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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?

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!

John says:
21 October 2011

Hi Mark

I never received notification that I had only £2000 left on my account, although I believe this is suppose to happen. I only know I had that left because I worked it out. As you can see in my response to your other comment, I changed from PAYE to direct debit before paying off my account. I then closed the direct debit after paying off my balance. This way I was sure they wouldn’t take more than they were suppose to through the PAYE system. In other words, I don’t trust them to get it right. I find it simpler to treat companies like this as there are less problems later.
My previous posts were intended to point out that the SLC has a really hard job of working out when you are due to finish paying off your loan. This is a fault of the system which was setup for SLC to use and blaming the SLC is kind of missing the point. As I said before, and you agreed, monthly updates from the inland revenue / employer would solve a lot of problems. Surely this is simple in today’s connected society with instant banking etc…
Which? will you please take this up and lobby for monthly updates of repayments to the SLC, this would solve a lot of the problems seen by many students when repaying their student loans. Just telling us its a broken system is pointless, its much better and more constructive to actually suggest an alternative….

Aside from the immediate budgetary problems these mistakes cause to students, the general disorganisation and unreliable track record of SLC does not set students up well for the future. Much research into the measure of individual financial capability shows that experience with financial products is the best form of financial education people can have.

And as student loans are a credit product used by the majority of higher education students in the UK (for many of these young people it is their first experience of gaining financial independence) it’s really important that the loans are clearly administered so that graduates can comprehensively pay back the money they have borrowed in a manner where they feel well informed and in control of their (ever-growing!) debt levels.

The charity Credit Action did some research a couple of years ago to flag concerns that student loans don’t even meet the consumer criteria required by a commercial loan. And the result is that many graduates do not know how much they owe, what interest rate they are paying or when they will clear their outstanding balance. It is not a great first taste of the already intimidating world of financial services…

Here’s what Credit Action found: http://www.creditaction.org.uk/policy-research/research/credit-action-and-student-loan-repayment.html

John says:
18 August 2011

I understand your point, but your comparing apples and oranges.
I know that bank and student loans are both loans, but are administered completely differently. For a bank loan the bank is in complete control of collecting your repayments, be it on a monthly or annual basis. Therefore, calculating how much you owe at any particular point is really simple – its in their system.
Student loans are repaid through PAYE to make the administration of repayments easier on their part. This means they are reliant on both your employer and the HMRC to find out the details of your repayments and therefore are constantly receiving out of date information. As someone who has just paid off their loan it was relatively simple for me to look at my statements, see when I was due to finish repayments and contact the SLC regarding changing from PAYE to direct debit. You have to admit that a lot of the blame for overpayments has to rest with the graduates themselves. If you can’t read a student loan statement and then add up the payments on your payslips to calculate you estimated balance it really doesn’t say a lot for your education. If fact, if you logon to the student loan website there is a little tool for you to calculate your actual balance where you enter details of repayments which they do not have.

If you can think of a better method of collecting student loan repayments then lets hear it, this is what Which? should be doing. The SLC would have to be able to track people for 10-15 years while they make repayments. In that time people will move and change banks. Repayments can’t be direct debit based as you have the power to cancel direct debits – and lets be honest who wouldn’t be tempted.
I think the current system is flawed, but you seem to be missing the point as to why. The only thing I can see working better than the current system would be if the PAYE scheme, via your employer, was capable of informing the SLC of your repayments on a monthly basis. I don’t understand why this would be that complicated – and this is what you should be campaigning for. It would solve all of the current problems and not introduce new ones of tracking down people who have cancelled their direct debit repayments.

Graduates do not know the interest rate they are paying? Really? Typing “student loan interest rate” into google and the first link is http://www.slc.co.uk/statistics/facts%20and%20%20figures/index.html
I find that a lot easier than looking up loan rates for banks.

On a more personal note, I find that most graduates I know are pretty relaxed about repaying their student loans and seem happy with the annual statements telling them they are slowly repaying their debt. Its a bit like a mortgage in that its such a huge number that you feel like it’ll never go down and then your surprised when it has actually decreased. Regarding repayments, as its done through PAYE you have no control over it, therefore don’t have to worry that you might not have enough to make the repayment that month. That is one big benefit of the current system of paying through PAYE.

Mark says:
20 October 2011

I paid off my Student Loan last month, and even did it in advance by calling them directly and paying the remaining balance (to the tune of £500 I might add).

This month the payroll at my company have informed me that the student loans company has requested 2 separate payments of over £350 to be taken from this months salary. So thats over £700 SLC has taken from me, that I simply do not owe them.

Simply put, this is an utter disgrace. They do not know my circumstances, I could have a number of young children, credit card debit and other bills to pay for, let alone the mobile bills and overdrafts you mention in this article.

Worst case scenario I could have missed mortgage repayments/rental payments, be evicted from my property and find myself living on the streets (or in my car), have lost my job due to my personal circumstances and find myself on the dole taking back my hard earn taxes – all because of an SLC f**k up. OK I may be exaggerating, but thats not really the point.

