Posted on December 17th, 2010 | Categories - News
Graduates have been paying back extra on their student loans due to a Student Loans Company error.
Student loan repayments have continued for some ex-students even though they have completed their payment plan.
Over £15 million has been overpaid by ex-students to the Student Loans Company, according to new research revealed by Which?
The study found that almost 60,000 people are awaiting refunds from the SLC after payments were taken from their accounts despite that fact that they had paid back their student loans in full. Some ex-students were even making repayments up to 11 months after their loan has been repaid.
Which? chief executive, Peter Vicary-Smith said: “How is it possible that for at least the second year running the Student Loans Company has overcharged ex-students by millions of pounds? We know that paying off a debt is a stressful experience, so the last thing people need is to find that they’ve been paying out more than they needed to”.
He added: “The SLC must ensure they don’t keep ex-students ‘in debt’ for longer than they need to be”.
The Company said it cannot calculate the amount that needs to be repaid to individuals until employers file their annual tax returns as student loans are paid back through the Pay As You Earn scheme and managed by HM Revenue & Customs.
The SLC said: “The result is that there is a time lag and some borrowers nearing the end of their repayments are likely to overpay”.
The HMRC is supposed to be informed by the SLC when a loan is paid back in full so that money is not deducted from the salary of students who borrowed from the firm during their university days.