UK government will make changes to Student Loans Company (SLC) to ensure students are not overpaying their student debts. This is after it was revealed that students were overpaying their student loans by more than £10,000.
Students in the UK may be overpaying their student loans by more than £10,000, the government has admitted. Figures collected in 2017-2018, for instance, showed that more than 85,000 graduates overpaid their student debts, with around 40 graduates paying more than£10,000.
Chris Skidmore, Universities Minister, indicated that part of the problem is because graduates do not switch to direct debit when they are about to finish their debt repayment. The result of this is that the deductions of loan repayments on their salaries continue long after they are done paying them.
Overpaying of student loans
Skidmore advised graduates to use the direct debit once they near completion of loan repayments. He noted that only 34 percent of graduates switched to direct debit, a factor that has contributed to a large number of graduates paying more than they should. He also said that the government is also investing in loan repayment programs and graduates should take advantage of the available programs.
He continued by saying,
The Government is investing in the student loans system to make it as simple and easy for people to use as possible. I urge all graduates to use this new service and to join the direct debit scheme as they approach the end of their loan to ensure a smooth end and not repay more than they should.
The government, through the Department of Education, has already indicated they plan to overhaul the Student Loans Company (SLC). This will make it easier for graduates to track their debt and also avoid deductions once they are done paying their student loans. The previous system insisted that graduates were to continue having their salary deducted until the end of the financial year once they are done paying their student loans.
The government will introduce a new system in 2020 that will enable graduates to track the amount they are supposed to repay in student loans. The Education Secretary Gavin Williamson said the changes would help graduates avoid overpaying their student debts.
Featured image by Pixabay