Does the Student Loans Company owe you money?
Something’s gone horribly wrong with student loans. We’ve found that 57,000 former students are waiting for refunds worth £15 million. All because the Student Loans Company and HMRC can’t communicate.
The amount owed to ex-students came to light after Which? heard from several disgruntled graduates.
They found that payments were still being taken from their accounts even though they had already faithfully repaid all the money they owed.
A confusing and inadequate system
It seems the problem is that the repayments system is woefully inadequate. Here’s how it works:
- Student loans are repaid through monthly Pay As You Earn instalments that are managed by HM Revenue & Customs (HMRC).
- Repayments continue to be taken until the Student Loans Company (SLC) notifies HMRC when a loan has been cleared.
Sounds simple, right? Nah, not a bit of it. HMRC and SLC don’t co-ordinate their records until the end of the financial year. At this time they compare notes and if the loan has been repaid, SLC kindly tells HMRC to stop taking payments.
Of course, if you still owe some money – even one month’s worth of instalments – SLC gives the green light for HMRC to continue processing payments for the rest of the new financial year – unless they are told otherwise. This means your account could continue to be debited for another 11 months after you completed your repayments.
Detriment, what detriment?
SLC maintains that overpayments aren’t a problem because you’ll get your money back at the end of the next financial year, so borrowers suffer no financial disadvantage. But that’s rubbish.
Most people who are paying off student loans aren’t wealthy. So it’s possible that the extra overpayments do put them in a tight spot, such as when their rent increases or, heaven forbid, when Christmas is looming. They may end up taking out credit cards or loans, which each come with their own costs.
Given all the furore surrounding tuition fees, the already sizeable level of student debt is only going to rise, leaving more ex-students paying off even more and for longer. Surely it’s time for SLC and HMRC to get their acts together?
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Philip Cowan
Thanks for highlighting this issue. My student loan was paid off a year or so ago but I was not informed of this by the Student Loan Company until recently. However, even now it continues to take money directly from my wages (last payment made in December 2010).
I only found out about this when I changed jobs and, even though money was still being taken paid, SLC sent a sniffy letter demanding to know my new employee details. When I finally got through to them by telephone, they informed me of my overpayments.
Some of the money has been repaid (amounts due from December 2009 to March 2010), but I have had to submit evidence of payments since April 2010 to get back my own money (bizarre but true) — and I am still waiting for this to be processed.
Furthermore, SLC is STILL taking money from wages, even though I called them again to tell them to please stop.
Two small asides to this tale: my bank has charged me more than £100 in overdraft fees and my mobile phone company has charged me a huge amount to call the SLC customer services number.
It seems like such a battle just to stay on top of these companies and make sure they are not robbing us.
Stephen Jamieson
I can only add to the frustration expressed by this article.
Despite repeated attempts over a 5 month period to stop the automated salary deductions, SLC seem to STILL be incapable of contacting HMRC to issue a ‘stop command’!
Yet another month goes by and another large slice of my earnings vanishes into this inexplicable government black hole!
I have at least 2 colleagues who are in exactly the same situation.
The most frustrating part is that there appears to be no path for escalation or accountable authority in which to challenge.
Can anyone shed some light on whether anyone is taking any notice of the scandal that is the SLC?!
Chris
These people are theives, not only have they been silently charging me without ever sending me a statement, now they owe me money aparently I have to get copies of all of my payslips and send it to them as they dont know how to use a calculator to add up when it was paid off then subtract the additional. Idiots and theives.
lorna
I found out today that I have overpaid for over a year (£170/month) this is a substancial part on my income…I am overdrawn nearly every month because I find it diffiuclt to make ends meat living in London, this money would have gone a long way to making my monthy wage go a lot further. I am absolutley outraged that they can do this, particulary in this finacial climate. It amounts to stealing!
Al
I notified SLC that I had finished paying my student loan in February (Calculated from my statement and pay slips) They said they would inform HMRC and they would stop. In March they took another payement. I rang SLC again they said it can take up to 28 days to stop. So in April, when they took another payment I was not happy!
They now have taken over £600 extra!
