The designer, who now lives in Gaborone, was one of the hundreds of graduates to respond to last Saturday’s Money report into the case of Jenny Richards, claiming they had similarly been on the wrong end of poor treatment. In her case, the SLC wrongly quadrupled the interest on her £42,000 loan from 0.9% to 3.9% for a perceived error she had never made. She had also gone abroad, in this instance only for a few months, but then faced a year-long battle to get the SLC to rectify the mistake and provide proof it had done so. Only Money’s intervention finally delivered evidence that her loan wasn’t growing at a higher rate, she says.
Fed-up graduates have since told us of being on the receiving end of similar treatment by the SLC, which many claim is not up to the task of administering the huge sums that student loans have become. They also complain of punitive charges and the bureaucratic nightmare of dealing with the lender. Many are furious it has been allowed to change significantly the terms of borrowing and raise interest rates after loans are taken out.
Ashworth’s case was one of the more extreme. The 37-year-old studied design at what is now Bolton University. “Before I left for Botswana I informed SLC, which asked me to complete an overseas assessment form, which I did, and my loan was frozen for 12 months. I had started a graphic design business, but the market here is saturated meaning it was slow to get going and my income remained below the repayments threshold.
“For the first couple of years SLC was sympathetic. However, last year it all changed and I found myself being contacted by representatives from a company called Transcom, a debt collection agency. My outstanding balance suddenly included a £930 arrears,” he says. Trying to get to the bottom of what had happened entailed countless emails and phone calls over a period of months. Eventually, it emerged that he’d been penalised because he had failed to include his date of birth on a form. “The whole experience was very unpleasant and I felt I wasn’t receiving any support or clarity from SLC. It essentially washed its hands of me. There’s no quick way to contact it when overseas. You can email but it can take 28 days to reply – assuming it bothers to do so,” he says. Ashworth has since paid off the loan apart from the £930, but says he can’t get a straight answer out of the SLC or Transcom as to his exact position.
And he is by no means alone. Those heading abroad appear to have had a particularly difficult time. Another wrote: “The SLC is horrendous to deal with. I’m living abroad studying for a doctorate and, despite sending all requested information, it continues to ask me for it. It’s a bureaucratic nightmare: on the phone they confirm receipt, then I get letters and emails. I repeated this a few times, then was told everything was in order. Next letter I got was to say my loan had been passed to a debt recovery agency.”
A repeated complaint is about the intrusive questioning and demands. Another graduate, who this time gave up his job to switch careers, described the problem of convincing the SLC he wasn’t working because he was not claiming jobseeker’s allowance. It wanted letters from his wife, bank statements and more. The matter took months to resolve, which he contrasts with dealing with HMRC which accepted his changed status with one letter and without fuss. He had considered doing a teaching course but says he decided against it, partly because it would have forced him back into the hands of the SLC.
A spokesman for the SLC told Money that Ashworth has not been hit with £930 penalty charges. Instead, this sum was demanded because he failed to fill in the overseas form for the year starting in February 2015, and it was assumed he was earning above the payments threshold. It has offered to send him a full statement setting out what he has repaid.
“SLC is committed to protecting the public purse and has a duty to collect all taxpayer monies owed. We endeavour to contact all customers who move overseas for a period of three months or more to ensure that those who should be making repayments are doing so, and to distinguish those customers who are not eligible to repay from those that are deliberately trying to avoid repaying.”
He declined to respond to wider questions about the way the SLC is managed.
Difficult dealings – your experiences
“This reminds me of my own student loan nightmare. I had started paying them back (and had made every payment) when, out of the blue, I got a letter saying one of my loans had gone into arrears and that I had to bring payments up to date, pay an arrears fee or face legal action.
It took ages to sort out – loads of phone calls and time spent going through bank statements before I thought to check the account number of the loan I’d missed payments on. Turns out they had mixed up account numbers and I’d been paying back someone else’s loan while they’d been failing to pay back mine. SLC agreed to cancel the fee but still tried to charge £15 admin for the letter they’d erroneously sent. SLC has always been a terrible organisation, it’s just much worse now the sums involved are around 10 times the amount I borrowed. It’s scandalous.” Norsked
“This ‘company’ is a nightmare. I’ve suffered from all sorts of administrative nightmares, only minor but absolutely opaque. No other provider of a loan would be able to operate in the same way.” Cloud9
“In my experience they have awful record-keeping practices. I phoned recently to find out how much I had paid and what my total loan was (so I could make an early repayment). The person on the end of the phone had to go away for 15 minutes and add up my contributions. When I rang again a day or two later I got a different answer to my questions. Scary when we’re talking 10s of thousands of pounds for most people.” D1255358
“My daughter worked abroad for a year and sent them all the documentation. She set up a direct debit to pay her student loan each month while she was away. At the end of the year she obtained a three-month job in the US. The SLC immediately started taking £250 a month out of her account as they had access to this through her direct debit (originally for a much smaller amount). This put her in financial difficulties. It was sorted out on her return to the UK, but they treat people extremely harshly.” ID5279121
“The government froze the threshold for repayment and hiked the interest rate retroactively, and, despite there being talk of a legal challenge, none has materialised. It appears that in this country, contract law means nothing if your contract is with a government-owned company. The contract I signed is no longer the set of terms I am held to, so the core principles being legally binding on both parties appears to simply not apply any more.” Alexandra Greenway
“The problem is the SLC isn’t regulated like any other company providing personal loans. They are able to fundamentally change the rules: payback thresholds, interest rates, going abroad – whatever they fancy. I was about to start some additional voluntary contributions but my work gave me a warning that SLC will not repay any accidental overpayments! It needs to be regulated in line with other financial services.” Mrvincent