/ Money

Does the Student Loans Company owe you money?

Student depressed looking at bills

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:

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?

Katie says:
3 November 2014

I paid off my student loan in January 2012, and made a series of overpayments which I was refunded.

in July of this year (2014), the SLC started taking deductions from my salary, apropos of nothing and without notifying me.

It took me two months to get to the bottom of it, and a further month to get some money refunded. But the SLC have said that HMRC are telling them that in July 2012, my employer at the time refunded me £331 and therefore they need that back.

I supplied all my payslips from 2012, which show no refund was made. I then was told that my employer definitely made the refund because HMRC has a note of it, and they are still refusing to give the £331 back and suggest i take it up with my former employer.

My former employer had 4 staff in 2012. He is a personal friend and neither of us has any recollection of him writing me a cheque (he doesnt have a cheque book) or giving me £331 in cash during that year! Why would he?! He didnt owe me the money. He’s having his accountant look into it. I have no idea how HMRC think this refund was made to me if not in my salary as they won’t provide any evidence.

The SLC refuse to answer my emails and I cant get hold of anyone on the phone. The only time they response is when I get my local MP involved.

As soon as I have absolute confirmation from my ex-employer I will be raising with the Ombudsman.

But I am still £331 down from July. it’s now November. It’s frankly criminal that SLC can just remove money from a person’s salary and provide no evidence as to why they’re taking it.

Tom H says:
13 November 2014

The student loan company are just in the dark ages!

I contacted them as I thought I might have finished my loan and I’m glad I did. My loan was already paid off at the end of the 2013-14 tax year and they owed me £1300 from that year, but they are still taking £300 each month so they’ll owe me even more once I cobble together my old pay slips.

Ridiculous that they don’t contact you directly when you’ve already paid the whole loan off and ridiculous that they still don’t accept emailed payslips (the first comments on this thread complaining about this are from 2011).

I will end up over-paying my student loan by about £4000 – a massive amount of cash!

Hannah says:
10 February 2015

I repaid my loan in November 2013 and provided payslips as evidence. I received a refund and thought that to be the end of the matter. February 2015 is the first time since then that a deduction has not been made.

I have complained to SLC, and received a standard ‘this is how we do things’ e mail in reply. I escalated my complaint and picked their response apart by highlighting several occassions in their own schedule of events where my deductions could have been stopped.

Their second response is basically saying ‘we told HMRC to send a stop notice’. But no one follows up to see if HMRC received the instruction, informs the employer, and whether the employer receives it and actions.

So my complaint has fallen into a black hole of passing the buck with no real hope in getting a satisfactory response. I have wasted time and money on phonecalls, printing and postage but I now am at the point where I dont think its worth any more of my time and effort.

Jennifer says:
16 February 2015

I am at my wits end with this. I paid my student loan off in 2007. However, HMRC did not send end of year information from 2004/2005 tax year until 2013 and so student loans kept taking repayments as there was no evidence of my repayments for that year, where I paid off about £6k worth of the debt.
Now they have that information, it comes to light that they dont have it from 2003/4 tax year either. I sent them 3 payslips to show massive repayments of about £300 – £500 a month for that year. Despite the fact that I quite clearly therefore had made payments, worked for the same company, and it the case that they just dont have the information from HMRC, I am still having to pay my loan every month!
They have contacted HMRC who have said they have no further information to offer them, so unless I can find the rest of my payslips from 10 years ago, I am screwed and will have to continue to pay off the £2k they say I still owe, when actually, they probably owe me about £4 – 5k!! What is even more galling is that I will probably pay that £2k back way before the end of the tax year so then they will owe me even more money as they dont stop taking payments even when the balance is 0 – until HMRC tell them to at the end of the tax year!!!
Its just an absolute joke and essentially, I am being robbed!
I contacted Financial Ombudsman who said that they dont deal with SLC complaints after about 1995, that the SLC will go through their complaints procedure and then appoint an external body to investigate. What??? So they are in charge of their own complaints procedure and can decide when to go externally, meanwhile they continue to rob me every month!!!!
SOMETHING has to be done about this!! It is a disgrace!!

Jennifer says:
16 February 2015

Well I have just had a hunt and found 2 more payslips from that year – one which is the final paycheck for the year so shows the accumulative amount of pay i received in that tax year. Surely it must be pretty simple for them to work out how much student loan I paid from that???
I will send them off….watch this space!!

