After Septembers debacle of unpaid student loans, the Student Loans Company (SLC) has been trying to keep it’s head down, but according to the consumer watchdog, Which?, ex-students have been overcharged an average of £263.
Which? says that £15 million was overpaid in the year to March 2010, a huge increase compared to last year’s figure of £9 million.
“The whole process seems overly complex, with students being the ones losing out and sometimes encountering bad credit debt.”
The SLC receives monthly payments through the Pay As You Earn (PAYE) tax system until the loan is repaid, at which point it notifies HM Revenue & Customs (HMRC).
However, 57,000 ex-students continued to have money withdrawn from their wages after the loan had been repaid, some for up to 11 months.
Which? also found the reimbursement process to be complicated if a mistake was discovered, with some ex-students waiting up to six months to have their circumstances resolved.
“The report by Which? comes after mass demonstrations in the capital over rising University fees,” confirmed Mr James of Bad Credit Loans 4 You.
“With the current system in place, thousands of current and future students will end up overpaying on their student loans at a time when they might need that money the most.”
Student loans are not governed by the same regulations as credit cards and personal loans and are not obliged to provide regular statements to borrowers.
The SLC instead issues annual statements, but these are often already out of date by the time they arrive.
Because the tax office only tells the SLC how much employers have deducted from pay packets at the end of each tax year, the SLC cannot give regular updates to graduates of how much they still owe.
This is the main reason for overpayments, as those who have almost paid off their loan at the beginning of the tax year could end up overpaying for the next 11 months.
The SLC has introduced a scheme whereby graduates can opt to repay the last two years of their student loan by direct debit.
A statement on the SLC website read; “Last year we introduced a Direct Debit scheme to prevent over repayment, for anyone who is in the last two years of repaying their loans.
“We have contacted over 68,000 customers who we identified as being eligible for the scheme.”
“Our advice to student loans customers; Keep track of your balance and repayments by logging on to the student loan repayment website.’’
Peter Vicary-Smith, Which?'s chief executive, said; “The SLC must ensure they don’t keep ex-students 'in debt’ for longer than they need to be.”
“Paying off debt is a stressful experience, so the last thing people need to find is that they’ve been paying out more than they needed to.”
In response to the Which? article, the SLC said; “If a borrower has overpaid, the money is paid back when the details come to us.”
“Borrowers suffer no financial disadvantage as a consequence.”
Bad Credit Loans 4 You helps out people who fear they have been blacklisted because of past poor credit history which could include CCJ’s and defaults, arrears, late credit card payments or repossession.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading.
Bad Credit Loans 4 You is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
For help, phone 0800 011 4503 or visit
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Loans 4 You of London Ltd
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Tel: 0800 011 4503
Bad Credit Loans 4 You was formed in order to ensure people with bad credit had access to specialist help in securing the bad credit loans they need.
From its UK head office in Monks Brook, Loans 4 You operates across Britain, sourcing bad credit loans for people with bad credit.
Bad Credit Loans 4 You holds a Consumer Credit Licence issued by the Office of Fair Trading.
Bad Credit Loans 4 You is also covered by the Financial Ombudsman.
Bad Credit Loans 4 You is also registered with the Information Commissioner’s Office for Data Protection.
