Student loan sale is a mess

Personal Finance Editor

The Government has sold people out over Erudio Student Loans, according to money-saving expert Martin Lewis. He blogged yesterday about the students from the 1990s who are being targeted by the firm, which bought the debts from the Government last autumn.

Those concerned have had their loan repayments deferred because their wages have stayed below the annual £28,775 earnings threshold since they graduated.

Yet, as I have reported several times in these pages over the past month, many have had money wrongly snatched from their bank accounts by Erudio, which is owned by the debt collector Arrow Global.

The move has left some facing overdraft charges or a credit-score impact and many more with excessive worries or sleepless nights. (To be fair to the firm, it has put right all those I’ve drawn to its attention so far.)

Others have complained about “invasive” questions from the company, which is now forcing tens of thousands of people to fill out long forms with details about their employers, their income and child support.

 Many are also concerned that Erudio is reporting them to credit reference agencies, even though their outstanding loans have been deferred. (On that issue, credit reference companies claim that the information may actually improve a person’s credit score.)

Mr Lewis is scathing about the company. “Erudio hasn’t been fit for purpose,” he writes. “I’ve had woeful reports of its customer service, and some people haven’t even been able to get through to it.”

He said the blame for the mess-ups and distress lies with the Government. “It has mishandled and miscommunicated this,” he said. “Having seen this mess, it would take a lot of persuasion to get me to believe that it’s worth the risk to sell any more of the student loan book.”

I agree. The Government took £160m from Erudio in payment for these loans and has since washed its hands of the issue. But it should not cast us adrift simply in the name of profits. 

s.read@independent.co.uk

Twitter: @simonnread

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