Customer Relations Policy at the Student Loans Company

An unfortunate corollary of pursuing a PhD is the tendency to accrue a sizeable student loan. My initial degree was a 5-year integrated Masters degree, and I sought a fair chunk of loan to help support myself. Unfortunately, the 4 years of PhD study that followed it are poorly paid – one can get by, but you don’t have much by way of disposable income, and because you’re a student you don’t pay back any student loan.

The result is that I graduated from my PhD with close to £20,000 of debt. This was taken off my post-doc-earned pay whilst in the UK at a fair rate. However, moving abroad to Australia has been a game changer. My pay here, in UK terms is high. However, living costs over here are also very high. Sydney is the 5th most expensive city in the world, and rent in particular is astronomical. This isn’t well reflected in the pay threshold, over which you pay a proportion of your income as student loan. When I moved over here the threshold for Australia was about £22k/year, whilst the threshold for the uk was £18k. My feeling is that the UK threshold is reasonable, the Australia one is complete nonsense, at least by Sydney standards.

Going abroad, there’s little the Student Loans Company (SLC) can actually do to make me (or anyone else) repay their loans. There is no system through which they can access my income. I’m unsure of their capacity to set the debt-collectors in my direction. I did the responsible thing, and rather than disappear into the shadows, I informed them that I was moving, and told them of my new income. The return message was a blow to the head. I was asked to repay £260/month, about three times what I was paying in the UK. For a time I was to be the sole earner whilst my wife sought a job, and setting up a home in Sydney is… you guessed it, expensive. I asked the SLC if they could, for a time whilst we set ourselves up, reduce the expected repayments. The answer was a cold “No sir, sorry sir, nothing we can (or will) do. Best keep repaying (or else)”. I was unimpressed, and I managed to clear the arrears once my wife found work.

Last night I got a call from the SLC, and in keeping with expectations, they didn’t fail to ruin my day. Apparently, I hadn’t returned some forms that I never received, informing them of my current income. This was meant to happen 7 months ago. Rather than phone or email me to inquire what was up, the SLC decided that a more appropriate response was to bump up my expected payments to £350/month, and inform me only 7 months later that I was in arrears. To legitimately be asked to repay £350/month, I’d have to be in, I’d guess, the top 5% of wages in Australia. Sadly, I am not an investment banker. I expressed my distaste at this policy, and was informed that my opinion wouldn’t change anything, this was set by the good ol’ UK government (only I’m not dead sure it is, the SLC was privatised some time ago).

I am actually paying back the loan faster than expected, because for now at least, I can afford to do so. However, some time soon I will likely wish to start a family. When I do, my family will probably drop back down to having a single income to support 3 for a while, and I doubt very much I can continue to make payments at the rate requested. I asked if the repayment schedule can be amended in light of my personal circumstances, should the time come.  I pretty much got a “No sir, sorry sir, nothing we can (or will) do. Best keep repaying (or else)”. I consider this to be highly irresponsible as a lender, and this gets to the crux of my substantial dislike of the SLC.

In my opinion, a responsible lender tires to work with the debtor to ensure that the debt is cleared as fast as it can, without crippling the debtor. I would prefer to see the SLC pursue cooperative and consolidatory relationships with its debtors. I hope it is taken as a sign of good faith that I’m paying back my loan at a faster-than-requested rate, and that I’ve been proactive in keeping them in the loop when I left the country. Not so. If it is genuinely the case that an unwaveringly inflexible policy on repayments, in which communications with debtors take an aggressive and obstinate tone, really the only way to recover the debt for some people, then I am still appalled that this policy is applied across the board. It does little for their reputation. Policy makers from a generation who’s parents somehow found the means to give them a quality education at little cost (grants, not loans, used to be a ‘thing’) are instead turning to the next generation and saying “sorry, I know I got all this largely for free, but not you. No, we’re going to load you up with a sizeable house-deposit’s worth of debt. Good luck getting on the housing market. Oh, by the way, we’re all getting older, haven’t put enough money away into the pension schemes and have failed to responsibly manage the health care systems. So you’re probably going to have to pay that too. Have a great life. And that impending climate change disaster thing, well… never mind eh?! I’m sure you’ll find a good way of dealing with that.” As you can tell, this makes me angry. I feel the younger generation is getting a pretty rough deal in many regards. And the SLC? This scheme was set up by the government, which is supposed to represent the people. They work for us, not the other way round. I feel that the way this institution is operation is very, very wrong.

Sorry for the ranty post. On the other hand, I feel a lot better now :)