HMRC has overcharged 40,000 graduates on their student loan repayments due to a data error. The tax authority used incorrect earnings information to calculate interest charges over several years, potentially pushing borrowers into higher interest rate brackets.
Impact on Graduates
According to a joint statement from HMRC and the Student Loans Company (SLC) on Thursday, around 41,000 Plan 2 graduates could see their loan balances decrease as a result of overpayments. However, a further 30,000 customers were undercharged interest, meaning their overall balance may increase.
Ollie Gardner, founder of Rethink Repayment, a graduate-led campaign group, criticised the error. He said graduates already feel like “cash cows” for universities and the government, and this mistake adds to their frustration.
“The Student Loans Company balance error is worrying, but for many graduates it will feel like just another example of a system that consistently lets them down,” Gardner said. “For graduates trying to save for a home, start a family or invest in their futures, having accurate information about their student debt is essential.”
Alex Stanley, of the National Union of Students, added: “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.”
Further Reactions
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”.
A spokesman for the SLC 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.”
