Over the past five years’ hundreds of thousands of students have been wrongly charged by the Student Loans company.
It is estimated that over 300,000 graduates are eligible for refunds after they were over charged by the company, which is government owned.
Many students, as well as universities themselves, are questioning how overcharging on such a scale can happen – and indeed happen to so many people. Three hundred thousand affected people isn’t an isolated number – it is a large problem.
The problem is said to be occurring because student loan repayments are determined using HM Revenue and Customs and this is only done once a year. So, for example, payments are sometimes taken by the loans company for balances that have already been cleared. And in some cases, if a graduate has a pay cut which then pushes them below the minimum salary threshold, or they lose their job entirely, they will continue to be overcharged because no-one knows until the next tax year. There is no continuing update – if your circumstances change from that at the beginning of the financial year, it is irrelevant, you will continue to pay at the rate that you started on at the start of the year.
As it stands the loan company has had to shelve out over £220 million since 2011-12 and this is expected to continue to rise as figures show that this year alone, thousands of students have had money returned to them – and even worse – some students that are eligible still haven’t received monies.
The revelations have highlighted that something needs to change with regards how things are operating at the moment and the National Union of Students have thrown their weight behind potential alterations.
Explaining how the repayments work a spokesperson for the loans company clarified: “If we find out that a borrower has overpaid, we will get in touch with them using the latest contact information they have on their account. This will allow us to provide a refund promptly.”
They added that there were lots of ways to keep a check on repayments.