Student Loans Company

[josh w]

I received the following text and link in an email. Does anyone know how accurate this is?


'For most unsuspecting graduates who are paying back their student loans, the inland revenue takes payments directly from your employer in the same way as they take tax. i.e. the more you earn the more you pay, this includes bonuses etc. However after taking monthly amounts the inland revenue does not pay this directly to the student loan company, instead they wait until the end of the financial year in April and then pay the entire year off to student loans.The effect of this is that the inland revenue hold on to your monthly payments for up to a year earning themselves interest. During the same period, because student loans have not received these funds, they in turn charge the graduate interest on the outstanding amount even though it has been paid to the inland revenue.Bottom line is that for those in this position we pay interest to student loans on money which has been taken from our accounts which the inland revenue keeps and earns interest on.I have researched this and there are others who have become aware of this and I plan to join the fight!As a start I strongly suggest you sign up to the online petition below. I am looking into the legality of what is being done to us as I can see no other description for this other than THEFT!!!!Sign up now and join the fight. Send this to everyone!I will be forwarding dates for the march on Parliament!

http://petitions.pm.gov.uk/Student-loans/'

[Gingerheid]

It's not accurate.

Although the Revenue generally receive payments from employers monthly (or it could also be quarterly) they don't know who the money was taken from or what for until the end of the year, when they get copies of everyone's P60s.

At this point they credit the student loan accounts (as well as the PAYE and NI records) for the year before. Student loan accounts are credited as if all the money deducted was paid evenly throughout the year, and interest is charged as such. This isn't a 100% accurate; if the money was actually deducted from you late in the year you will pay less interest than you would have, and if the money was all actually deducted from you early in the year you will pay slightly more; but not by any meaningful amount.

The reality is that in the vast majority of cases people's deductions will increase throughout the year (pay hopefully goes up over time) and therefore overall this arrangement is beneficial to the borrower.

Not only that, but to multiply the end of year work the Revenue do by 12 times (effectively doing an end of year once a month) would incurr the Revenue in massive amounts of extra work; thousands of people work processing the end of year information and they spend most of the year doing it. This would make loans in turn more expensive by mich more than what you might save from a few pennies you might hypothetically have overpaid (but probably actually underpaid).

The petition is utterly pointless; but it's amazing to see how many people have signed it regardless. If only the viral had whipped up fury about something worthwhile and that was actually real!!!

I'd love to see if anyone manages to arrange a march on parliament without realising they're wasting their time beforehand!!!

Bed sheet and paint to prepare banner for march on parliament; £5
Coach fare to London; £25
Seeing their faces when they realise they've been asking for something that would probably see them lose out financially... priceless!

[Gertie100]

The other thing to remember with student / graduate loans is that you have to keep paying until the end of the financial year -so for example if you technically pay off the loan with May's payment they will not stop taking the money until the following April when you then send your P60 they will refund the money for the last 11 months payment.
Pain in the bum or what!