Expert: Andrew Hill Date: 5/8/2007 Subject: Paying back student loans when leaving UK
Question Hello Andrew, I finished my degree in July 2007, for which I took out the maximum student loan possible over the three years. In 2 weeks will be leaving the country, quite likely for a number of years. Several people have mentioned to me that apparently, if one leaves the UK for four years then the student loan company stop demanding repayments and basically the loan is waved. Is this true? I have tried finding information about this on the net but have not been successful. Thankyou very much!
Answer Dear Miranda,
It seems very difficult to come by the information you are looking for. I have never come across this before, but as you have done, have searched on the internet to try to help you.
I came across a few websites dealing with student loan repayments from abroad, but please note some of them are quite old!
If you never repay due to consistently earning less than the payments threshold, once you reach 65 (for loans taken before September 2006) or 25 years from the first April of graduation (for loans after September 2006) your debts are wiped clean.
If at anytime you move abroad, you're expected to inform the student loans company so you can make repayments directly to them (usually by direct debit). Your repayments will be deducted in pounds sterling and you'd be responsible for any costs involved in converting the currency.
There are severe penalties if you don't tell the Student Loans Company, or chose not to repay by not providing them with information they request to be able to deduct repayments from your UK salary. These include tripling the normal rate of interest on your account, deducting repayments based on an income equal to twice the UK average earnings, and even demanding that you repay the total loan in one go…so beware!
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As far as I can see there seems to be general confusion over what happens if a student moves abroad, and stays there for some period of time. I advise you to contact your student advice/support office - probably located in your student union as I'm sure you know.
Or if you have already tried that, the best option is to talk to the company themself:
Student Finance Direct Customer Support Office
Phone 08456 077 577
I do hope you find out, and have a good time abroad!!
Sorry I can't be of more help,
