Before you ask, I’m afraid the answer is yes, your student loan will follow you around the world.
Whether you’re in China or the Czech Republic, Cameroon or Chile – once your monthly salary reaches a threshold, you will have to start repayments.
But unlike in the UK where your debt is managed for you by the government and your employer, and repayments are taken automatically from your wages, when you work abroad it is up to you to provide evidence to the Student Loans Company (SLC) of your income level – don’t worry, they will send you the forms.
Failure to do so will result in the initiation of a repayment plan, irrespective of your earnings.
If your earnings don’t meet that threshold and you wish to hold onto your wages, deferment is the only way you have to put off payment for a year.
Don’t be mistaken – deferment is not a privilege of working overseas, but a responsibility to yourself to avoid financial distress if you can’t afford to make or keep up repayments.
I’ve been deferring my loan for years, being a low-income earner. Yet despite trying my best, I have still been caught out on occasion, resulting in missed payments and arrears.
So here’s how to handle things when working abroad.
1. Do inform the SLC of your move overseas
Take responsibility for your loan. Set up your Student Loan Repayment account online so you can organise a direct debit.
Some banks charge to make international transfers or for currency exchange, so use a UK bank account if you can.
If you don’t want to pay by direct debit, you can also make one-off payments online or by phone using a credit or debit card. Alternatively, you can make an international bank transfer from any bank.
2. Do make it easy for them to contact you
Provide them with an easy postal address to send your deferment papers to. You’ll need these if your salary falls below the threshold and you want to put off repayments for a year.
Blocks of flats can be risky as it’s easy for post to be misplaced. You can reduce the risk of a dodgy postal system by using your school’s address, as it will be easily recognised.
But be careful that your deferment period doesn’t fall in holiday time when school is closed, or that your post doesn’t end up sitting on the secretary’s desk.
3. Do chase up concerns
If your paperwork doesn’t turn up or if you have any concerns or doubts at all, don’t wait to get in touch. The SLC is easily contactable by email, but you’re better off phoning if you need instant answers.
Unresolved issues just result in non-processed deferment applications or missed payments, both resulting in arrears. Take control of your debt before it grows beyond your economic means.
4. Don’t be afraid to re-negotiate payments and deadlines
You can avoid the unpleasant stress of arrears by advising them of mitigating circumstances, like an accident, that interfere with any part of the repayment process.
Be warned: they will ask for official documentation that must be translated into English, so it might be easier just to follow their deferment procedure.
5. Don’t panic…
…If the SLC suddenly starts taking money from your account or you receive a scary letter about missed payments and arrears.
The chances are the deferment forms are in the post or have been misplaced – there’s plenty of scope for administrative errors so if you have started payments, get in touch with your bank and the SLC and find out what is going on.
Sadly, you will have to settle any arrears until payments are reinstated, or your deferment application has been processed. But once deferment has been accepted, you’ll be happy to hear your application can be back-dated up to three months, allowing you to claim back your money.
6. Don’t rely on the international language of numbers
It is your job to provide evidence of your earnings if you wish to defer payment for a year. If you are submitting payslips, they will need translating into English, as will any other documentation.
Take into account that translation takes time and money so needs to be planned for. To save confusion, avoid payslips that contain anomalies like bonuses and double payments.
7. Do consider a letter from your boss as the easiest option
Instead of translating payslips, send a formal statement from your headteacher. After the preliminaries, three lines suffice, but each line must contain: the month, your gross salary for that month, and the words ‘gross pay’ on headed school paper.
You can save time and secretary stress by typing the letter yourself – then you only need a signature.
8. Do read the small print
Even if you’ve been deferring for years already, it’s always worth reading over the instructions for providing evidence because sometimes they sneak in a change and it’s easy to get caught out.
The same goes for direct debits: keep track of the balance and cancel when you have paid off what you owe.
Chantille Rayman-Bacchus is a secondary English teacher who has been working in British international schools in Spain for 15 years