The HMRC regional office in Croydon, England. HMRC believes they "probably" could handle UK's student loan program alone.
According to a report from The Times, roughly 86,000 college graduates from the United Kingdom collectively overpaid their student loan debt by £50 million in 2016.
The Times obtained the data through a freedom of information request. In comparison to the 86,000 college graduates that paid more than necessary in 2016, approximately 52,000 former students overpaid in 2010.
Additionally, The Times found that the average amount overpaid per student was £592. However, 260 college graduates overpaid an amount between £5,000 and £10,000.
HM Revenue and Customs (HMRC), a department within the UK government that is responsible for the administration of various payments, has shifted the blame for the overpayment to the Student Loans Company (SLC). HMRC contends that the SLC has problems in regards to analyzing the repayment collection data fast enough to keep up.
HMRC is the organization receiving real-time employer data and collecting student loan payments on a monthly basis through the UK’s “pay as you earn” system. Data on how much HMRC has collected is only transferred to the SLC once a year.
Each autumn, UK graduates receive an account update that notifies them of the student loan debt balance and interest rate at the end of the last tax year. However, the current system does not allow student debtors to see a current figure of how much they owe, and the balance and interest rate figures that are visible on their accounts are anywhere from five to 17 months out of date.
Now, questions are arising in the UK Parliament about whether HMRC should be given full responsibility in handling student loans. Jon Thompson, Chief Executive and Permanent Secretary of HMRC, stated that the organization could “probably” handle the responsibility.
The SLC informed The Times that they are working with HMRC to explore ways in which they can jointly improve the management and handling of student loan repayment data.
For UK’s student loan borrowers, finding out that they were repaying more than necessary will likely make them even more disgruntled with the UK’s handling of the student loan debt problem. In June, The Student Loan Report covered the fact that the UK’s national student loan debt had risen above £100 billion for the first time ever. In July, the Institute for Fiscal Studies released a report that said UK graduates will soon begin owing an average of more than £50,000 in student loan debt. On September 1st, the UK government raised student loan interest rates to 6.1 percent after much debate and backlash.
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