MSE News: Student Loans Company overcharges by £15 million

Options
This is the discussion thread for the following MSE News Story:

"Tens of thousands of graduates have been urged to claim money back after it emerged many have inadvertently overpaid ..."

Comments

  • foofi22
    foofi22 Posts: 2,199 Forumite
    First Anniversary First Post
    Options
    Isn't this old news? But good luck to those getting refunds, I'm still waiting for HMRC to tell SLC how much I paid for the 09/10 tax year!
  • The_One_Who
    The_One_Who Posts: 2,418 Forumite
    First Post First Anniversary Combo Breaker
    Options
    Old, old news. It is the way the system works, unfortunately. Plus, graduates should have a handle on their finances and know how much they are paying and how much they are left to pay, even if the SLC are a bit hit-or-miss with their statements.
  • DJ_Mike
    DJ_Mike Posts: 247 Forumite
    First Post First Anniversary Combo Breaker
    Options
    I think calling the SLC "bungling" is rather unfair. The finger should be pointed squarely at the gigantic fail-ocracy that is HMRC. They're the ones who insist on sitting in the middle of PAYE loan repayments and only ever tell the SLC about your repayments after the end of the tax year, taking several months in the process! This means, for example, that a repayment you'd paid from your salary in April can take up to 15 months to even be applied!

    Have student loan repayments go straight from employer to SLC and you'd totally eliminate this problem. At least the SLC is trying to combat this grossly inefficient problem by trying to pre-empt the end of your loan by 2 years. But nothing they can do can make up for the total ineptitude of HMRC.

    I had the foresight to talk to SLC directly when I realised my loan was close to completion, so I avoided the overpayment problem, but I had to be very astute about this. Even then, HMRC failed to process the request to stop taking loan repayments from my salary, and it was only when SLC contacted my employer directly that the repayments were stopped. I'm sure most ex-students are blissfully unaware of how badly bureaucratic this system is!
  • Mikeyorks
    Mikeyorks Posts: 10,369 Forumite
    First Anniversary Combo Breaker
    Options
    DJ_Mike wrote: »
    I think calling the SLC "bungling" is rather unfair. The finger should be pointed squarely at the gigantic fail-ocracy that is HMRC. They're the ones who insist on sitting in the middle of PAYE loan repayments and only ever tell the SLC about your repayments after the end of the tax year, taking several months in the process!

    A few facts ..... as you seem a bit short on them. HMRC pay student loans to SLC every month. But it's a lump sum ..... and based on an algorithm, so the payments can't be attributed to individuals. That's because employers pay PAYE / NIC / SLC over to HMRC the same way .... simply as a lump sum and with the SLC aggregated into the PAYE (hence the algorithm to seperate it out). To do otherwise would be a requirement on employers / payroll - that they wouldn't tolerate. Payments only get credited to individual's accounts (PAYE / NI and SLC) after the year end when employers submit a P14 to HMRC showing individual deductions.
    When SLC (re)payments were introduced all practical options were considered. Direct and attributable payments by the employer didn't even make the long list, let alone the short list.

    The DD system, in the final year, was only introduced because of pressure on SLC by Govt to cut down on the inevitability of overpayments at the end of a loan. The article may have been better concentrating on that ..... as all Students should pick up the option otherwise they will overpay.
    If you want to test the depth of the water .........don't use both feet !
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 343.7K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.8K Work, Benefits & Business
  • 608.8K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards