“The Student Loans Company (SLC) overcharged graduates by £22.5 million last year, according to figures obtained by Moneysavingexpert.com.
An average overpayment of £557 was taken from the pay packets of over 40,000 borrowers in the last financial year after the SLC continued to take payments from graduates who had already cleared their debt.
Although the number of former students affected by overpayments was down year-on-year, the amount taken in error was up by £15 million from the 2009/2010 tax year.
The SLC is supposed to notify Her Majesty’s Revenue and Customs when borrowers have cleared their outstanding debt so that payments can be stopped. Student loan repayments are taken directly from the pay packets of borrowers, supposedly until the money they owe has been paid in full.
The company says it endeavours to pay any overpayments back as soon as is possible, but the consumer group Which? reported last year that it can take up to six months for graduates to get their money back, causing temporary financial hardship.
Dan Moore from Which? Money, said: “It’s dreadful that payments are being taken from ex-students’ accounts, even though they have already faithfully repaid all the money they owed. The problem is that the repayments system is woefully inadequate.” “”