Student Loans Company takes overpayments from unsuspecting graduates
The Student Loans Company (SLC) has taken more than £15m in overpayments from ex-students according to research from Which?.
Which? has found that 57,000 ex-students are waiting for refunds from the SLC after excess re-payments were taken from their accounts despite having paid off their loans in full.
Student loans are repaid through monthly Pay As You Earn instalments that are managed by HM Revenue & Customs. While the SLC is supposed to notify HMRC when a loan has been paid in full, Which? found some students were still making repayments 11 months after the loan was repaid.
“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,” says Peter Vicary-Smith, Which? chief executive. “The SLC must ensure they don’t keep ex-students ‘in debt’ for longer than they need to be.”
To make matters worse, when it comes to claiming back excess payments ex-students face a long and complicated reimbursement process. One ex-student had to wait over six months for his excess repayments to be refunded and even then his refund was two months short, Which? reports.
In response to Which? the SLC released a statement saying: “Last year we introduced a Direct Debit scheme to prevent over repayment, for anyone who is in the last two years of repaying their loans. We have contacted over 68,000 customers who we identified as being eligible for the scheme.
“Our advice to student loans customers is to keep track of your balance and repayments by logging on to the Student loan repayment website. If you are within two years of completing your repayments, we will ask you if you would like to switch to repaying by Direct Debit. Switching to Direct Debit means you can choose your monthly repayment date and we can make sure your repayments stop at exactly the right time.”