Image : Dartmouth College / Flickr

More than £18m in loan overpayments held by Student Loans Company

More than £18 million in student loan overpayments have been held by the Student Loans Company (SLC) over the last five years.

According to figures obtained through freedom of information requests, just under 60,000 graduates in England overpaid on their student loans since 2015-16 and are owed refunds.

This total includes £2 million in overpayments made in 2019-20 – despite the SLC introducing a new online repayment service to make it easier for customers to manage their student loans and avoid paying too much.

The figure is less than the £21 million in overpayments revealed in figures published two years ago, suggesting that the SLC is unable to locate and refund students to whom it owes an average of £300.

Income-contingent student loans are repaid by salaried graduates through the payroll tax system administered by HMRC. The bulk of overpayments arose because HMRC and the SLC exchanged data only once a year, but recently the organisations have shared data once a week to reduce the chances of overpayments.

In a statement to Research Professional News, an SLC spokesperson said: “Over the past two years, SLC has introduced a new online repayment service to make it easier for customers to manage their student loan and to help avoid over-repayment.”

Last year we automatically refunded £3.5 million

– SLC spokesperson

“These improvements have resulted in a 38% drop in the amount over-repaid since 2018.”

“Customers can avoid over-repayment by opting to pay their student loan by direct debit during the last two years of repayment.”

“We contact every customer two years prior to the end of their loan and urge them to switch their repayments to direct debit during this period.”

“In addition, we now automatically refund customers and last year we automatically refunded £3.5 million, but we can only do so if we hold up-to-date contact information.”

Rachel Hewitt, director of policy and advocacy at the Higher Education Policy Institute, told PA Media that the responsibility should not fall on graduates to avoid overpayment.

“It is unethical for the loan recipients to have to take the responsibility for ensuring they are not overpaying, and shows flaws in the system that there is still such a significant number of graduates overpaying. It is essential that this is addressed, to avoid further distrust in the loans system.”

Related Posts

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *