Student loan repayment system could be overhauled

09 July 2008 In Graduates

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Student loan repayment system could be overhauled The system that controls how much of their student loan graduates have to pay back could be reformed.

According to the Daily Mail, authorities are currently looking at ways the repayment system could be overhauled to prevent graduates overpaying their student loan.

Currently, graduates automatically pay nine per cent of their salary over £15,000 to cover their student loan repayments. At the end of each year, HM Revenue & Customs pays this to the Student Loans Company (SLC).

However, the paper has learnt that some graduates are finding they have overpaid their debt because it is hard to stop payments when the balance is cleared.

Two graduates said they had both overpaid by as much as £1,000 and found it very hard to get the money back or stop any further payments.

SLC spokesperson Ian McLaren Thomson explained to the paper: "We are aware that when people come to the end of their loans, there is often a very confusing period.

"We appreciate that trying to reclaim overpayments can be very frustrating and this is why we are endeavouring to make changes to make it easier."

Mr McLaren Thomson said that the SLC was considering a plan to let graduates who are within 12 months of paying off their loan switch to a direct debit system.

Recent government figures suggested that student were having to borrow more money to fund their university courses.

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