Still waiting for it to be repayed!
tashalouiza
I paid off my student loan in August. Despite eleven letters (and counting), we are now in a new financial year and those thieves are still taking deductions through PAYE. They have repaid £651 stolen during August – November, and still owe me £1600. I am on a reasonable salary, but losing this amount of money every month really is not reasonable: it is equivalent to the cost of maintaining, taxing, insuring and fuelling our car, and paying for my monthly tube ticket!
Lizzie
Well where do I start……
My husband paid off his student loan when he graduated in 2007, he entered full time employment and has been ever since. He changed companies in Jan 2010 and the SLC sent him a letter to say he owed them money. He sent across proof that he had paid off the full early redemption amount they sent across, this took about 4 months, funny that it took that long and it probably had nothing to do with it entering a new tax year. He gets bonuses at work so normally pays £200 a month, but when he gets a bonus they take around £600. We’ve added up they owe around £4,000 now not including interest. He hasn’t had his p60 yet and the companies accountant seems totally incapable of sorting out his statement of earnings. This is really getting on my edges now as we recently got married and paid for the wedding ourselves, this was made a lot harder due to them helping themselves.
I don’t get how they can say that all monies have been repaid, do absolutely squat about it, take their sweet time in sorting anything out, are happy to say that he has reaoid, yet we are stuck as the accountant is useless.
It’s no wonder working people in this country are sick of the way they are treated, I owe student loans money and am quite happy to repay, but for him it makes my blood boil.
Ian
It is so frustrating. They still keep taking the money even though I’ve twice been assured that they won’t take any more. The most laughable thing is that I had to send off copies of my payslips (April to August) so they’d be able to refund me – so I photocopied them …. BUT apparently, the date on the July payslip was ‘unclear’ … and so they didn’t refund me that! Common sense says that if I’d been paying £100 in April, £100 in May, £100 in June, and £100 in August, then there’s a HIGH probability that I’d also paid the £100 in the July too.
So, I’ve had to send another copy off, along with September’s payslip too because they still took £100 in Sep after assuring me that they’d been stopped. I called them, and they assured me that they’d definitely be stopped from then on.
GUESS WHAT!!! October’s payslip “Student Loan Deduction £100″
ALL YOU NEED IS A BOX IN EXCEL WHICH SAYS – ‘IF the amount payed <= 0 THEN STOP TAKING MY MONEY!"
Vicky
I have now received two refunds. One in July last year for £1221 and another in October this year for £1058. Nothing other than a letter to say I am due a refund has been sent. However, I have just had a default notice appear for an amount of £388 on my credit file for my other loan from 2009.
This is because I stupidly didn’t fill out my deferment form in time which is my own stupid fault, however, the payment is not showing as settled even though it was paid and now I have a default on my credit file until 2015. I’ve worked so hard over the past few years to build up my credit rating with all my accounts showing “satisfactory” and now this big red default is showing. Had SLC not been taking £85 a month from my bank that I shouldn’t have been paying, maybe the default wouldn’t be there in the first place. It’s absolutely infuriating.
When I contacted them this week regarding the default, they tried to tell me that it was because I haven’t deferred this year! This was incorrect information to start with. I had already spoken to them weeks ago after they gave me the option of deferring or making a payment. I chose to start making payments (is this not a good thing?); a direct debit was set up by them starting this month, also covering the last two months. Then, after my frustrating conversation with them regarding the default, I received a letter 2 says ago (17th) dated the 8th November, saying I am in arrears for £60.20 and I have charges of £20!! What the hell is going on?!
Has anyone had any success with these issues? I’m off to Citizens Advice!
Amanda
The SLC paid my university an extra year of tuition fees without my authorisation and now they’ve added it to my balance so I’m 3k more in debt than I should be! They say I need to wait 4 months for this to be corrected
Patrick Steen
Oh that’s terrible. Make sure they don’t charge you for inflation on that 3k
Amanda
They assure me this will be accounted for but after my recent conversations where they don’t even seem to be able to use a calculator properly, I am doubtful! And when I tried to make a formal complaint I was asked ‘But why do you want to complain, it will all be sorted out by Summer?’……grrrr 3k is not sweetie money…that’s a massive figure to me!
