Thousands of ex-students over-pay loans

[Michael Browne]

Company responsible for scheme has taken £36.5m more than it was owed from wages

 

The controversial company in charge of collecting student loan repayments for the Government has taken tens of millions of pounds extra from unwitting graduates. Tens of thousands of people have been advised to apply for refunds from the Student Loans Company (SLC) after it emerged that the firm had collected an additional £36.5m from them in 2010-11 alone.

 

More than 63,000 former students carried on repaying from their salary, often for months, after they had paid off loans taken out to fund university education. The average amount overpaid was £577, although several graduates claim they paid out several thousand pounds more than they owed.

 

The total "over-repaid" by graduates is the highest amount ever taken by the SLC, despite assurances that it had made strenuous attempts to ensure it didn't collect more than was due. Graduates overpaid by £22m in 2009-10, compared to £19m in 2008-09 and almost £16m in 2007-08.

 

Student groups last night blamed a lack of communication between the SLC and HM Revenue & Customs (HMRC) for the millions disappearing from graduates' incomes.

 

http://www.independent.co.uk/news/education/education-news/thousands-of-exstudents-overpay-loans-8007767.html

[BankFodder]

Well the answer is to claim against the direct debit guarantee - which will involve the banks savings make them angry, - and also to sue for interest at the contractual rate

[marmaris30]

I'm afraid it's nothing to do with direct debits, because borrowers are required to repay via the tax system (automatic deductions from your salary) UNTIL they are likely to repay within two years and are (a) invited to pay the rest by DD or (b) ask to do so, OR © they repay everything via the tax system up to the end of the tax year when HMRC tells SLC how much they collected. In this last situation, you are likely to overpay because of the time lag.

 

Overpayments are repaid on application. However, the diligent can avoid the problem by ensuring SLC have their latest address, and by periodically monitoring the statements as they would any other, to see how things are going, and asking to finish off on DD payments once the two year criterion arrives.

 

Clearly if DDs are still taken when the loan is finally repaid, then you would have recourse to your bank.

 

The bad publicity they had a couple of years ago was more to do with being incapable of paying out loans on time to new students, not the administration of repayers.