Embattled student loans administrator Erudio has failed to provide deferment application forms to thousands of graduates on time, which may leave them wrongly having to make repayments from next month if not resolved.
Since being contacted by MoneySavingExpert.com, Erudio has said it will be mailing missing forms out and has agreed to extend the deadline to apply for a deferment by 56 days.
Erudio manages around 250,000 student loans in total, taken out by those who began courses between 1990 and 1998 – of which about 70,000 graduates have deferred.
All pre-1998 Erudio students nearing the end of their deferment period should previously have been written to by the company and given eight weeks to complete and return their deferment application forms, ahead of their annual deadline for the next 12-month deferment period.
However, of the 7,000 graduates currently awaiting deferment application forms, many have received letters from Erudio stating that they would have to start repaying their student loans next month because it has not yet received their forms.
Under the terms of a student loan credit agreement, you are either expected to make regular repayments or apply to defer your repayments for a year. If you took out a student loan for a course starting in 1998 or earlier and have a gross monthly income of £2,402 or less (equivalent to £28,828 per year) you may be eligible to apply for deferment.
Erudio has suffered a string of blunders in recent years – including mistakenly taking money out of people's accounts and quoting outdated regulations. This week it has come under fire from angry graduates in the wake of this latest mishap.
The company has "unreservedly apologised" and conducted a "thorough review" of its procedures as a result.
MSE has been contacted by a number of concerned former students who have previously deferred payment and want to do so again for the coming year. Some have accused Erudio of using "dirty tricks" over the missing application forms in a bid to "railroad" graduates into making repayments, an allegation Erudio has denied.
MSE forumite FuriousFeline says: "It seems that Erudio are up to dirty tricks, deliberately not sending people the deferment application forms, with the intention of railroading people into making payments when their current deferment periods end. I cannot afford to make repayments, so will then be in arrears."
Another MoneySaver, who asked to remain anonymous, has raised the issue with her MP Chris Stephens. She adds: "I reminded Erudio of their obligation under the sales and purchase agreement to provide a DAF [deferment application form] not less than eight weeks before deferment end date. Very tiring having to deal with this every year."
Gavin says: "The only time I've actually heard from Erudio this year is the letter I received on 1 April. It lists my balance, how to pay, and a claim that a form has been sent to me under separate cover.
"I note Erudio has an apology on its website in relation to the forms problem. It says the packs were sent out in March, missing a form. When in reality, there was no pack. No communication whatsoever until their recent letter."
How has Erudio responded?
To confuse matters further, Erudio has claimed that it sent out deferment application packs in March but that a number of those did not contain the "relevant paperwork" – in some cases this included the deferment forms themselves. As a result, some customers were later sent reminders having not previously received the relevant documentation.
The company has also told MSE that while it was carrying out an investigation into the missing documentation in the packs, some customers who were yet to receive their packs were sent automatic reminder letters.
Erudio has subsequently apologised to those impacted by its error and stated that it has performed a "thorough review" of its procedures, identified the issue, concluded that it was an isolated incident and has put additional measures in place to ensure it is not repeated.
So what happens next?
Affected graduates should be contacted by Erudio "in the next few days". Your deferment date will be extended to ensure you have 56 days from the date your application form is sent to apply for deferment.
In addition, the maturity date on your loans will be extended to ensure there will be no financial detriment.
If you're one of the 7,000 people impacted by the late delivery of a deferment application form and are concerned that Erudio may not get in touch with you over the coming days, you can contact the company yourself by calling 0333 003 7188 (UK only) or +44 141 278 6114 (overseas) or via email at email@example.com.
Who should I contact if I want to make a complaint against Erudio?
You can contact the Financial Ombudsman Service (FOS) to escalate a complaint, but this should be done eight weeks after you lodged your initial complaint with Erudio and a final written response has not been provided
You can call the FOS on 0300 123 9123 or email them at firstname.lastname@example.org.