A graduate has reported receiving a letter from student loans provider Erudio, which quoted incorrect regulations, and we want to know if you've received a similar letter.
An Erudio customer wrote on our forum that they'd been sent a letter, which referenced The Education (Student Loans) Regulations 1997 and stated that they mustn't earn more than £1,316/month in order to be eligible for deferment – where graduates earning under a certain threshold can put off repaying their loan.
However other forum users were quick to point out that the figure quoted by Erudio seemed to relate to monthly deferment incomes from 1997 – currently it's £2,227/month or £26,727/year (pre-tax), not £1,316/month – and that Erudio was quoting old 1997 regulations, which were revoked when The Education (Student Loans) Regulations 1998 came into force on 1 March that same year.
We contacted Erudio, which looks after 250,000 student loans taken out between 1990 and 1998, and it told us that depending on the year students took out their loans, they would be subject to different Government regulations from either 1997 or 1998.
However the Department for Business, Innovation and Skills (BIS) confirmed that The Education (Student Loans) Regulations 1998 are the current regulations, which govern all mortgage-style loans regardless of when they were taken out and that it contains a paragraph that revokes the earlier 1997 regulations.
We raised this with Erudio and it said that if it had quoted the 1997 loan regulations in the letter, this "is an error and we apologise". However, it says it's unable to comment further as it needs the user's details to look into the issue – we've yet to receive a response from the user or a copy of the letter.
Erudio adds that it's not aware that it's sent out letters quoting the wrong rules, but we're publishing this story to ask anyone who has received a similar letter to let us know via the forum discussion below.
What's the difference between regulations and loan agreements?
Mortgage style loan graduates will always be governed by the Government loan regulations set out in 1998, but they will be also be governed by a separate credit agreement. This will differ depending on whether they signed it pre-1998, or in/after 1998.
The difference between the loan agreements is that loan agreements signed in 1998 and onwards reflect the 1998 regulations, while the pre-1998 loan agreements don't. The only exception to this rule is when the 1998 regulations override aspects of the T&Cs of credit agreements taken out pre-1998.
Here's the difference between loan regulations and credit agreements:
- Loan regulations are set by the Government. These explain how the mortgage-style loans work in practice for those who received loans towards their maintenance/living costs. The regulations don't cover tuition fee loans as these were introduced in 2006/07 (and are known as income contingent loans) and are separate to the older mortgage style loans.
- A loan/credit agreement is the particular agreement a customer signs with the lender and concerns issues such as the amount of the loan, repayment term, interest and the information that may be disclosed to other parties such as a credit reference agency.