Amanda
And what worries me more is that at first no one at SLC agreed that there had been an error until I sent them my calculations based on my notification letters. I just wonder whether there are people who never even realise there has been a mistake!
Vicky
Hi Amanda,
I was fed up about being fobbed off so i contacted the Financial Ombudsman who immediately sent notification of my complaint to SLC and sent me a copy in the post. They were really helpful and quick. I’ll see what happens next.
0800 0234567
It may be worth you giving then a try?
Thanks, V
Amanda
Hey Vicky!
Thanks for that tip – I think I may do this
I was going to call them later and say that I was going to speak to a solicitor because it amounts to theft! Not sure if that is too heavy handed. Last time I spoke to them the guy told me to go and pester my university to re-pay the SLC! I don’t see why that’s my job when I never authorised the payment in the first place 
Frustrating!
Amanda
Vicky
I’ve had the same, I have a book now that I write in every time I speak to them with names and dates and times.
I had to chase them for months every week to get them to sort out the student loan I had overpaid! When HMRC and SLC got their act together, my employer received a stop notification in someone else’s name. Again, I had to write to both to get them to sort it out. This will be the first month after two years of paying my loan off that SLC don’t take any of my money! Yippee!
Word of advice though, try and write to them and send everything recorded. It’s a right pain in the you know what’s but they have tried every trick in the book with me including “we couldn’t read your wage slip” or “we haven’t received you letter”. I did both, letters and calls to back them up. I must have spent about two weeks of full time emplyment sorting it out. They owe me wages!
Definately call FO though. Solicitors cost money!
Good Luck!
Amanda
Thanks Vicky – I will start writing everything down in future! They are a slippery bunch indeed – twice I haven’t had my phone conversation logged as having occurred when I phoned back :/
Makes me wish I never took out the loan in the first place
Good luck with sorting yours out too!
Amanda
Dan
Hi,
I received a letter stating that my student loan would be paid off with a final payment from my July pay. However the SLC has continued to take payments in August and September.
I really can’t understand how they can continue to take payments when I advised them in writing a month prior to paying my loan off to stop taking payments in July.
Secondly I have written letters in August and September, including copies of my wage slips as evidence they are still taking payments.
Following several calls to SLC, they claim that nothing will be taken out of October’s pay. However I am sceptical.
Watch this space for my progress (or not).
Any advice let me know
Cheers
Amanda
In my experience you have to be very very firm with them and emphasise that you’re not happy being stolen from! I think sometimes people think that as long as the spreadsheet balances at the end of the day, then it doesn’t really matter! This is obviously not the case. Start a formal complaint via email (details on their website) and cc the Financial Ombudsman
Worked for me!
kw
Just sent the Student Loans Co a SMALL CLAIM (for any amount in dispute up to 5k) from your local county court for the money they continue to take after the debt has been paid off. It will cost you approx £150 -£400 depending on how much per month they are stealing from your salary. The judge will order them to stop immediately and to pay the cost of the court case, and your small claim fee, and will award you interest. Do this immediately – the more people to do this – the rules will be changed quicker. You cannot argue with idiots.
Amber
Fair enough it’s a bit of a hassle and not exactly the best thing on your wallet. But this company gave us the money in the first place to fund our uni/college. I think a lot of your words are unfair and calling them idiots and blaming them for everything, what you need to remember is student loans works within a network of the government and hmrc and all need to run smoothly too work. I spoke to a really helpful young boy at slc when I phoned regarding my refund. He explained that in order for my deductions to stop hmrc would notify my employer. 3 months later and numerous requests to put the stop through I received a phone call from student loans who advised me that it was actually my employer who hadn’t updated his details with Hmrc and so they couldn’t find him to tell them to stop taking my student loan off my salary ergo my employers fault. I had to send my payslips to them as they only receive word of my deductions on a yearly basis and apparently that is the procedure set buy the business innovation and skill department and not student loans themselves. They just follow line. At the end of the day I received my money back with interest and that was that. Again it may be a bit of a hassle but I got my money back at the end of the day, so I wouldn’t exactly call the, thieves……generally thieves don’t return your money. A x