The Daily Telegraph - Saturday - Money
HMRC to blame for student loan errors, ousted boss claims
The Student Loans Company and the taxman are embroiled in a war of words over who is to blame for the outdated systems that cause thousands of graduates to overpay their loans.
In an interview this week, Steve Lamey, the former Student Loans Company head, blamed HM Revenue & Customs for the delays in improving the system.
The comments came after a Freedom of Information request from accountants RSM earlier this year found that for 2015-16, the latest figures available, 86,000 graduates had cleared their student loans and yet were continuing to pay thousands of pounds. This is an 80pc increase in the past six years.
The individuals repaid more on their loans than they owed, with the overpayments totalling £51m.
The average overpayment per graduate was £592, but in some cases it was more than £10,000.
Borrowers who overpay face a long wait for refunds, which, when they come, are paid with a derisory rate of interest.
The errors are due to HMRC collecting the bulk of graduates’ loan repayments monthly through their salaries, but handing this information to the Student Loans Company only once a year.
Mr Lamey, who was ousted from the Student Loans Company this week, said he asked for “realtime information” from HMRC to fix the problem. This would mean information on repayments was passed monthly to the loans company, eliminating many of the errors. He said he was told it would not be available until 2019 at the earliest.
“We have been asking HMRC for up-to-date student loan repayment data ever since the development of the real-time information system several years ago, but they consistently blocked our request,” he told The Times.
His comments follow Jon Thompson, chief executive and permanent secretary of HMRC, telling the Treasury select committee in September that the loans company was to blame.
He told MPs that HMRC had the ability to provide regular updates, as it does with other government departments and organisations, but that there was a question mark over whether the Student Loans Company could process the data. Mr Lamey branded the comments as “simply not right”.
HMRC said: “It is untrue to suggest that we are opposed to data sharing. We are committed to sharing repayment data with the Student Loans Company on a much more regular basis.”