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Graduates advised on repayment options
Graduates are
being reminded of two options available when they are coming to
the end of their loan repayments.
They can either sign up to the direct debit scheme with the
Student Loans Company, meaning that repayments stop at exactly the
right time, or continue to repay through the tax system which may
result in overpaying. If overpayment occurs they will be
reimbursed by SLC at the end of the tax year, with interest.
Latest figures show that of the 106,000 customers coming to
the end of their loan 34,000 took up the offer to pay by direct
debit or paid their loans off in full.
Kevin O'Connor head of repayment at the Student
Loans Company said: "Student loans are collected through
the tax system, so by the time employers tell HMRC and HMRC tells
the Student Loans Company how much of your loan you have paid
through PAYE, you could have already paid more than you are due to.
"The most efficient way to repay your loan as you
approach full repayment is through the direct debit scheme for the
last two years of your loan. If you don't wish to pay by
Direct Debit you can continue to pay through the tax system and be
reimbursed when we receive the information from HMRC.
"Switching to Direct Debit means you can choose your
monthly repayment date and we can make sure your repayments stop
at exactly the right time," he added.
The Student Loans Company recommends that you:
• Keep
track of your balance and repayments by logging on to
www.studentloanrepayment.co.uk.
• Check that you are within
two years of completing your repayments - if so, we will ask you
if you would like to switch to repaying by Direct Debit.
More
than 40,050 customers chose to continue to pay through the tax
system last year and were reimbursed by an average £557.
Further information:
Rona Cameron/Breea Keenan 0141-306 2120
BACKGROUND
Student loans are collected through the tax system. This is
because using the existing tax collection processes of HMRC was
determined to be the fairest and most cost effective, both for
customers and for UK taxpayers.
The Student Loans Company receives information about what
customers have repaid from HMRC once a year once employers have
sent in their tax returns.
We cannot determine the amount repaid by borrowers until
employers make their annual tax returns. The result is that there
is a lag, and means some borrowers nearing the end of their
repayments are likely to overpay.
All money overpaid is refunded with interest.
About the Student Loans Company:
The Student Loans Company provides financial assistance for
people who want to go to university or college, offering loans and
non repayable grants for studying and living. The company provides
loans for tuition fees, which are paid directly to the university
and college.
We have more than 4 million customers, 1.1 million student
customers and 2.9 million customers no longer in higher education.
Contacts:
NDS Enquiries
Phone: For enquiries please contact the issuing dept
ndsenquiries@coi.gsi.gov.uk
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