Govt sells student loans to debt collectors
Discussion
menousername said:
thought the whole point was that students were in safe hands with the SLC etc, rules relating to paying back when earning sufficient salary
unless I am mistaken, students are at going to be at the mercy of your usual debt collection firm, probably regardless of status, means, etc etc
You're mistaken.unless I am mistaken, students are at going to be at the mercy of your usual debt collection firm, probably regardless of status, means, etc etc
If they continue ot pay on time they've no issue.
If they don't then they'll get bullyrammed, of course.
Something is worth what people are prepared to pay for it.
If it was indeed a competitive bidding process then £160m is a fair value.
It sounds like a big discount from the £900m face value of the debt but in the detail 46% of that is with people not earning enough to pay back their debt etc...
SLC are good at lending money (rightly so) not collecting it.
Sure we could have trained up a bunch of debt collectors and founded some new quango to oversee them but this was a pretty quick and easy way to net £160m.
If it was indeed a competitive bidding process then £160m is a fair value.
It sounds like a big discount from the £900m face value of the debt but in the detail 46% of that is with people not earning enough to pay back their debt etc...
SLC are good at lending money (rightly so) not collecting it.
Sure we could have trained up a bunch of debt collectors and founded some new quango to oversee them but this was a pretty quick and easy way to net £160m.
RSoovy4 said:
You're mistaken.
If they continue ot pay on time they've no issue.
If they don't then they'll get bullyrammed, of course.
how can they have not been paying on time - deducted at source as a percentage of salary over the threshold. No salary over the threshold means no payment dueIf they continue ot pay on time they've no issue.
If they don't then they'll get bullyrammed, of course.
where do debt collectors fit into this
menousername said:
RSoovy4 said:
You're mistaken.
If they continue ot pay on time they've no issue.
If they don't then they'll get bullyrammed, of course.
how can they have not been paying on time - deducted at source as a percentage of salary over the threshold. No salary over the threshold means no payment dueIf they continue ot pay on time they've no issue.
If they don't then they'll get bullyrammed, of course.
where do debt collectors fit into this
The debt has been sold for a percentage of its face value. Jam today so to speak.
Let's say that I have lent 100 people a tenner each all over town ages ago. It's a hassle for me to collect it all and lots of them won't pay/have moved blah blah blah, and I could do with some money now rather than waiting for it, for cashflow reasons.
So I sell the £1000 debt to someone else for £500. I get £500 up front, no haslle of collecting, and they get gravy for everything over £500 they collect.
menousername said:
how can they have not been paying on time - deducted at source as a percentage of salary over the threshold. No salary over the threshold means no payment due
where do debt collectors fit into this
While they are supposed to be deducted at source, I am pretty sure that requires telling your employer you have a student loan.where do debt collectors fit into this
Perhaps the 40% not paying within their terms somehow "forgot"...
Although that begs the question as to how the govt know that people are under-paying...
thats where I am getting confused... repayment is linked to your tax code etc. shows up on your payslip.
Pretty impossible to avoid it if you go over the salary threshold
what have they sold... aged accounts for grads who are not earning over the threshold, through no fault of their own?
Pretty impossible to avoid it if you go over the salary threshold
what have they sold... aged accounts for grads who are not earning over the threshold, through no fault of their own?
menousername said:
thats where I am getting confused... repayment is linked to your tax code etc. shows up on your payslip.
Pretty impossible to avoid it if you go over the salary threshold
what have they sold... aged accounts for grads who are not earning over the threshold, through no fault of their own?
They've probably sold because they know that millions and millions have been given to fraudsters and/or people who don't live here who will never pay.Pretty impossible to avoid it if you go over the salary threshold
what have they sold... aged accounts for grads who are not earning over the threshold, through no fault of their own?
walm said:
Something is worth what people are prepared to pay for it.
If it was indeed a competitive bidding process then £160m is a fair value.
It sounds like a big discount from the £900m face value of the debt but in the detail 46% of that is with people not earning enough to pay back their debt etc...
SLC are good at lending money (rightly so) not collecting it.
Sure we could have trained up a bunch of debt collectors and founded some new quango to oversee them but this was a pretty quick and easy way to net £160m.
Pffft! I don't think they are! Unless they've massively upped their game in the last few years.If it was indeed a competitive bidding process then £160m is a fair value.
