Student Loan - Loans and Debt Consolidation

STUDENT LOAN COMPANY FORCED TO REIMBURSE OVERCHARGED GRADUATES VARSITY ONLINE

Student Loan Company forced to reimburse overcharged graduates

An increasing number of graduates are being overcharged on their student loan repayment, a BBC investigation revealed

by Henry Marshall

Monday 10th October 2011, 11:58 BST

The Student Loans Company is having to reimburse an increasing amount of money to graduates who have been overcharged on their loan, a BBC investigation has revealed.

The company has refunded more than 107m over the last 13 years. The average repayment to graduates who were overcharged in the year 2009/10 was 557, with one graduate receiving 96,000.

Loan repayments are made through the tax system. However, the Student Loans Company only receives information about how much an individual has repaid when employers submit annual tax returns at the end of the year. This means that graduates who pay off their loan during the tax year end up being overcharged.

The Student Loans Company was keen to emphasise that all money was repaid with interest and that changes in the system introduced in 2009 allow graduates approaching the end of their loan repayments to switch to direct debit. This pre-emptive action gives graduates more control over their repayments, but is yet to cause a decrease in either the amount of money, or number of people overpaying. Currently, of the 106,000 students who have been offered the direct debit scheme, only 32,000 are using it.