HMRC has confirmed that thousands of students with Plan 2 loans will receive refunds following two errors identified by the Student Loans Company (SLC). Plan 2 repayment plans cover undergraduate courses that started between 2012 and 2022.
Technical and Reporting Errors
The first error was a technical issue that caused the wrong income information to be used when calculating interest. The second was an HMRC income reporting error affecting individuals with income from both PAYE and self-assessment.
Impact on Borrowers
These mistakes have affected 71,000 people in total. Among them, 41,000 saw their student loan balance incorrectly increase, while 30,000 saw their balance decrease erroneously.
HMRC stated: "If you have already paid off your loan in full, you will not have to start repaying again, and if you have paid off more than you should have, you will receive a refund. SLC and HMRC take their responsibilities to customers seriously and remain committed to putting things right when issues occur."
No Action Required
An SLC spokesperson said: "We are contacting some Plan 2 customers to inform them we’re correcting their loan balance following technical issues which have now been resolved. Those customers affected do not need to take any action, and regular repayment amounts will not change. SLC and HMRC are very sorry that this has happened."
Reactions
Alex Stanley of the National Union of Students commented: "Trust in the student finance system is fast eroding. It is a broken system that isn’t working for students, isn’t working for graduates, and isn’t working for the government. We’ve seen the terms change, weekend students have their loans taken away, and now two errors affecting the balances of thousands of graduates."
Conservative leader Kemi Badenoch has pledged to abolish real interest rates on Plan 2 loans. Alex Race of wealth manager Rathbones said this was another example of graduate workers being "further penalised by their loans and left out of pocket."
