United Kingdom (UK) graduates’ student loan overcharges are being held by the UK government to the tune of at least twenty-eight million pounds (£28M). This is despite the said amounts being identified.
According to the Students Loans Company (SLC) statistics, in England, at least five hundred thousand (500,000) former students had overpaid the stipulated student loans by almost six hundred pounds (£600).
Low reimbursement of student loan overcharges
Figures availed illustrate a raise in overpayments in the student loan sector.
For instance, three hundred and eight million pounds (£308M) was overcharged between the 2009-10 and 2017-18 period. Nevertheless, only a tenth of this amount has been refunded.
The Department for Business Innovation and Skills is mandated with making student loans repayments. Notably, most impoverished learners borrow an average of at least fifty thousand pounds (£50,000). Consequently, this amount is increased by over six percent (6.3%) charged.
An SLC spokesman stated that the company had contacted every person who had an overpayment so that refunds could be arranged.
He also asserted that all graduates whose loans had been taken out were urged to update their contact information.
The spokesman revealed that SLC intends to ensure all clients repay the precise amount so that overpayments could be eradicated.
Student loan repayment system’s lags
SLC has acknowledged that it only attained repayment data at the tax year’s conclusion commencing in April. Lags in the repayment structure caused an acknowledgment that the loan has been paid off, whereas this was not the scenario.
For example, even if the loan was paid off, in November, a graduate’s salary could continue being deducted throughout that tax year because of automatic payments.
The most substantial yearly amount to not be refunded was recorded in the 2015-16 period as over six million and three-tenths pounds (£6.3M) overpayments were ascertained. The overpayment issue should have been resolved to help mitigate the foreseen doubled debt which is expected to crush graduates in 2024.
