as possible. Provided you have a valid reason for failing to pay, the SLC will do whatever they can to help you investigate your options and offer possible solutions.
Generally, once you have started to make the repayments on your loan, you are expected to maintain those payments on a monthly basis until the full balance is repaid. These repayments are not over a fixed period, and the monthly repayment amount may rise and fall with your income.
If you are unable to continue repayments for the time being, you and a SLC representative should discuss your situation and available options. The representative will offer advice, or even help you arrange a reduced repayment schedule. The representative may also suggest you ask any of your other creditors to consider reducing your repayment plans with them.
What if you do not make the monthly repayments?
If you simply neglect to make your repayments, the SLC will contact you in a bid to find a suitable arrangement to bring repayments up to date before taking debt recovery action. If you miss one payment you will be sent a letter. Failure to respond to this letter will result in further attempts to contact you via mail or telephone. If you do not respond, further action will be taken against you to recover any outstanding arrears. This may involve the use of a debt collection agency and legal actions being raised against you.
If you find yourself unable to continue making repayments towards your student loan it is important that you contact the SLC as soon as possible to avoid any legal action. The SLC have many options and ways in which to assist individuals in these situations. If this is applicable to you at any point call them straight away and discuss options.