Student loans are collected by employers alongside income tax and national insurance contributions and passed to Her Majesty’s Revenue and Customs. At the end of each financial year, HMRC reconciles the loan repayments and passes the information to the Student Loans Company which updates borrowers’ accounts. In a small number of cases, HMRC needs to check the returns made by employers, and this can lead to delay in sending statements to borrowers.
There are no outstanding reconciliations relating to 2002-03 or earlier years; some 1,500 accounts (0.4 per cent. of the total) have still to be reconciled from 2003-04 with a value of about £400,000. HMRC expects to have reconciled nearly all of the 2004-05 returns by the end of June 2006.
The total amount of student loans outstanding at the end of financial year 2004-05 under the income contingent repayment scheme was £14,147 million. This includes loans not yet due for repayment: borrowers are not required to repay until they are earning £15,000 or more per annum1.
1 This figure also includes hardship loans and loans made to part-time students but does not include amounts lent under the old mortgage style loans system.