Student Loan interest theft???

bobass

Dear all, I received the email below, and am not sure what to make of it. The is the link to a petition, which shows 2,000 odd signatures, suggesting this is a relatively fresh protest. Government gaining interest with your payments, whilst you still accrue interest on the loan! Is there any truth in this, and would you sign up? See following:

Not much of one for petitions usually but...

For any of you that still have student loans outstanding....please
pass on

For most unsuspecting graduates
who are paying back their student loans, the inland revenue takes
payments directly from your employer in the same way as they take tax.
i.e.
the more you earn the more you pay, this includes bonuses etc. However
after taking monthly amounts the inland revenue does not pay this
directly to the student loan company, instead they wait until

the end of the financial year
in April and then pay the entire year off to student loans.

The effect of this is that
the inland revenue hold on to your monthly payments for up to a year
earning themselves interest, during the same period because student
loans have not received these funds they in turn charge the graduate
interest on the outstanding amount even though it has been paid to the
inland revenue.

Bottom line is that for those
in this position we pay interest to student loans on money which has
been taken from our accounts which the inland revenue keeps and earns
interest on.

Personally I didn't sign up
for this and it makes me
MAD! I have researched this and there are others who have become
aware of this and I plan to join the fight!

As a start I strongly suggest
you sign up to the on line petition below. I am looking into the
legality of what is being done to us as I can see no other description
for this other than THEFT!!!!

Sign up now and join the fight.
Send this to everyone! I will be forwarding dates for the march on
Parliament!

http://petitions.pm.gov.uk/Student-loans/

Bob

exil

The inland revenue doesn't earn any interest. The government has a big overdraft, a few hundred billion - the national debt. It could be argued though that it SAVES interest by hanging on to the money.

Also, as far as I know the interest is charged daily on the outstanding balance, so the petition is wrong anyway - unless someone knows different.

helenrachel_2

exil wrote: »

The inland revenue doesn't earn any interest. The government has a big overdraft, a few hundred billion - the national debt. It could be argued though that it SAVES interest by hanging on to the money.

Also, as far as I know the interest is charged daily on the outstanding balance, so the petition is wrong anyway - unless someone knows different.

I have had a lot of arguments with the SLC over my payments but one thing that they are not doing wrong is what the petition is suggesting.

The petition is right in first part - it does take the IR a LONG time to tell the SLC about the contributions you make but the SLC backdates the payments to the time they are taken and calculates the interest owing.

In actual fact this can work out in our favour as what happens in practise is that the IR tells the SLC the total amount you pay over the tax year and the SLC averages it out across 12 months deducting an equal amount at each month. So if you get a pay rise at some point in the year you will end up being credited as paying back more of your loan earlier than you really did.

One problem with the SLC system is that they have to wait for the IR to send them each individuals files so the information on each statement can take a long time to come through and is therefore very out of date when it arrives. THis can mean that you dont spot problems early.

skinflintsam

Thanks for your post helen. I just got the same email forwarded, so checked it out the student loans website. It seemed to confirm the delay from the HMRC, but nothing about backdating payments, so I starting to worked up thinking about all the interest I was losing.

I was looking forward to having a big rant at someone, which is a slight pity.