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Student Loans Company – learn your lesson, stop overcharging

Student doing sum at chalkboard

Forget the education of their customers, will the Student Loans Company ever learn? It appears not – months after we found students being charged for loans they’d already paid, the same thing’s happening again.

Towards the end of last year Which? reported that 57,000 former students were waiting for refunds totalling £15 million. The problem was that the Student Loans Company (SLC) and HMRC couldn’t get their act together and communicate to one another when students had paid in full.

One year on and you’d expect the problem to have been rectified, but it hasn’t. In fact it’s only got worse. Recent figures show that the SLC overcharged graduates by £22.5 million, meaning the average borrower was owed more than £550.

No harm done? Yes there is

Back when we looked at this, the SLC claimed that everyone would get their money back, and no real harm was done. How would they know if they can’t even keep tabs on when someone has paid off the money borrowed in full? Are we really to believe this?

I don’t. I’d wager that a fair percentage of students who thought they’d paid off the last of their loan wouldn’t like to settle for this brush-off. How many of these graduates will find themselves struggling to budget for the month, left in the red due to unpaid credit card bills or overdrafts incurred because they expected to have a little more cash in their accounts?

How graduates are affected

Judging by the comments left on our previous Conversation, many graduates would argue that this has caused them great harm. One ex-student, Philip, told us:

‘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.’

Lorna said she had overpaid to the tune of £170 a month for a year:

‘This is a substantial part on my income… I am overdrawn nearly every month because I find it difficult to make ends meat living in London, this money would have gone a long way to making my monthly wage go a lot further.’

And Tashalouiza pointed out that the £1,600 she was owed was the ‘equivalent to the cost of maintaining, taxing, insuring and fuelling our car, and paying for my monthly tube ticket!’

These graduates, and others, have one hell of a battle on their hands trying to get their money back, if the lack of competence exposed is anything to go by. Judging by the recent criticism of HMRC, and the SLC’s lack of ability to tell the Treasury to stop taking payments when the debt’s been cleared, I reckon that this won’t be the last year we hear of this debacle.


Can students claim interest on the money they’re owed? HMRC would charge it, so why not students.

And I wonder if heads will roll, as clearly there is an ongoing problem which management have failed to correct.

Phil says:
2 August 2011

Err, have I wandered on to the Daily Mail website by mistake? Here we have a serious article about student loans and to illustrate it? A pneumatic blonde in a strappy top; but it’s OK because she’s doing some complex maths on a blackboard. Couldn’t you find a picture of Katie Price in a gymslip?

I’m not offended it’s just that I thought Which? could do better.


Hi Phil, sorry to hear you don’t like our picture. We are limited in the pictures we have available, but felt that in this instance a picture of a real person would be preferable to dull images of money or bank statements. We obviously have different outlooks – the woman in the picture simply looks like a student to me – but apologies if it has offended you.

Phil says:
2 August 2011

As I say i’m not offended just a little surprised and disappointed. After all this place is usually so PC, I got my knuckles rapped not so long ago for describing someone as being fat.

Tam says:
12 July 2012

Good that you’re not offended Phil, however I wonder how many “pneumatic blondes” are by your inference that because of the way they look and dress they are unable to do complex maths … Let’s hope that Which is able to find more appropriate stereotypical pictures for you, perhaps someone in glasses?


Hello William

Yes, you are entitled to getting back your money plus interest.

On a separate issue, I’d really be interested in any comments from those of you who opted into the direct debit repayment option – which is available to those who were in their last two years of repayments. Was it easy to set up? Did it work?

John says:
3 August 2011

I think you’ve missed the point in this article and are blaming the wrong people. I have just finished paying off my student loan and it was quite simple. You do have to be on the ball a bit and notice that you will finish paying your loan in the current tax year, for details of why see below.

When you have a student loan to repay the SLC (Student Loan Company) tells the HMRC to collect 9% of your salary over 15k through PAYE. Your employer then tells the HMRC how much you have paid back to the SLC over a tax year (April to April). The time it takes for your employer to tell the HMRC how much you’ve paid in a tax year varies from one employer to another – this is why I think its your employer who tells the HMRC. My current employer is really quick and lets the HMRC know in June. My last employer was a bit slower and told the HMRC in October. This information is then passed on to the SLC. So if you have a slow employer like my last one your statements will be 6 months out of date when you get them. This means that if you have a reasonable salary the SLC has a hard job of working out when you are due to finish your repayments as the information is receives is out of date. It can’t presume you will make the same repayments as the previous year as in all likelihood it will be wrong, your salary could have gone up/down or stopped.
The SLC do say on their website that you should contact them if you think your going to overpay your loan in the current tax year and then can remove you from the PAYE system of repayment. They will do this if you have less than £2000 left to pay on your loan – including months in the current tax year that your employer and, therefore the, HMRC hasn’t told the SLC about yet. I don’t know where you got the 2 years deadline from, they quoted me a monetary value.
I removed myself from the PAYE repayment system this year, after noticing that I would have overpaid if I didn’t. I changed employer during this period and there is no way that SLC could have worked it out based on 6 month old information. All it took was a quick phone call – no long phone call like others have suggested. By using http://www.saynoto08700.com I was able to use my minutes on my mobile. I told them what my current tax year payments were and they removed my from the PAYE scheme. As my old employer was really slow in sending details to HMRC, I had to send a copy of my old payslips to the SLC so they could close my account.

I hope this is clear.

I don’t work for the SLC – I just think they get a hard time because people don’t read the annual statements which they send out. Yes, they are late and out of date, although as I explained this isn’t the fault of the SLC, but a fault of the system which was setup. Removing yourself from the PAYE scheme is easy and just requires a bit of forethought to work out if you will be finishing paying your loan in the next tax year. If money is tight, surely you will be looking at this and contacting the SLC about it. After all, we are all graduates and suppose to be smart.


Mark says:
20 October 2011


I totally agree with you that we should be looking for the system to change from an annual to a monthly update – but thats about as far as I’d agree with you.

As you can see from my comment below, I was clued up on my loan, and paid a substancial amount early to end my repayments to SLC. However, I now find myself in a ridiculous situation, where the SLC “don’t understand whats happened” yet expect me to do the leg work to recover the large amount of money they have taken from me – or how I describe it – stolen.

I did not at any point receive notification of the £2000 to pay mark, and agree with others that you can face a long wait on the phone waiting to speak to someone (although at times I have been able to someone within minutes).

Oh how I wish for the simple situation you found yourself in, but quite simply, your experience is not the experience of the masses.

My wife also suffered countless problems from the SLC when she was living abroad. Despite writing checks and sending them in advance (as requested by SLC) she would continually recieve threatening letters demanding repayments be made, only to find that when she called the SLC, that there was no issue and her payments had been received.

By the time you add up SLCs mistaken international postage charges, its no wonder that students are being overcharged on their loans – the SLC need the interest to pay for their own incompetence!