Two Debt Camel readers have asked questions about old-style student loans. These were loans taken out between 1990 and 1998, where the payments can’t be taken directly from your wages. They are also called mortgage-style or fixed-term loans.
When will the debt be written off?
These old student loans will be written off when the last year’s loan is 25 years old, or a bit earlier for older students, see The Education (Student Loans) Regulations 1998 Schedule 2, paragraph 12 for details. But that only happens if you are not behind with payments, eg if you have been validly deferring them.
Mr J’s debt – probably statute barred
Mr J asked:
A debt collector has been chasing me for over 8 years for a student loan taken in 1995. I haven’t made a payment or deferment since 1999. There has been no contact in writing since this date by myself.
Every year I get a statement from them asking for payment. I own my own house and am concerned that one day in the future they may go for a charge to secure the debt. Do I just keep ignoring letters each year or do I send a “statute barred letter” to end matters?
A debt is statute barred when a creditor has waited too long to go to court for a CCJ I’ve looked at this in Common questions about Statute Barred Debts. If this has happened, if a court case is started you can defend it and not get a CCJ.
For most debts, including old-style student loans, this period is six years during which you haven’t made a payment or acknowledged the debt in writing. The first payment for one of these loans was usually due in April after your degree finished, so the six-year period would have started then if you never paid anything, or a month after your last payment if you did start repaying.
Deferred repaying your loan because you earned too little would count as acknowledging the debt, so the six year clock would start again. If you have deferred every year, you won’t have paid anything but the debt still wouldn’t be statute barred!
But in the case of Mr J, it sounds as though his the debt is probably statute-barred. Mr J could send a statute-barred letter (there is a link to a template in the Common Questions link above) or he could just continue to file the letters he is getting until 2020, when his loans will be written off if his last student loan was taken out in 1995.
There doesn’t seem much to gain from sending the statute barred letter. The debt still legally exists even if it is statute barred. The debt collector would probably continue to send an annual letter.
Mr J doesn’t need to worry about the debt collector getting a charge over his house. Before this could happen, there would have to be a CCJ and being statute barred is a good defence against a CCJ. The debt collector has his correct address so if they send him a Letter Before Claim, which has to happen before a court case is started, Mr J can explain then that the debt is statute barred. See How to reply to a Letter Before Claim for details.
Ms P’s student loans – a very old CCJ
Ms P asked:
I had a student loan in 1992 and was under the assumption that I would not have to start repaying until I earned £17,000. I have never earned that much, I left university early due to ill health and haven’t worked since 1997.
24 years later, I get a letter from a debt collector saying they are acting on behalf of Erudio Student Loans. After a few quite rude/abrupt phone calls I wrote a letter regarding the statue of limitations. After 5 months the calls started again, now they are claiming a CCJ was taken out in 1997 – I have no recollection of this – so the debt can’t be statute barred… Can Erudio enforce this CCJ?
Ms P either never completed the correct documentation every year to defer her loans or it wasn’t correctly handled – the Student Loan Company doesn’t have a good reputation for administration. It’s not clear why Ms P never received the CCJ papers, but Erudio did eventually produce some evidence that there had been a CCJ.
The debt collector is right to say that a CCJ never becomes statute barred. But after six years a creditor has to return to court to get permission to enforce it. This might sound like some formality, but it’s not, it’s very unusual.
Before the court agrees that a CCJ over 6 years old can be enforced, the creditor has to show that there are some unusual circumstances why it didn’t take action within the six-year period. Forgetting about it or not being able to find you are not good enough! The more time goes on, the less chance there is of a court agreeing – after 20 years this is extremely unlikely.
Should you have started to make payments?
Perhaps you have started making payments after you were contacted by a debt collector, but now wonder if your debt was statute barred or a CCJ was too old to be enforced? Talk to a debt adviser to discuss your options. Once a debt is statute barred it will always remain so. Any recent payments you made after that point won’t have changed this.
Don’t let the fact you can’t prove what happened many years ago stop you from getting advice. It’s not reasonable to expect people to still have copies of letters written in 1999 or their 2001 bank statements… That is exactly why there are time limits on legal action.
National Debtline has a good fact sheet on these old style student loans and they would be good people to discuss your case with.
Had a letter offering you 50% off to settle a very old student loan?
Some people are getting these letters in autumn 2018. Martin Lewis has written a great article on them – he says:
“The vast majority of people who get these letters should treat it like it’s dirty, hold it by the edge and toss it straight away in the bin. Erudio is trying a fast one on most people.”
Do I have to pay a debt not on my credit file?
How to stop a debt being sent to bailiffs
No emergency fund? That’s nuts!
Sarah says
October 10, 2017 at 12:10 pmThis is really useful and uplifting, thank you. I had assumed that as my retirement age keeps getting lifted, I would have to carry on repaying my student loan (what feels like) forever. I’ve never earned enough to really make a dent in it, and sometimes have not earned enough to pay anything at all. So year-on-year, the debt has increased overall. But the link you included makes me think it may still be written off when I hit 60 as I had originally been told when I took it out; I assumed it was linked to my then my expected retirement age. I turned 40 during my degree, so would have been over 40 when receiving the last two tranches of student loan. So that’s something to look forward to!
