Student Loan Debt Management Plan – Here’s Your Options
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
For free & impartial money advice you can visit MoneyHelper. We work with The Debt Advice Service who provide information about your options. This isn’t a full fact-find, some debt solutions may not be suitable in all circumstances, ongoing fees might apply & your credit rating may be affected.
Struggling with student loan debt? You’re not alone. Many people find it hard to manage this debt. In fact, over 170,000 individuals visit our website each month seeking advice on debt solutions.
In this article, we’ll:
- Give you tips if you’re behind on student loan payments
- Talk about old-style and new-style student loans
- Discuss if student loans can be part of a Debt Management Plan (DMP)
- Explain how you might delay paying your student loans
- Look at other options if you’re having a hard time paying your debt
Some of our team have faced the same debt problems, so we know what you’re going through. We’re here to help you find a way to manage your student loans.
Can Student Loans be Included in a Debt Management Plan?
Debt management plans are informal debt solutions which is why many people are often confused about what types of debt can be included within them.
DMPs cover all types of unsecured debts. Debts that are priority debts and/or secured debts cannot be included within a DMP.
Student loans are non-priority debts and thus, they can be covered by a DMP.
If you’re considering getting a debt management plan for your student loans, it’s a good idea to get debt advice from a professional before setting it up. Your potential DMP provider can provide you with advice regarding this as well.
This is because there’s a chance you may be able to manage your student loans without actually getting into a debt management plan.
If you’re earning below a certain threshold per annum, then you can apply to defer your student loans. This can give you enough breathing space to improve your financial situation.
How a debt solution could help
Some debt solutions can:
- Stop nasty calls from creditors
- Freeze interest and charges
- Reduce your monthly payments
A few debt solutions can even result in writing off some of your debt.
Here’s an example:
Situation
| Monthly income | £2,504 |
| Monthly expenses | £2,345 |
| Total debt | £32,049 |
Monthly debt repayments
| Before | £587 |
| After | £158 |
£429 reduction in monthly payments
If you want to learn what debt solutions are available to you, click the button below to get started.
What is the Difference between Old-Style and New-Style Student Loans?
Student loans can be broken down into two different categories, namely, ‘old-style’ or ‘new-style’. The category under which your student loan falls under depends on when your course started.
If your course started before 1998, then your loan is an old-style loan. Old-style loans are also known as mortgage-style loans.
These kinds of loans are registered under the Consumer Credit Act (CCA). Old-style loans are typically repaid over five years if your course lasted less than three years. If your course lasted more than three years, then it’s payable over seven years.
If your course started after 1998, then it can be considered to be a new-style loan. New-style loans are also known as income-contingent loans.
As the name suggests, these types of loans are deducted straight from your wages as monthly instalments.
It’s important to note that deductions will start being made from your wages only after you start earning above a certain threshold.
Thousands have already tackled their debt
Every day our partners, The Debt Advice Service, help people find out whether they can lower their repayments and finally tackle or write off some of their debt.
Natasha
I’d recommend this firm to anyone struggling with debt – my mind has been put to rest, all is getting sorted.
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What to Do if You’re in Arrears
If you’re struggling to make payments on your lines of credit as well as struggling to pay your student loans, then you may need to step back and re-evaluate your budget.
It’s important that you address this as soon as you can because the longer you wait, the worse your financial circumstances will become.
Always try to avoid debt management companies that charge a fee for offering debt advice. Obviously, if you’re struggling to make your debt repayments, you shouldn’t be taking advice from an agency that charges you money for it.
» TAKE ACTION NOW: Fill out the short debt form
Are You Struggling with Student Loans?
When it comes to student loans, negotiating with creditors using a DMP to reduce monthly payments can be quite difficult.
There’s a chance that your debt management company might not be able to negotiate reduced monthly payments within your DMP. However, what they can do is overhaul your budget so you can better manage your debt within the DMP.
Please note that in a DMP, you will only be required to pay what you can afford to pay. Your DMP provider will make sure of that.
Your debt management company will also help set up your debt management plan and deal with your creditors to ensure that the plan runs smoothly right till its end.
