The Student Loans Company (SLC) is reaching out to tens of thousands of individuals on Plan 2 student loans regarding modifications to their account balances. Approximately 71,000 customers, representing around 1.3 percent of all current Plan 2 borrowers, have been impacted by technical issues.
Technical Errors Identified
Two separate technical glitches caused incorrect interest calculations for a minority of Plan 2 customers. The first error stemmed from a technical issue where the wrong income information was used when calculating interest. The second was due to an HMRC income reporting error that affected individuals with income from both PAYE and Self Assessment.
Both issues have now been resolved, and interest will be applied correctly moving forward. A statement on the Labour Party government website expressed regret: "SLC and HM Revenue and Customs (HMRC) are very sorry that this happened."
No Action Required for Most
Affected customers do not need to take any action, and regular repayment amounts will remain unchanged. SLC will directly contact those whose balance has increased due to these errors. Any balance adjustments will be reflected in the next annual statement, accessible in customers' online accounts before the end of September.
For individuals who have already paid off their loan, there will be no requirement to resume repayments. If they overpaid, they will receive a refund. HMRC added: "SLC and HMRC take their responsibilities to customers seriously and remain committed to putting things right when issues occur."
Understanding Plan 2 Loans
Plan 2 student loans apply to undergraduate courses taken in England or Wales between September 2012 and July 2023. Repayments are set at 9 percent of earnings above a threshold of £29,385, with any outstanding balance written off after 30 years. Interest is calculated using the Retail Price Index (RPI) plus up to 3 percent, though the government caps this rate at a maximum of 6.0 percent.
