Graduates Who Leave The UK Could Face Extra Loan Charges

Fri, 18 Feb 2011

Graduates who move abroad for more than three months without letting the Student Loans Company (SLC) know could be tracked down and forced to pay large penalty charges, according to reports.

Finance website thisismoney.co.uk states that most, if not all students, are unaware of a rule that can enable the SLC to demand payments of up to £350 per month, depending on their overseas location. It can also fine graduates £150 if they do not inform the SLC of their whereabouts.

According to the SLC, over 13,000 graduates residing abroad have been forced to pay these charges in the past 12 months, with around 1,500 tracked down via tracing agents.

Many are also not aware that the amount of money they pay towards their student loan changes depending on their new country of residence. For example, graduates who live in Denmark are only required to make payments towards their loan when they start earning £21,000 or more, compared to the current £15,000 threshold in the UK. However, the threshold in many other countries is much less.

Student loan borrowers who inform the SLC of their expected income when abroad before they leave will have their repayment recalculated according to their new threshold.

If, however, the SLC isn’t notified, the individual will be liable for a set 'monthly default repayment', which varies and could be much higher than their normal loan repayments .
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