April 6, 2014
Former students in uproar over debt collector
Hundreds of thousands of people with student loans outstanding from the 1990s have been sent shock letters from the company that bought the debt from the Government.
Erudio Student Loans was set up last year by the debt-recovery specialist Arrow Global. Credit industry insiders say the firm is renowned for “carpet bombing” potential debtors and, since taking over the loan book last November, it has been busy.
Several readers with deferred loans have contacted The Independent with fears that they could end up with a credit black mark or be forced to repay their loans, even though they remain on benefits.
They suggest that Erudio is trying to get ex-students to sign a note changing the conditions of the loan, allowing the deferral status and account to be reported on credit reports.
One reader, too scared to be named, said: “I live alone so the frightening bit for me is a new agreement says that if you are successful in deferment, your details will be passed to credit reference agencies.”
He is concerned that a black mark will hit his chance of ever getting a mortgage or even a reasonably priced loan.
Another reader said: “Erudio say my housing benefit, child tax credits and child benefit along with child maintenance are classed as income. If they do that I go over the threshold by £26 per month and then will be expected to pay £130 a month from my kids' money.”
You can find plenty more stories on the Mumsnet website, where posters have naturally become heated. There remain an estimated 300,000 former students with mortgage-style loans, which ended in 1998.
The company told us in a statement: “Erudio is committed to ensuring customers get fair and efficient processing of their student loans and deferment applications.”
It pointed out that: “This is the first time that the private sector is operating the deferment process and Erudio is committed to working with all parties involved to help deliver a good service to customers.”
Does that mean it will play fair with former students? As long as loans don't fall into default, people should be no worse off dealing with the firm than they were under the Government, it claims.
What about the risk of a credit black mark? Not so, said Experian. “This should be good news for people's credit ratings. A well-managed loan should strengthen someone's credit history.”
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