Erudio Student Loans

Erudio Student Loans is a consortium formed by debt collectors Arrow Global and private equity firm CarVal Investors in 2013.

The firm was the successful bidder in an auction to buy non-performing U.K. student loans in 2013, paying £160m to buy debts of £890m taken out between 1990 and 1998, giving an effective cost of just over 5p in the pound. Of the loans purchased, 46% of the borrowers were earning below the amount at which they were required to make payments, 14% were making payments and 40% were not making any payments.[1][2]

The firm uses the debt collection skills of Arrow to collect more than the previous owner of the debt could, while the cost of the purchase is met by the private equity firm.[3]

Criticism

Since taking over the loans, Erudio has faced criticism from current loan holders and also from financial commentator Martin Lewis[4] for not being able to cope with the large volume of deferral requests and for mistakenly taking cash from loan holders' accounts. Some Erudio customers have also perceived the new Erudio deferment application form to be overly intrusive in comparison to previous deferment application forms provided by Student Loans Company.

See also

External links

References

  1. ↑ Debt firms snap up UK student loans for £160m by Kate McCann, cityam.com, 26 November 2013. Retrieved 29 November 2013. Archived here.
  2. ↑ Ageing student loans sold to debt firms BBC News, bbc.co.uk, 25 November 2013. Retrieved 29 November 2013.
  3. ↑ Government sells £900 million in student loans to debt collection company by Simon Read, independent.co.uk, 26 November 2013. Retrieved 29 November 2013.
  4. ↑ Lewis, Martin. "Money Saving Expert blog".



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