Student loan interest payments from PAYE

cepdimmock

Dear All,

I know MSE has recently taken an interest in student loans and I have just received my annual statement which would appear to confirm that monthly amounts of interest have been deducted via PAYE. However, the amounts I have paid monthly are not reconciled with the Student Loans Company (SLC) until the end of the tax year. I am therefore being charged monthly interest on sums that have already been paid via PAYE and believe that the amount of interest being calculated and deducted is incorrect. Due to the annual reconciliation of payments, interest is continuing to be accrued on amounts already paid between the time it has been taken from my earnings and the time it has taken PAYE to pay the SLC.

With two different loan amounts, and some interest rates being above 5% at times, I may well be paying a lot more than needed in interest and would like to know what I can do to ensure I am not paying too much/interest is being deducted in the same way my payments are collected.

I look forward to hearing from others as to what to do with this situation.

Many thanks,

Catherine

Ed-1

cepdimmock wrote: »

Dear All,

I know MSE has recently taken an interest in student loans and I have just received my annual statement which would appear to confirm that monthly amounts of interest have been deducted via PAYE. However, the amounts I have paid monthly are not reconciled with the Student Loans Company (SLC) until the end of the tax year. I am therefore being charged monthly interest on sums that have already been paid via PAYE and believe that the amount of interest being calculated and deducted is incorrect. Due to the annual reconciliation of payments, interest is continuing to be accrued on amounts already paid between the time it has been taken from my earnings and the time it has taken PAYE to pay the SLC.

With two different loan amounts, and some interest rates being above 5% at times, I may well be paying a lot more than needed in interest and would like to know what I can do to ensure I am not paying too much/interest is being deducted in the same way my payments are collected.

I look forward to hearing from others as to what to do with this situation.

Many thanks,

Catherine

Prior to 6th April 2019, interest is not applied to your loan balance until SLC know how much you repaid during the tax year. Interest is then calculated as if repayments had been received in 12 equal monthly amounts on the last day of each calendar month.

From 6th April 2019 onwards, SLC receive repayments on a weekly basis and interest is applied in real time.

cepdimmock

Thanks for the quick response.

That all makes sense but it is a shame that it has taken PAYE and SLC so long to do this. I guess I will be waiting nearly 18 months for another statement to see how this affects my payments.

All the best,

Catherine

Ed-1

cepdimmock wrote: »

Thanks for the quick response.

That all makes sense but it is a shame that it has taken PAYE and SLC so long to do this. I guess I will be waiting nearly 18 months for another statement to see how this affects my payments.

All the best,

Catherine

Online accounts should be updated in real time towards the end of this year. The important thing is you have never been charged interest on money you have already repaid.