It sounds like a big discount from the £900m face value of the debt but in the detail 46% of that is with people not earning enough to pay back their debt etc...
SLC are good at lending money (rightly so) not collecting it.
Sure we could have trained up a bunch of debt collectors and founded some new quango to oversee them but this was a pretty quick and easy way to net £160m.
This isn't like factoring where the debt is sold to a discount house and they pursue it. It's a simple securitisation where the debt is sold and the originator continues to collect service and collect payments (for a fee), which are passed on to the investors who have bought the securitised debt. As far as the debtor is concerned they're still dealing with the originator (in this SLC and HMRC as their agent) - so the normal student loan terms still apply.
It's fairly common in car finance and mortgages in order to free up capital to make new loans.
It's fairly common in car finance and mortgages in order to free up capital to make new loans.
ninja-lewis said:
This isn't like factoring where the debt is sold to a discount house and they pursue it. It's a simple securitisation where the debt is sold and the originator continues to collect service and collect payments (for a fee), which are passed on to the investors who have bought the securitised debt. As far as the debtor is concerned they're still dealing with the originator (in this SLC and HMRC as their agent) - so the normal student loan terms still apply.
It's fairly common in car finance and mortgages in order to free up capital to make new loans.
I am not 100% but I think you are wrong. This is factoring.It's fairly common in car finance and mortgages in order to free up capital to make new loans.
I wouldn't trust Sky's reporting as far as I can drop-kick Rupert Murdoch's saggy arse but...
"The Government has sold off student loans totalling almost £900m to a private debt collection agency."
"BIS argued the private sector was thought best placed to collect the outstanding debt..."
If you read the Arrow Global press release - they are very clearly taking on the relationship with the debtors.
"The Student Loans Company will continue to manage the book until the loans are transferred to Erudio Student Loans in a few months time."
And from their website: "We work closely with customers whose debts we acquire to find affordable repayment plans based on their individual circumstances."
The loans that have been sold are the £890 million worth of remaining pre-'98 student loans (that are paid back direct from the bank accounts in the same way you pay back a mortgage, hence the name 'mortgage style loans'). Of the ex-students who between them owe that amount 46% are earning below the repayment threshold, 14% in repayment, and the remaining 40% are not repaying their loans in accordance with their terms.
The post-'98 loans that are paid back via HMRC are still controlled/backed by SLC.
The post-'98 loans that are paid back via HMRC are still controlled/backed by SLC.
As I have collected some of these debts, they have been in the private debt collection arena for a few years now, but the SLC are lethargic and crap at collecting any kind of money if the person provides a lack of enthusiasm to send the required forms back.
These are the pre-98 loans and will not be taken out of the tax code, the 'debtor' has to send back a form on an annual basis if they don't qualify for repayments and if they don't the SLC treat it as a debt and arrears are accrued.
Another example of privatisation by the government, eventually even the air we breath will be licensed by a PLC.
Oh BTW debt collectors aren't a nasty bunch and if they are the FCA will rip their balls off from April next year!
The fact is if you have taken the money and you repay it or communicate if you can't then you will not have me turn up at your doorstep. And we always listen to the disputes and send it back to the clients if the customer is unhappy.
Lets just say, I know my rights as a debt collector and I adhere to them. I get fed up with all the bad mouthers out there who are generally trying to avoid knowingly as they see it as their entitlement not to pay a debt because they didn't read their terms and conditions.
The way of the world: one personality for taking the money; another when it comes to pay it back.
These are the pre-98 loans and will not be taken out of the tax code, the 'debtor' has to send back a form on an annual basis if they don't qualify for repayments and if they don't the SLC treat it as a debt and arrears are accrued.
Another example of privatisation by the government, eventually even the air we breath will be licensed by a PLC.
Oh BTW debt collectors aren't a nasty bunch and if they are the FCA will rip their balls off from April next year!
The fact is if you have taken the money and you repay it or communicate if you can't then you will not have me turn up at your doorstep. And we always listen to the disputes and send it back to the clients if the customer is unhappy.
Lets just say, I know my rights as a debt collector and I adhere to them. I get fed up with all the bad mouthers out there who are generally trying to avoid knowingly as they see it as their entitlement not to pay a debt because they didn't read their terms and conditions.
The way of the world: one personality for taking the money; another when it comes to pay it back.
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