Student Loans company taking payments when they are not due

£15m in overpayments were taken by the student loans company

Yesterday it was revealed that the Student Loans Company (SLC) is taking more than £15 million from graduates who had paid their loan back already. Which? A consumer watchdog, unearthed the figures after receiving complaints from people who noticed money was still being taken from their pay packets. They found that more than 57,000 former students were waiting for a refund for the year to march 2010.

Under the loan system graduates pay back the loan in monthly instalments, HM revenue and customs takes the money and passes it on to the SLC until the student loans company informs them it has be fully repaid. Graduates stated that although the repayments have been made, they face hassle as a result of the situation.

In response to this the SLC “if a borrower has overpaid, the money is paid back when the details come to us. Borrowers suffer no financial disadvantage as a consequence”.

Principles advocate Mark McLaren of Which? Said: “We disagree. Unwarranted payments could cause significant short-term hardship, as well as considerable hassle in getting HMRC and the SLC to communicate effectively with each other.”

The House of Commons Public Accounts Committee (PAC) described the performance of the SLC as “completely unacceptable” in its first year and said improvement since then had been “disappointing”.

by http://www.pareto.co.uk