Sara (Debt Camel) says
October 10, 2017 at 12:17 pmThat sounds like good news – if you want to talk through the details of your case, do try National Debtline.
Firefox says
June 28, 2018 at 1:59 amIs it true that if you tuck the SL out in 97 then all the ones u pto 2001 come under the same rules as the old ones
Sara (Debt Camel) says
June 28, 2018 at 7:05 amI think you should talk to National Debtline about this, see https://www.nationaldebtline.org/EW/factsheets/PDFs/42%20EW%20Fixed-term%20student%20loans.pdf
Lucy Bryant says
August 29, 2018 at 8:55 amHelp please I took out my loan 1997 and at the rate I am paying currently won’t have cleared it by the time the loan hits 25 years old (the time when I was told it would be written off by) is this still the case when the loan is being cleared or as I have been paying it off do I need to continue until it’s cleared?
Sara (Debt Camel) says
August 29, 2018 at 9:11 amI think the loan should be cleared at 25 years, even if you are still paying it. I suggest you ask the Student loan Company to confirm the exact date for you.
Mary Toward says
October 4, 2018 at 2:44 pmHi
I have 3 loans taken out in the early 90s, they were sold to one of the new debt-management style companies and one of them is in arrears, due to paperwork not being received. I am eligible for deferral and have deferred despite the arrears. The loans are in my maiden name and I no longer live at the address where they were taken out, they do not have my bank account details, my current name or address or my place of work. Can they enforce the loan now?
Sara (Debt Camel) says
October 4, 2018 at 3:42 pmWhen did you last make a payment to these loans or last communicate with the creditor eg to defer?
Are you now getting letters to your current address? Is anything showing on your credit records?
Mary Toward says
October 9, 2018 at 9:39 amHi, Thanks for getting back to me. I deferred this April, we are in dispute over the arrears and I have not paid anything towards this. I am no longer at the job I was in then (and used the payslips for deferral). The house they are writing to has just been sold and there is nothing under my current name showing on the credit records (loans taken out in maiden name which des not seen to be linked)
Mark says
October 14, 2018 at 1:10 pmThe loan agreements and regulations as cited above both say the loans will be cancelled “when the last agreement for a student loan has been outstanding for not less than 25 years”. But what is the legal definition of “outstanding” for this purpose, i.e. how does one calculate the exact writing off date?
It seems to me this should be 25 years after the first payment of the final loan was advanced, but I’ve also seen suggestions it is 25 years after the date on which the first repayment (without deferment) was due, which for most people was about 18 months later. For anybody who is in monthly repayment at the point of writing off, this distinction could make a 4-figure difference to the sum repaid.
I know I could ask Erudio or SLC but they are not impartial here: I’d like to know the real legal position, rather than their preferred version of it!
Sara (Debt Camel) says
October 14, 2018 at 2:03 pmI am not a lawyer! You could ask National Debtline on 0808 808 4000 – they may have come across this before and know the answer – I don’t.
Janet Wilson says
March 15, 2019 at 9:00 pmHi mine was taken out in 93. I defaulted and a ccj issued in @2000. Studio are now threatening me with bailiffs. Student loans tell me there is @£30 outstanding but studio say it’s over £850. Any advice?
Sara (Debt Camel) says
March 15, 2019 at 10:01 pmStudio = Erudio after auto-correct?
That is a very old CCJ. Talk to National Debtline as they may be able to help you sort this out.
It may be a good idea to send Erudio and Student Loans a request for a copy of all your personal data to try to resolve the discrepancy. Email customerservices@erudiostudentloans.co.uk with “Access to my data” as the title and complete the form on SLC’s website here: https://www.slc.co.uk/about-us/data-subject-rights/right-of-access.aspx.
AC says
April 18, 2019 at 2:33 amHi there,
I took out a loan in 1995 and another in 1996. I have consistently deferred, although since Erudio took over there have been a few times in the past 10 years when I have made a couple of payments during the period between reapplying for deferment and the deferment being confirmed, just to make sure I don’t end up in arrears. I’m not 100% sure when my loans should be written off. I will be 50 in 2025, but I think the 25 year threshold will be sooner – will this be 2021? I’m not clear on exactly when the 25 year thing actually kicks in. My other question is that it is likely that I will actually have to start repaying the loan this year, as I’m likely to clear the threshold finally! What happens in this case? If I reach the 25 year threshold but I am making repayments and not in deferment, do I have to keep paying?
Sara (Debt Camel) says
April 18, 2019 at 8:05 amThere is a link in the article above to the loan legislation. It says (I have deleted bits that don’t apply to you, eg you have died!)
“The lender will cancel the borrower’s liability to repay the loan if the borrower—
…
(b)is not behind on any repayments under any agreement for a student loan and—
(i)was under the age of 40 when his last agreement for a student loan was made and he reaches the age of 50 or
when the last agreement for a student loan has been outstanding for not less than 25 years, whichever is the sooner,
…”
Not being in arrears is vital here. It sounds as though you have been careful to ensure this is the case.
The important date is the date of your last loan which is in 1996? So 25 years from there is 2021. You get to this point before you become 50, so that 50 part isn’t relevant.
“If I reach the 25 year threshold but I am making repayments and not in deferment, do I have to keep paying?” no!