(2) what his latest estimate is of the average time taken for HM Revenue and Customs to notify the Student Loans Company that a student loan has been repaid in full.
Repayment of student loans depends on the income of the borrower: the repayment rate is 9 per cent. of income over the equivalent of £15,000 per annum which is collected through HM Revenue and Customs alongside income tax and national insurance contributions. The repayment amount therefore varies according to their income.
The Student Loans Company (SLC) reconciles borrowers’ loan accounts at the end of each financial year. There may be overpayments when a borrower comes to the end of repaying their loan, which are refunded with interest, but these are not caused by late notification by HM Revenue and Customs.
The SLC is putting a number of measures in place to help customers avoid overpayment by giving them the option to make final repayments outside the tax system, via direct debit, to ensure they do not overpay. SLC have also introduced new guidance and tools, including an online calculator, to help customers work out their loan balance, and therefore when they are likely to pay their loan in full.