HMRC to blame for student loan errors, ousted boss claims

The Student Loans Company and the taxman are embroiled in a war of words over who is to blame for the outdated systems that cause thousands of graduates to overpay their loans.

In an interview this week, Steve Lamey, the former Student Loans Company head, blamed HM Revenue & Customs for the delays in improving the system.

The comments came after a Freedom of Information request from accountants RSM earlier this year found that for 2015-16, the latest figures available, 86,000 graduates had cleared their student loans and yet were continuing to pay thousands of pounds. This is an 80pc increase in the past six years.

The individuals repaid more on their loans than they owed, with the overpayments totalling £51m. The average overpayment per graduate was £592, but in some cases it was more than £10,000.

Borrowers who overpay face a long wait for refunds, which, when they come, are paid with a derisory rate of interest.

The errors are due to HMRC collecting the bulk of graduates’ loan repayments monthly through their salaries, but handing this information to the Student Loans Company only once a year.

Mr Lamey, who was ousted from the Student Loans Company this week, said he asked for “real-time information” from HMRC to fix the problem.

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