Money matters: what lies in wait for Thailand's loan dodgers?


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I once fare-dodged my way from Bath to London. My friend Elliot and I spent several hours hopping on and off trains, hiding in toilets, and using our cellphones to outwit the ticket conductor. It was one of the most terrifying experiences of my early life.

There’s an age-old rumour that if you stay out of the UK for seven years, your student loans gets wiped clean. I looked into this rumour about two years ago and found out that it’s actually completely false. The student loan can only be wiped, according to the UK’s Student Loans Company, in the event of death or if you make it to pensioner status and still haven’t finished paying it back. I’m hoping for the latter.

I’m kidding, of course. I would love to be able to pay my student loan back, but based on the salary I earn in Thailand, I don’t even qualify to make the minimum payments as outlined in my contract with the Student Loans Company. I have a massive debt of something like £12,000 hanging over me. Every year I receive a letter asking me where I’m working and living and every year I end up with another 12-month grace period.

The big question is: When will I be able to pay my student loan back? This horrible debt continues to amass interest and is a stark reminder that all those days spent as a carefree student came at a price. When I graduated, I found myself with no money. I was actually about £1,600 overdrawn. Being a fresh graduate, I really didn’t care.

I’ve been told that the American system with regards to student loans is much less forgiving and that repayments are mandatory, regardless of how much money you earn or where you are working.

I had been living under the assumption that one day I would net an amazing job and from that point on I wouldn’t have to worry about my student loan. And yet here I am, four years after finishing university and not quite able to say I’m working my dream job.

There’s no way I can be the only expat in this situation. I suspect that most of the expats here around a certain age have some sort of debt following them everywhere they travel. Heck, I’m sure that escaping debt is the reason why some people come here in the first place.

My biggest fear is that I will receive a letter informing me that my student loan has been turned over to another loan company. That would spell major trouble as the new firm would not be as forgiving as the Student Loans Company. There is also the possibility of being served up a court order and having to pay the debt in one lump sum. However, this is usually reserved for people who fail to make payments and earn above £15,000.

At the moment I’m giving some serious thought with regards to what to do about my student loan.

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10 thoughts on “Money matters: what lies in wait for Thailand's loan dodgers?

  1. Up until the late 90s UK student loans would get written off after a few years but they changed the rules in 99/00 extending the limit until retirement age.

    They can change the rules at any time so you need to keep up with the SLC or you could get into trouble.

    Right now they have established a regional system that affects your minimum earning threshold and reduces it if you live in certain countries.

    Now in Thailand and SE Asia the threshold is only 3,000 GBP per year.

    If you get paid in foreign currency then the next year or so could be a good time to pay off your loans as the GBP exchange rate is expected to continue dropping dramatically.

    I not think you can rely on waiting until retirement and having your loans written off as the government will probably change the rules again as they don't have the funds needed to keep the system going.

  2. Hmm, not a comfortable situation. But it is because of people not paying back their loans that economies certain problems – to put it mildly.

    Get clear with it – or this money will always remain a thorn in your mind.

    It's not money you didn't use for that.

    I'd call it simple social responsibility to get even.

    But then again, look how student loans are handled in Thailand … Some honest souls pay them back.

  3. Matt, you are indeed fortunate that you racked up this debt in the UK. In the US, this matter would have long ago been referred to a collection agency, and they would have taken you to court. There could then develop legal repercussions and your credit rating would be shot, no credit card, etc. (Though leniency in this regard did bring a certain hell now known as the sub-prime mortgage crisis).

    I'm gobsmacked at how laissez faire the Brits are about this. It's almost like an honors system. What's the default rate then? 50% or higher wouldn't surprise me.

  4. Not sure how you are still avoiding paying it back.. I was deferring it every year but got a shock in December last year when i was told that the minimum earning requirement for Thailand is now for some reason £6000 a year.

    You can see the country by country list here:
    http://www.slc.co.uk/thresholds/

    After sending proof of my pitiful Thai salary they are now taking 80 pounds out of my account each month. (My student loan is about 5000 pounds).

    I guess the same will happen to you shortly – cos surely you are earning more than 6K?!!

  5. The threshold thing is strange.

    I told the SLC that I earned over the threshold and calculated that I had to pay about a grand to them.

    I sent letter and proof of earnings but then they told me I was good for another year.

    Silly people….

    I would highly advise anybody earning in a foreign currency to wait a few months before paying back their loans.

    The GBP is going to continue losing its value over the next few months.

    You will pay off your loan faster with a favourable exchange rate.

  6. You're considered pretty wise to keep a careful eye on your leftover student "obligations". I've a golfing buddy that carried his student loans all the way until his mid-30s! He'd forgotten all that after he live in Asia over the past decade & was shocked at the accrued interest on that outstanding debt upon his return.

    Needless to say, he's an American … ;-)

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