DH is getting student loan payments deducted from his pay-checks wrongfully

Hey guys,

DH's UK student loan conditions are that he needs to have a wage of at least 15k before having to pay any of it back. He makes slightly above minimum wage so way below 15k. They've started to deduct £2 off his pay check. We're not worried about that as it's not a lot but is it true that once the payments start, the interest starts rolling on too? Is there anywhere we can contact to find out?

thanks!

Has he been doing any overtime or worked more hours than normal during any weeks/months? Or maybe received a bonus or extra shift pay?

They base the student loan payments on your income each month, so if he happens to have earned more than the minimum threshold in any week or month, they will deduct the student loan amount accordingly.

For example, I graduated uni in 2005, but didn't earn a salary of more than 15K until 2010.

However, one month, I had several weeks' worth of Sunday shift allowance paid out in one pay check, which took me just above the minimum amount for student loan deductions... so I had to pay £22 of my student loan that month. I also had £2 deducted another month due to working some overtime.... so in those 5 years, I only paid off £24 of my student loan .

Even now that I am earning over 15K, my student loan deduction amount changes each month... depending on how much weekend shift pay I've claimed.

Thanks Ksand! That doesn't sound bad at all. Wish American student loans worked like that. And yep he did work a lot of over time recently. Thanks again.

Thanks Ksand! That doesn't sound bad at all. Wish American student loans worked like that. And yep he did work a lot of over time recently. Thanks again.

No problem at all... it's probably the case that with his overtime included, his earnings have just tipped over the equivalent of 15K a year...i.e. if he earns more than £1,240 (pre-tax) in a month, they will deduct the relevant student loan percentage for that month. If he earns less than that the next month, they won't deduct anything.

We're not worried about that as it's not a lot but is it true that once the payments start, the interest starts rolling on too? Is there anywhere we can contact to find out?

Oh, I forgot to add: it doesn't matter when you start payments... I believe the loan starts gaining interest as soon as you take it out.

I borrowed around £13,000 in total between 2001 and 2005... I've only been earning over 15K since 2010, but last time I looked (a few months ago), I owed over £16,000 - it's been gaining interest since 2001/02. Back in 2006, I believe the interest was about £40 a month... not sure what it is now though.

Why not contact them and ask for clarification in writing?

http://www.direct.gov.uk/en/Dl1/Directories/UsefulContactsByCategory/EducationAndLearningContacts/DG_172310

Hope it gets figured out without too much hassle! 

Why not contact them and ask for clarification in writing?

http://www.direct.gov.uk/en/Dl1/Directories/UsefulContactsByCategory/EducationAndLearningContacts/DG_172310

Hope it gets figured out without too much hassle! 

Ooh thanks for that. I will contact them. Would be good to know how much interest has been added to the amount as well.

We've been dealing with the student loan thing for a while. We learned a little about how it runs when DH's pay was being deducted here while at the same time the student loan company was trying to collect for the income he was no longer making in the USA. Geniuses.

Basically your employer pays the deductions into a government account where it sits until the end of the tax year, gathering interest for the government I imagine. Then it is paid to the student loan company. They don't actually know, apparently, how much is being paid until it is all submitted to them.

So really one department does not speak to the other. Keep that in mind when you are talking to them when they say that can't find how much is being deducted. And definitely keep things in writing if you can!