Graduates overcharged £69m on their student loans

MORE than 93,000 graduates were overcharged on student loan repayments this year because of outdated HM Revenue & Customs data.

Borrowers were refunded £69.4 million in 2016-17 because monthly repayments were deducted after they had already settled their debt in full. The latest figures, released by the Student Loans Company (SLC) under a Freedom of Information request, suggest the situation is getting worse.

This year, 93,200 graduates were affected — a fifth more than in 2015-16 when 77,200 people were hit with payments totalling £53.4 million.

Critics blame HMRC’s ‘nightmare’ systems which update records annually. HMRC deducts payments directly from graduates’ pay, but only passes on these details to the SLC at the end of each tax year.

It can then take seven months for individuals’ accounts to be updated, meaning some overpay for 19 months.

George Bull, of accountancy firm RSM, says: ‘The process of preventing further deductions can be a nightmare.’

An SLC spokesman says it writes to graduates within two years of paying off their loan and offers the option of direct debit payments. These will then stop automatically when their debt is repaid.