The SLC (Student Loan Company), set up to manage allocations and payments of loans of all students in the UK, has been forced to repay millions in overpayments, according to one recent report. The information came to light in view of a FOI request. Most shockingly, SLC had had to repay £53m in the last academic year alone, compounding an already difficult financial situation for many graduates.
Why Has This Happened?
The problem, it seems, is that the SLC bases its annual calculation on information that HMRC provides. This means that should a student lose a job in the course of a year or move into part time work or other lower paid work, they are expected to repay their loan at a higher rate until HMRC updates the information. This has been problematic especially for students leaving full time work to study a part time postgraduate degree and working part time to support it.
That is not the only issue, several processing errors have been identified in that students who have already paid of their loans continue to have payments deducted from their salaries.
MP Complains about Struggles to Get Through
Wes Streeting is presently a Labour MP for Ilford North. He is also a former NUS President. Streeting is one of those affected by the SLC errors. He said he spent too many phone calls in the last six months up to the report trying to get his money back.
There is a further issue likely to cause problems in that the government refused to increase the threshold at repaying student loans for present students. Despite the average graduate student salary dropping since 2012, the threshold has remained at its 2012 level. The Independent calculated that the average 2016/17 graduate (i.e. those graduating this year) will pay over £300 more than students graduating in 2011/12.
What To Do If You Have Overpaid
It was also recently noted that British graduates carry more debt than equivalent students anywhere else in the world: around £45,000 worth of debt – far higher than anywhere else. Therefore, it is vital that SLC correct this, especially for the lowest earning students.
It is imperative that you get in touch with the Student Loans Company as soon as you notice a discrepancy. They have a helpline and the number is: 0300 100 0611. The process could take a while as they will need to perform a number of checks, particularly with HMRC. To speed it up, they may recommend that you send copies of your most recent payslips. This is suitable for those whose wages have suddenly dropped (you’ve your job or moved into part time work for any reason). The final piece of advice is to be persistent. You are not the only student to experience this problem and it could mean repeated phone calls.