Belfast Telegraph

Outcry after student loan overpayments of £8m are extracted from NI graduates

By Allan Preston

Graduates here overpaid nearly £8m in student loans in five years.

Overpayments have been rising steadily, with thousands of people affected, figures show.

A student organisation said it was "deeply troubling".

In 2016/17 - the most recent year for which figures are available - around 3,200 graduates overpaid a total of £1.7m, with an average overspend of £540 each.

The details were released by the Student Loans Company (SLC) after a Freedom of Information request.

It said all money is repaid with interest, and it is working to address the issue.

The SLC is a non-profit making Government-owned organisation that provides loans and grants to students in universities and colleges in the UK.

In each of the two years previous to 2016/17, 2,900 graduates were affected, with a total of £1.56m and £1.58m overpaid respectively.

In 2013/14 around 2,600 graduates overpaid £2.6m, with 2,300 overpaying £1.3m in 2012/13.

A graduate may be included in more than one year's figures.

A report from this newspaper in 2012 showed the figure was substantially lower in previous years. In 2005/06 just 430 graduates in Northern Ireland overpaid a total of £215,000.

This increased every year between 2006/07 to 2009/10, when 1,530 graduates overpaid £822,400.

Olivia Potter-Hughes, the president of the National Union of Students-Union of Students in Ireland (NUS-USI), said the level of overpayments was very shocking.

"It is deeply troubling that there is a situation where students here are overpaying student loans," she said.

"It is staggering that around 3,200 people are overpaying an average of £540 as regards the 2016/17 year. Think how many weeks' income that represents for students."

She said it was important that those who overpaid were reimbursed as a matter of urgency.

"We want to see moves to reduce student debt through the provision of additional public funding for student support and higher education," she added.

"Investing more in tertiary education will deliver significant benefits to the economy by driving the economy with skills and qualifications, while also helping remove barriers to people commencing courses."

Ulster Unionist MLA Rosemary Barton said the arrangements had become "ridiculous", adding: "The system is clearly broken."

She said: "This obviously isn't a one-off or a blip, the problem is getting worse with every passing year and unfortunately increasing numbers of graduates are getting caught up by it.

"It's ridiculous that the problem has been going on for so long and these latest figures would suggest that nothing whatsoever has been done to resolve it."

Ms Barton called on the SLC to get to the root of the problem and sort it out.

"It is also long past time that the Government should step in and intervene, given its responsibilities," she added.

The SLC said student loan over-repayments occur due to the nature of the Income Contingent Repayment (ICR) student loan repayment scheme, which has been in place since 1998, where repayments are made through the UK tax system via Pay-As-You-Earn (PAYE).

ICR student loan repayments are collected through the UK tax system where borrowers remain in the UK.

The SLC said it receives student loan repayment information annually from HMRC, and the result of this process means that some borrowers nearing the end of their repayments may over-repay. The SLC said it proactively contacts borrowers to advise them they have over-repaid their loan.

It said that if an over-repayment is identified on a borrower's account, money over-repaid will be refunded, plus interest. The borrower can also contact SLC to request a refund.

The SLC said it was working with HMRC to consider how repayment information can be shared more frequently between the two organisations.

The SLC said the percentage of borrowers overpaying their loans had not increased significantly since 2009/10.

"There is no need for customers to over-repay their loan," it said.

"Providing they have kept their contact details up to date on their online account, they will receive a letter from us when they are within 23 months of repaying the balance of their student loan account in full, inviting them to manage their final repayments by opting into our direct debit scheme.

"This moves them out of the PAYE scheme and on to a direct debit which means that their repayments stop immediately when their loan is repaid."

The SLC said any person who goes into credit by £5 or more in a particular year will be included.

Belfast Telegraph

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