Growing numbers of graduates are being overcharged for their student loans, it emerged today, prompting claims that the system is in “disarray”.
Figures show that the Student Loans Company has been forced to pay back more than £107million since the late 90s after taking cash from graduates who have already cleared their debts.
Repayments leapt by more than 15 per cent last year alone to some £22m, it was revealed.
A total of 40,050 graduates overpaid in the tax year ending in April 2010, compared with just 117 a decade earlier.
It is feared that the scale of overpayments will soar in coming years when the cap on student tuition fees almost triples to £9,000 forcing students to borrow considerably more money.
Students criticised the system today, saying it often took months to reclaim their money.
Nicholas Lativy, a 26-year-old software engineer, told the BBC that he overpaid by £4,000 but had to make five phone calls and fax three separate sets of documents before his repayment was approved.
“The amount that has been overpaid demonstrates that the system is broken,” he said.
“I had to take hours at a time out of work… every time you phoned up you’d get a different person on the line and it took a long time to explain the situation to them again and again.
“It was very frustrating and quite stressful.”
The SLC receives information about customer repayments once a year after employers make their annual tax returns. This results in a time lag and means some graduates overpay if the debt is wiped out during the tax year, a spokesman said.
According to figures released after a Freedom of Information request, 40,050 customers made £22.3m worth of overpayments last year. This compares with 36,617 graduates making £18.9m of overpayments in 2008/9 and 25,434 graduates overpaying by £15.9m in 2007/8.
In 2000/1 just £14,619 worth of overpayments were made by 117 students.
The total amount repaid by the SLC since 1998/99 now stands at £107.6m, figures show.
One graduate alone was overcharged by a total of £96,000 before having the money refunded.
But the SLC insisted it was a rare case and large overpayments were only usually made after the award of a huge bonus on top of a graduate’s usual monthly salary.
Officials also pointed out that all repayments included interest.
Separate figures also obtained by Radio 4’s You and Yours shows that the number of complaints received by the SLC almost doubled last year to 2,810.
One graduate who approached the programme said: “The whole system is in disarray.”
The SLC has since made changes to the system, allowing students approaching the end of repayments to switch to direct debit, giving them more control over when payments are stopped.
A spokesman said: “SLC has taken positive action to prevent over-repayments.
“Since introducing the direct debit scheme in 2009, we have contacted 106,000 customers to advise them that the direct debit option is available to them. 34,000 customers have either taken up the direct debit scheme or paid their loans off in full.”