I’ve got a confession to make: I went to university quite a while ago. I graduated (I hesitate to say fresh-faced) in the summer of 2001. I was in the first year to pay tuition fees, thanks to the suggestion of the school careers adviser, Mr. Tottman, to have a gap year. (I had a good gap year, it’s fine. Just don’t mention it to my Dad.) I was supported through university by my parents and by loans from the Student Loans Company. In more recent years, the company has been beset with problems, resulting in the company’s boss being forced out, but back at the dawning of the new millennium I didn’t experience any of these problems. My loan got paid out on time and I left university with what current graduates would probably describe as a tiny amount of debt.
Once I had started to earn enough money to cross the threshold, which was £16,000 per annum for students but is now just £10,000, repayments were automatically deducted from my salary. 6% of anything I earned over the threshold was taken by HM Revenue and Customs and passed to the SLC. During these years I received annual statements from the SLC informing me how my repayments were progressing and what the remaining balance was. For some reason these statements were always wildly out of date: One issued in September 2008 detailed repayments between Aprils in 2006 and April 2007. I dismissed this as a quirk of public sector computer systems and accounting.
Having graduated a fair while ago with a relatively small amount of debt and having gained various promotions over the years, I had paid off most of my loan and was expecting to pay it off entirely during the course of this year. In June, I received a letter from the SLC, which started
We have recently received your Student Loan PAYE repayments
Well, one would hope so as they had been being deducted monthly for almost a decade. It continued
[We] estimate that you may be due to complete repayment of your Income Contingent Loan(s) within the next two years.
Indeed, my quick calculation showed that it should be completed within two months, rather than years.
We can now offer you the option of repaying your remaining balance by Direct Debit … to reduce the possibility of paying back more than you need to.
Well, that sounded good to me. After some faff with the security details for the website (which I couldn’t recall receiving) I was able to set up the Direct Debit. Unfortunately I couldn’t find any way to request PAYE deductions be stopped. The letter had informed me that I needed to make this request as well as setting up the Direct Debit. So I tried calling the telephone number on the letter. That was not in service, an abrupt error message disconnecting me without indicating which digits I should dial next. I found another number on the website and called that, and got through.
I explained to the guy at the other end that I had set up a Direct Debit and wished my employer to cease PAYE deductions. He spent a few minutes calculating when my final repayment would be (August) and then told me that I couldn’t switch to Direct Debit because I was too close to completing my repayments via PAYE. Apparently the PAYE deductions couldn’t be stopped that quickly. So, despite sending me a letter telling me to set up a Direct Debit within the last few months of my loan repayments, I shouldn’t have set up that Direct Debit. He said he would cancel it for me (but didn’t, and I ended up blocking it at my bank account). He also said he would set up an automated “stop notification” for the PAYE deductions to be sent out in the middle of August. Foolishly I didn’t question why a stop notification could be scheduled for mid-August to stop repayments after the end of August, but one couldn’t be sent out in mid-June and stop repayments in a similar time-frame. I was also going to overpay my loan by the grand total of £40, because the SLC couldn’t stop the repayments before August, and would have to reclaim the overpaid amount somehow.
Last week I received another letter from the SLC saying
A notification has been issued to HM Revenue & Customs to advise them to cease collection of Student Loan repayments. Please note that HM Revenue & Customs cannot guarantee an exact date on which your employer should cease making deductions from your wages, therefore repayments may not stop precisely on the date we have estimated. If your repayments have not stopped within 2 months of receiving this letter, please contact us using the telephone number below.
The telephone number is the same non-functioning one included on the letter in June. The notification is presumably the one that was set up for me in June, but contrary to what I was told at the time, it appears that it may take another couple of months to stop the deductions from my wages. One might wonder what the point of setting up a scheduled notification was if it wasn’t actually going to stop the repayments in any short order. One might also wonder what the harm would have been in sending the notification on June and letting me make any necessary remaining repayments via cheque or BACS. But it seems my over-payments may run for the next couple of months and into the hundreds of pounds.
Finally, there was this.
The Student Loans Company cannot confirm that the balance of your loan has been fully repaid until we have received confirmation of the repayments from HM Revenue & Customs following the end of the relevant tax year. At this time we will contact you, and in the case of any overpayment provide a refund.
So, not only have I overpaid because of the bizarre and seemingly random nature of the PAYE notification system, I could well do so until Christmas. And then I’ll have to wait till some time after April 2011 to be told how much I’ve overpaid and, presumably, to get it back. I am willing to bet that I won’t receive it on the 7th April either.Pin It