I’m paying off my student loan each month but the debt keeps on growing

I’ve been paying off my student loan since 2010 in monthly instalments of more than £200 via PAYE, yet the balance keeps growing and interest charges are ballooning. The problem seems to have begun when I changed jobs in 2012. Three years later, I discovered that none of my payments had been applied to my account.

The Student Loans Company (SLC) told me that, according to HM Revenue and Customs’s records, I don’t exist. HMRC insisted it was an issue for SLC. I sent four years’ worth of payslips to SLC twice (it lost the first lot) and, after 12 months, £12,366 was deducted from my debt. That didn’t include the cumulative interest charges. SLC insisted I was liable for these even though they were applied to an erroneously inflated balance.

That was in 2019. Since then, I’ve been unable to log in to view my account. SLC has variously told me there’s a block on it, that it’s being investigated by HMRC, or, more recently, that it isn’t authorised to discuss the account over the phone. It also insists it is not authorised to send paper statements, so can’t establish what I owe.
EK, London

SLC passed me on to HMRC, which promised an urgent investigation. It appears that when you changed jobs your national insurance number was merged with a stranger’s, so repayments were sitting in limbo for nine years with interest accumulating on the balance that, but for the error, should have been paid off. What’s truly alarming is that SLC and HMRC tried to offload you on to each other for the six years that you’ve tried to resolve the problem, and action was only taken when I got involved.

HMRC says: “We apologise and have updated our records to reflect the student loan repayments made to date. We have also arranged a £400 redress payment, and put measures in place to prevent a recurrence of this issue.” SLC, which did not provide a comment, has meanwhile decided that you owe £1,800, but has yet to explain whether this includes the unfairly applied interest. Obviously, you want the unsubstantiated sum written off. Your plight would be troubling enough if it was a one-off. However, other graduates have complained to me that they’re being charged for debts they’ve already paid, or blocked from checking their balance.

Londoner CE received confirmation from SLC that his loan was paid up in 2019. However, deductions from his salary resumed without explanation in June of this year. Again, SLC and HMRC blamed each other. “HMRC told me it had received notification from SLC in May to deduct student loan repayments,” he writes. “SLC said this must have been an error and that they would notify HMRC to stop taking payments and I would receive a refund from my employer.

“By September the payments were still being deducted, and SLC claimed that a mortgage-style’ loan, from Thesis Servicing on my account, was to blame. But it confirmed it had no record of anyone with my name.”

“In my final call with SLC, it said it could not provide any more details about this mysterious loan and that all it could do was notify HMRC again, but this would take up to two months. HMRC says it hasn’t heard from SLC. So I’m stuck in a bureaucratic nightmare which has, so far, cost me £2,000 that I can ill afford.”

Meanwhile, EW of London has been trying since 2018 to find out how much she still owes. “Every time I am told there is a balance error so there is suppression on my account, which means they can’t provide me with an accurate statement, or an estimate of when this will be resolved,” she writes.

It took media involvement to get SLC to acknowledge an error in CE’s case. Infuriatingly, after ignoring and misleading him for three months, it notified HMRC to stop the payments and promised a refund the day I contacted it. It says “He fully repaid his loan in 2019; the additional repayment deductions, taken from his salary, were the result of an administrative error by SLC. We wholly apologise for any inconvenience.”

In EW’s case it claimed that when there is a discrepancy between a customer’s repayments and their balance, access to the accounts are “temporarily” restricted, and statements suspended to protect customers from getting misleading figures. It didn’t say what this discrepancy was and miraculously, this three-year “temporary” restriction was ended as soon as I questioned it.

SLC says: “We have apologised for any inconvenience caused as a result of the restriction placed on the account, and can confirm that she is now able to access her balance and statements online, following an update to her account.”

Online reviewers report similarly troubling shambles with their student loan accounts. Customers who exhaust SLC’s formal complaints process without a satisfactory resolution can ask to be escalated to an independent assessor, although they have to rely on SLC to do this for them.

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