MoneyMagpie

Dec 16

Student Loans Company rip-off? Surely not?

It’s not been a good week to be a student. Apart from the successful vote to raise tuition fees to a maximum of £9,000 a year, and the actions of a minority of the professionally aggrieved tarring all students as incoherent, violent idiots, it now appears that a bunch of ex-students have overpaid their loans to the tune of £15 million.

Consumer champion Which? has done some digging and it appears that some 57,000 ex-students have been making payments to the Student Loans Company up to 11 months after their debt was paid in full. For graduates repaying their student loans through the Pay As You Earn (PAYE) system the Student Loans Company is meant to inform HM Revenue and Customs once the loan is paid off, but in a brilliant exercise in administrative error some unlucky students “slipped through the net”  – and kept on paying. It’s not the first time it’s happened either, with students overpaying by £9 million in 2009.

What’s even worse is that anyone claiming back their excess payments has to run a bureaucratic gauntlet. Which? say that one ex-student had to wait over six months for his excess repayments to be refunded, and even then his refund was two months short. By my calculations, these graduates are claiming back an average of £263 each, which is money worth having. If you knew you were entitled to an extra £263 you’d take it – I know I would!

Sadly Which? can only offer cold comfort for out of pocket graduates: check your statements, keep an eye on your payments and if you think you’ve overpaid get straight on the phone to complain! If you’re close to paying off your student loan it’s also worth giving the Student Loans Company a call to discuss your final payments to make sure you aren’t charged more than necessary.

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