Its a disgrace. We paid our son’s student loan off in 2001, 14 years ago after getting a redemption figure. They are now saying we had a refund of £235 in 2010 and are adding interest we did not. Two days ago they helped themselves to £158 out of my son’s wages without any warning. We can’t prove now we paid it off as we don’t have the paperwork and it was paid from a Bradley & Bingley Building Society account and they have gone out of business. We seem to be stuck with a mess and a headache.

This comment was removed at the request of the user

This comment was removed at the request of the user

This comment was removed at the request of the user

Hi Duncan, please can you forward the email you received to conversation [dot] comments [at] which.co.uk. Thanks very much.

This comment was removed at the request of the user

This comment was removed at the request of the user

Hi Duncan, yes we’ve had some trouble with the server today. We’ve given it some more juice. Sorry about this. If you have any website feedback please share it here: https://conversation.which.co.uk/technology/welcome-to-the-new-which-conversation/#comments Thanks

I found this article after searching online for HMRC still taking payments after student loan paid off but I am now thinking that despite what SLC tell me, it is in fact their error. I paid my loan off in November 2015 and in April 2016 they are still taking payments. I was declined a mortgage because Imy repayments were deemed unaffordable while repaying my student loan and had to get a letter from SLC stating I had repaid, which then allowed my mortgage to go through. This was a very stressful waste of time!

This article was published 5 years ago and it is sad to see nothing has changed.

Mortgage?… a veritable case of out of the frying pan into the fire…. These thieves never lend you any money, they use the legal power of your signature to digitally create the account (creating inflation which everyone pays for) and then try and charge you interest on your own money that you created….. They are interlopers and this is the reason why they can NEVER prove where the money came from that they allegedly lent to you.

Earlier in the year I received over £900 back from the SLC for over-payments on the previous year and was told that I would have to furnish payslips for for any outstanding monies owed. The HMRC are still taking payments from my wage. From what I have read above and on other websites, I believe that the SLC are under instruction from the government to do exactly what they are doing in order to collect as much money in as possible. One only has to look at how the ill and disabled are assessed for their benefits and subsequently cut off. What is going on is most certainly immoral if not illegal. Not only are they overcharging those who were forced to take out loans in order to fulfill their dreams of teaching or pursuing their chosen career paths but they are making it extremely difficult for one to get that which is owed back. No organisation can be so inept naturally at their job. I now intend to involve the ombudsman.

Nicola says:
7 January 2017

I have the opposite issue. I’ve recently returned to work after a period of maternity leave. Deductions continued to be taken throughout my maternity leave despite my income being less than 600 pcm (I do still have a few hundred to be paid and we’re a two income hh so this wasn’t an issue). However since starting back to work and my income doubling I noticed the last two payments were only £3 and £2 per month respectively. Having check my payslip for earnings due this month and the payment hasn’t been deducted at all! Can’t get through to them to find out why and am now worrying about interest payments, credit defaults etc.

Nicola, consider it a blessing and DO NOT try and help the thieves.

I recently got screwed when I took a short term contract after a long period of unemployment. They calculated my repayments on my weekly payslip and stole over 200 GBP per week out of my children’s mouths even though my annual income was below 14K and the contract was for 8 weeks! My advice is if you can figure a way NOT to pay them, do it. Student loans are immoral, the people who instigated them were immoral and the people who try to defend them are immoral. Take the moral high ground and disappear from their corrupt seedy world of usury!

If you take out a student loan then it is your obligation to abide by its terms. If you are not prepared to do so, then you should not take the loan in the first place, surely, particularly if you regard it as “immoral”? I do not condone any malpractice by the SLC, but equally this is not an excuse to retaliate with malpractice by borrowers.

Sorry to hear about your experience, John. However, we’d never recommend not repaying a loan. Have you tried complaining to SLC? Here are the details: http://www.slc.co.uk/contact/making-a-complaint.aspx

I over paid my student loan contributions after taking a short term contract at the start of the tax year. Student loan took £400 of repayments even though i earned well under the £17,000 threshold for the year. I’ve now called them multiple times and though they agree I am owed the money apparently their repayment system isn’t working and they don’t know when they’ll be able to process my refund. Its outrageous as if you are at all delayed making a payment to them they’d hound you with letters and fines but they can have my money for over a year and still not provide me with any timeline of when I should expect to receive a refund.