The controversial organisation behind the UK’s student finance process is facing a barrage of criticism once again, after it was revealed that the Student Loans Company had overcharged 63,000 ex-students in their repayment process.
Those affected are said to have been overcharged by £577 – even after fully clearing their student loans – resulting in the Student Loans Company (SLC) receiving an estimated additional £36.5m in 2010-2011 alone. Tens of thousands of graduates have been advised to apply for refunds in a bid to rectify the error.
The Student Loans Company collecting more money than it’s meant to isn’t a new phenomenon. Additional collections totalled at £16m in 2007-08, £19m in 2008-09 and £22m in 2009-10. The SLC had made assurances that strenuous work had been put in to ensure these mistakes don’t continue but a £14m rise in incorrect, additional payments puts some doubt in those claims.
Pete Mercer, vice-president of the National Union of Students (NUS), said: “The huge overpayments we’re seeing annually on student loans demonstrate that a switch to real-time communication between the Student Loans Company and HMRC cannot come soon enough.”
The SLC argue that the problem is caused because HMRC only communicates financial figures for each graduate a few weeks after the tax year ends in April. This delay means that graduates who have fully repaid their loan during the year may not have their direct payments stopped until SLC receive confirmation from HMRC on how much has been paid.
It appears that both the Student Loans Company and the tax office know that the problem is.
So, why can’t they solve it?