Fortunately I am not in that situation, but I now find myself £700+ worse off this month, and having to put in all the work to get my refund while the SLC sit on their ass, shrugging their shoulders.

These jokers need sorting asap.

John says:
21 October 2011

I sympathise with you.
When I phoned to close my student loan account I was told that they would take money through PAYE for the next 2 months and so any balance I had to pay was minus this amount. Did this not happen to you?
I then waited for the PAYE payments to finish and no longer appear on my pay slip before paying the final amount.

L Collins says:
21 January 2012

I am currently paying o f a £12,000 student loan since I graduated in 2003. I have repaid more than £8000 in payments and yet my balance is only showing aroun 9,500!! How can this be – I am in the process of having this investigated but I dont think they have a lcue about what they are doing at all. Its increadibly frustrating. Also, 2 years ago I had a £5K pay rise and my payments increased by £5 a month. I justh ad another £5K increase and the payments have gone up by £70 – no consistency!

John says:
21 January 2012

log on to their website and you can check your balance by putting in your payments through PAYE. This will allow you to use all your information to have your balance calculated.
Also, bear in mind that your statements are at least a year out of date, due the way that the SLC gets its information from your employer and the HMRC. So the balance on your last statement will be wrong.
The difference between your payments and balance is most likely down to interest. Interest accrues from the day you get your first loan, not when you graduate, so will have started in 2000? that’s 11 years of interest! Even at a low rate it really adds up!
The step up in your payments is due to the threshold used to calculate your repayments. You pay 9% of your salary over £15,000. So if you earn £20,000 its only 9% of £5000. An increase to £25,000 makes it 9% of £10,000.
Actually the SLC website is very good at explaining all of this
Hope this helps.


Graham says:
21 June 2012

I’m in a similar position. I’m due to pay my loan back in full by November 2012 and have already contact the SLC for information on how to close my account – they are ignoring me.

That means that it will be July before the HMRC and SLC reconcile my account by which I would have overpaid around £1,100 – money which I would much rather be saving or trying to earn interest on myself! Is there anyway of forcing the SLC to issue an SL2 stop notice?

This practice is completely unjust and it seems as though the SLC and HMRC are in cahoots over this!

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Jez Scott says:
23 March 2013

Having discussed similar horror stories with my friend I looked into my records more closely, I have not had a statement for 3 years but found the letter regarding the online Repayment Portal from 2009 (coincidently the same time the statements stopped) and so logged in to find that I am due to be paid up by next month at which time I will have an overpayment of some £300 and will indeed contact the SLC on Monday to discuss the situation.

I found the website easy to use but find it difficult to comprehend why I have not had a statement for 3 years and if it had not been for a brief chat with my friend this week I would not have looked into the matter, nor have the SLC been in touch to inform me that I am close to paying off my student loan.

Hopefully I will be able to stop my PAYE payments and will be able to respond more positively about the SLC despite their lack of correspondence and the £300 will be repaid with due haste.

Notwithstanding this I am also concerned that I have apparently “an extra account” logged against my name with no further details so I sincerely hope they have not attributed one of my 3 brothers accounts against my name having the same initials, although pure conjecture.

I will revert once I have spoken to the SLC on Monday.

Clairebear says:
2 April 2013

I have been following the progress of my student loan for the last 5 years and have made significant overpayments in an attempt to get rid of it by 2016. I pay by debit card on a monthly basis as i am overseas.

I did not recieve a statement in May 2012 so recently logged in to the new online portal to check my account balance. To my surprise, i owe £730 more than i thought. When i contacted the help centre, i was told there was an error on my last annual statement which did not refelct the interest charges of £127 for the 2011/2012 financial year, and i was sent a detailed statement covering the life of the loan since i graduated. This statement shows a higher balance at the magic “April” goalpost each year of the loan, despite the annual statements detailing otherwise. Their claim that the charges applied to my last financial year of payments was completely false given that this only accounted for £127 of the difference. It seems to me they missed charging interest for part of the loan, and have retrospectively put £732 of charges on. I cannot think of any other reason why i would have a history of annual statements that do not correlate to my current balance and why i have had a sudden jump all of a sudden without warning. Can they do this? I’m actually quite furious about it, as prior to the inclusion of the balance calculator on the website we relied entirely on the annual statements as a means to determining our balance. Now i’m £732 more in debt…. and their explanation doesn’t even tie up. They denied knowledge of the annual balances i refer to, to the extreme i had to send them copies! Such a mess……… :-/

Jill says:
1 May 2013

SLC are still messing this up, with or without the Direct Debit method.

In Jan 2013 I phoned SLC to let them know I was about 5 months away from repaying the loan in full. They started a DD for me and claimed to have sent a request to HMRC to send a Stop Notice to my employer so that my salary deductions would cease. All correspondence advised me to sit tight and wait for the salary deductions to stop (which could take up to 3 months). In March, the deductions continued and checking with my employer revealed that no Stop Notice had been sent.

SLC of course deny any responsibility for this, as they sent a request to HMRC in January. I was told that because SLC can only only send a request to HMRC (and have no involvement or responsibility from then on) neither SLC nor HMRC could possibly be aware that a Stop Notice never made it to my employer despite being requested!

