SLC Postgraduate Loan 2016-17 Interest Charges

junglemonster

In 2016 I received a Postgraduate Loan from the Student Loans Company (SLC) for a 1 year full-time MSc for the academic year 2016/17. This was the first year that such a loan was made available. I graduated in December 2017 and was in full-time employment earning above the minimum repayment threshold in April 2018.

Section 5 Repayment, of the loans terms and conditions, states "You'll be due to start repaying your loan in the April after you complete or leave your course, if you're studying full time... However, no Postgraduate Loan repayments will be taken before April 2019".

According to the terms and conditions of the loan, I was eligible to begin repayments in 2018 but the SLC chose not to begin collecting these for a further year. During this time, I have accrued approximately £600 of additional interest.

The Postgraduate Loan terms and conditions for following years do not have the "we're waiting a year to start claiming repayments" clause.

I've written to the SLC and asked for this interest to be refunded and they have refused, citing the terms and conditions referenced above.

I rather get the impression that the SLC were not in a position to start reclaiming the loan after the first year that it was introduced and that I am being financially penalised as a consequence (along with however many other people took the loan in this year). I accept that I agreed to this condition, although I had not put two and two together and registered that I would incur interest during this period; I probably would have taken the loan even if I had realised this.

Do I have any grounds to continue to pursue the SLC for the interest charged during the year that they chose not to collect repayments, or do I have to chalk this one up to "nobody ever said life was fair"?

DrEskimo

I believe you are charged interest from the first day you get the loan, so it's not as if the interest only started accruing after you graduated.

Additionally, even if you were paying it back over that year, you would have also been charged interest, however this would have been slightly less as you would have been paying down the balance slightly each month.

So, even if you were due a refund, it wouldn't be the full amount you quote. You would have to work out the difference between the interest accrued based on a decreasing balance during that year (as though you were making payments), relative to the interest on the balance remaining static through the year (with no payments being made).

Basically I don't think you are out of pocket by as much as you think you are, unless your £600 figure takes the above into account?

junglemonster

Thanks for your thoughts. You are entirely correct that interest started from the day the loan was paid and that my calculation may be off a little. However, my gripe is that there was an arbitrary year where I was charged interest without being able to pay it down because the SLC decided they were not going to collect - something they have not done (AKAIK) for any other year of the Postgraduate Loan. Unfortunately, the loan's T&C did state this, although I didn't appreciate the implications at the time.

In my opinion, this is entirely unjust and unethical. However, I also believe that in and of itself, giving the SLC this as a reason is not sufficient grounds for a refund. I'm specifically interested to know whether I have any legal grounds to continue pursuing this?