Graduates who have paid off their student loans say they are continuing to have as much as £300 a month taken from their pay packets by the Student Loans Company, with some talking of two-year battles to obtain refunds. These are among the latest complaints from graduates who allege shocking treatment at the hands of the government-backed SLC – treatment, they argue, no other UK financial institution would be allowed to get away with.

Tej Ryatt, from Hornchurch, Essex, has spent the last three months trying to stop the SLC taking £300-plus each month from his pay packet. After calling five times, he says he is getting nowhere and fully expects the money to be deducted next month.

The IT worker, who finished his business and computer science degree at Westminster in 2005, says he has now overpaid by £3,000. “Every time I ring them I’m told that they will send a ‘stop’ notification to my firm’s payroll department. But when I question the payroll staff, they say no such notification has been received.

“I also applied for a refund with the information requested – this also seems to have been lost in the system. I’ve now made a formal complaint but it’s near pointless. It’s all so frustrating – it takes weeks to get a reply, in which time they have taken another payment.” Ryatt was just one of scores of graduates - and their frustrated parents - to respond to recent Money articles.

Top of the list of complaints is the inability to obtain an up-to-date statement of what is owed. The only figure produced is at the end of the last tax year – which can be months out of date.

What’s more HMRC, which collects monthly PAYE repayments, only sends the money to the SLC annually, at which point it is allocated to the loan account.

Customers allege that staff at the not-for-profit body regularly lose paperwork, but will heavily penalise any graduate (with 3% extra interest) who has moved abroad if they don’t supply complete details about their income – in paper, not email, form. The complexity of the loans structure post 2015, means the problems are only set to worsen unless the systems are reformed

Adding to concerns is that it has had three chief executives in the space of 20 months. The current one, Steve Lamey, was suspended last month.

While banks are regulated by the Financial Conduct Authority, the SLC is answerable only to parliament. Graduates with problems can’t go to the Financial Ombudsman Service to make a complaint. Instead, they must ask for the complaint to be escalated to an independent assessor appointed by the Department for Education.

If that is unsuccessful, their Parliamentary Ombudsmen will take on the case, but only if the graduate can enlist the support of their MP. If your MP is in hospital or simply uninterested the graduate will have nowhere to turn.

Last year the Parliamentary Ombudsman for England investigated just 30 SLC complaints of the 329 it received. It found in favour of the complainant in 40% of cases. It has called on people to be allowed to go directly to the body without involving their MP.

Parliamentary and Health Service Ombudsman Rob Behrens says: “Our casework has shown that some people have been given wrong information about whether or not they are eligible for a loan, that some payments have been paid into the wrong bank accounts and, in some cases, overpayments have been made.”Amatey Doku, NUS vice president, said the SLC’s problems are caused by the government’s deeply flawed approach to education funding

“The SLC is constantly put under pressure to recover as much student debt as possible, while the government publicly claims that the massive shortfall in loan repayments is a redeeming feature of their system. If the government intended for the tax payer to cover unpaid student debt, they would not be putting pressure on the SLC to hound graduates, they would not be selling off the student loan book and they would not be changing loan repayment terms retrospectively. When will the government wake up and realise that the system is in crisis?”

The Guardian asked the SLC’s acting chief executive for an interview but this was declined.

In a statement, the SLC says: “We have 4.7 million customers in repayment and, in the last financial year, we received complaints from less than 1% of this group.

“We acknowledge that errors can occur, and there are times when we may not meet a customer’s expectation of our service. When this happens we look to learn lessons from complaints and use them to improve the service we provide.”He said the SLC now writes to every customer who is within 23 months of repaying the balance, inviting them to opt into the Prevent Over-Repayment Scheme which ensures that direct debit repayments will stop when their loan is repaid.

In the case of Tej Ryatt, the SLC said it issued a number of ‘stop’ instructions to HMRC and that is has now sent a refund of £3544.82

The horror stories: in your own words



 I paid off my loan in 2012, or I thought I had. Two weeks ago I received a letter from HMRC asking for £4,600 because of an unpaid student loan debt. The SLC said it had apparently been wrong when it told me I’d paid it off. I’m now in a battle over whether I actually owe anything. I’ve no idea how it will end up.  Richard Locke

 I moved to Australia permanently three years ago and immediately let the SLC know. I now have to go through a painful reassessment of my income every six months – it requires my last six months’ pay slips, a letter from my employer confirming my pay and a copy of my contract. Every. Six. Months. Getting this to them is insane: I have to send it recorded delivery as they only accept paper copies. I asked if I could email them to my Dad, have him print them and send them and they said “no” because they need my signature to be original. They penalise people for doing the right thing and trying to repay.  SaffiyaScarlett

 I work in student support and we have someone to help students deal with SLC. It is Kafkaesque, in a very serious way. If they worked for me I would sack them for their mistakes. The Office of the Independent Adjudicator should be involved in all complaints even after people have stopped being students. Except it’s under resourced.  secondthought

 The SLC owes me money – over £1k, and probably nearer £2k. Money was taken wrongfully from my earnings resulting in an overpayment. I was told there was nothing I could do to stop it before the end of that tax year. At the end of that tax year, SLC said it was down to HMRC to repay me. HMRC says it can’t, due SLC procedures. That was over two years ago. Imagine the interest I would have been charged if it was the other way round.  deb3m

 The SLC is totally out of control. They continued to deduct money from my daughter, after the loan was paid off, only acknowledging this and refunding later. It should have been severely penalised financially, made to pay compensation. When my son moved, he advised the company and paid the loan BUT they traced his GRANDMOTHER of 86 and hounded her, making her extremely stressed and anxious. crocodilefat

 Working at a university, we deal with them all the time. You would be hard pressed to find a more incompetent bunch of folk, losing paper and emails, denying they ever received stuff when they’ve actually replied to it, being monumentally unfriendly/unhelpful, denying they sent something when you’re holding it, etc. They need to improve staffing (apologies to any of the few “good apples” reading this), processes and IT solutions – but there’s no real incentive to, I guess?  ID0674471

 I had student loans and fully paid them off in the 90s. Fast forward to this year and my son is asking me to fill in the parental income details. When I tried, I was told I already had an account but I couldn’t retrieve the password because I no longer have access to the email that was registered. They refused to discuss it because of ‘data protection’, apparently everyone remembers their address and work phone number from 16 years ago. Absolute shambles. Jeff Fox