After a number of phone calls to SLC (being subjected to their awful hold music each time), and more attempts to request an expedited Stop Notice from HMRC, my employer has still received nothing. In the meantime, my salary deductions have continued AND the Direct Debit started in April, so I have now overpaid my loan. Presumably further deductions from my salary will continue until I can get a request for a Stop Notice to actually stick.

All this despite the fact I gave SLC five months notice that I was close to repaying my loan. In fact, due to the Direct Debit, I have now overpaid faster than I would have had I not contacted them in the first place. Ridiculous.

Barbs says:
26 June 2014

This week I have tried to finally settle my student loan. After endless phone calls, they admitted that they couldn’t give me a settlement figure, for 4 months……but will continue to charge me interest! What a joke! Where else would this happen!

I have completely lost patience with SLC and their lack of urgency I find lacks any level of respect.

After not really checking my SLC account for a good few years and moving house a few times I did not have any current statements from SLC to check how much I still owed them (it seemed like I had been paying them for years). I ended up setting up the online account and o my surprise I found out I had overpaid by approx £700. So I went through the process of reclaiming the overpayment and stopping the payments. Now at this stage I was not to bothered as I had jst found out I’d be getting a nice cheque for £700 in my back pocket. However it took 3 months and 4 stop notices for them to finally refund my overpayment and stop taking evan more money from my pay. The fact that they have to do everything by post I found really difficult to understand, this is the 21st century after all. I did get them to prioritise my case once and they did this by allowing me to fax them rather than post info into them!! So by July 2013 I had finally had my refund and payments had stopped from my pay. In April 2014 they started taking payments once again, bearing in mind I owe them nothing I find this completely wrong and wonder if they are even allowed to do it? We are now in September and I am still waiting for my second refund for my second over payment. I’ve tried not to lose my cool with SLC but am at the point now where I find it completely and utterly insulting. The fact that a simple stop notice cannot be applied is crazy!

Does anyone know of anyone who have successfully charged SLC interest? Or reported them to a governing body before? Would also be interested to hear anyone who’s had a similar situation to me?

Victoria Thompson says:
29 September 2014

I am having the same problem.

I paid my loan off over 3 years ago. SLC have started taking money out of my account again. I have made a complaint and demanded the immediate repayment of the overpaid amount along with a letter from the SLC stating that my loan has been repaid in full. I have also requested that a stop notice is issued immediately. I have had a lot of very frustrating telephone conversations and been placed on hold more times that I can remember!

The SLC say that I still owe them approx. money despite the fact that when they went through the calculations with me it’s clear the total is more than I borrowed even taking into account the interest!!

I requested to speak to a manager twice and was told that a manager was not available and someone would call me back – I am still waiting for a call

I’m not sure what else I can do – any help/guidance much appreciated….

owed over £900.
Got the letter stating I’ve nearly finished paying.
When I rang to set up DD they informed me that with my additional payments (post April) that they now actually owe me money.

They then continued to take payments from me for a further 2 months (will find out next week if that becomes 3).
I have sent them p60’s, payslips and anything else asked for. They told me the money would be back in my bank within 10 days. 20 days later, I call back up and am told they are waiting on HMRC records.

Complete and utter joke of an organisation that has left me irate!!!!

Diane says:
6 November 2014

Still paying three years later
My husbands student loan should have been paid off over three years ago, the SLC continues to take monthly payments directly from his salary. They have been informed by telephone and letter on numerous occasions over the last few years but just say that they cannot stop the deductions, his employer says the same. Three tax years will have past and still the deductions do not stop. The SLC refunds the payment when he sends in his pay slips but we would really like to know what to do to stop this.

Geri says:
24 March 2015

I repaid my student loan 7 years ago. I kept meticulous accounts and filed everything, including the letter from the student loans company saying the balance was zero, and kept them for 6 years. This is the HMRC requirement period for the keeping of financial records. After the 6 years, growing short of space and hearing nothing further from SLC, I shredded everything.

Last month I received a demand from SLC saying I had not actually paid off the loan and they want more money, plus the 7 years of interest they have now applied to this imaginary debt.

Any suggestions anyone?

Lucy says:
10 August 2015

Can you not supply details of your P60’s to confirm you have paid off your loan in full.

William Frank says:
26 April 2015

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Rebecca says:
24 July 2015

I paid off my first student loan in full in 2006, only to receive annual demands for the money ever since. When I started a new course the SLC didn’t pay the initial fees as the system was still snarled up with this payment. It was easily recognised by their customer service as an error every single time I phoned, but the operatives, management and legal services dept told me there was nothing they could do to remove the false information from the system, so I should just ignore the demand letters. Did this for several years, only to find that they sold this debt to Erudio at the end of last year. I asked SLC to sort this out only to be told that I should phone Erudio to tell them that I didn’t really owe them any money! Bunch of incompetent idiots. Wish I had back the hours I have spent on the phone dealing with their inability to keep accurate records.