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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.

Lucy says:
10 August 2015

I am having issues with repaying my loan, I have less than £1000 left to pay on my loan, so I called to ask to switch to direct debit or pay off in full. I was told I couldn’t because it takes 90 days to set up the direct debit and I would have likely have paid all the monies off, so I asked to pay in full, and I was told they don’t know when the stop notification would be sent to my employer from HMRC so I would probably end up paying twice.

Feel’s like I don’t have any options here! I am also starting a new job in 2 months, and asked what I could do to ensure I wasn’t going to be in a position where I overpay. I was told to call after my last payslip from my current employer and pay off the full balance! Here’s hoping they don’t then take further deductions from my new employer and the stop notification is issued in time!

I have very little faith, as they lost my partners repayment information for a whole financial year notifying him that he hadn’t repaid anything- so he had to supply payslips to confirm!

Concerned I will end up overpaying, then battling to get the money back- despite the fact I am willing to pay by DD or in full now.

Hello – I have changed jobs, and my old employer incorrectly produced a P45 saying that I had a Student Loan, despite not having had a SL account in over 20 years which was paid off shortly after.

My former employer realised their error and sent me a letter of apology and the revised P45. This was submitted to my new employer, but too late, the student loan deduction for non existent loan was deducted.. £137 out of my first pay!

My new employer has the letter from the old employer stating the error and the revised P45. They have referred me to HMRC for the refund of £137 . HMRC have referred me to Student Loans.. Student Loans have confirmed that I have no loan with them and as the account is closed, and has been for some time, there is no letter that they can produce saying that I owe nothing. They have referred me to my employer. Can anyone help with this please?