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student loan repayments/statements

SystemSystem Posts: 8,629 Staff Team
for the past year and a half, i've been paying quite a bit of my student loan off each month. however, my balance online still hasn't moved AT ALL.

everyone seems to be getting statements through right now but i haven't got one and my balance online hasn't changed. its really worrying me.

is it possible that although i appear to be paying off my student loan on my payslip that i'm actually not paying MY loan off?

i rang them up a few months ago about my concerns and they just told me to wait for a statement. apparently they sent me a statement on the 10/06 but i never received it and they've definately got my new address.

its just really worrying me that my debt isn't going down yet i'm paying it off and i'm not receiving any sort of statement at all.

Comments

  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Your employer makes the deductions but they only go to the SLC at the end of every tax year (March 31st). Your employer will keep the funds in an escrow account to earn interest (for them).

    Example:

    O/S Student Loan: £10,000
    Monthly deduction: £250
    Deduction x 12 months: £3,000
    Interest rate payable on escrow account: 3%

    At the end of the tax year, assuming contributions started in April, whilst the SLC receives £3,000 and deducts that from your o/s balance (whilst adding on interest charges), your employer, by keeping the money in an escrow account at 3% p/a on amounts increasing by £250 each month, has pocketed £48.75 (had to do a quick Excel formula to work that out :)).

    Sadly that's the way things are - it's perfectly legal. If they paid the money every month, they wouldn't earn any money on your SLC payments.

    The SLC should send you an annual statement at the end of the tax year once your employer has coughed up the money.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    thanks for the reply :)

    i've just given them a call. they are actually aware of the money i've paid off in the past year but they've only just received the information. they've told me to expect a statement in about 2-3 weeks time
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Does the employer deduct money to pay student loans in the UK? Odd.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    Your employer makes the deductions but they only go to the SLC at the end of every tax year (March 31st). Your employer will keep the funds in an escrow account to earn interest (for them).

    Example:

    O/S Student Loan: £10,000
    Monthly deduction: £250
    Deduction x 12 months: £3,000
    Interest rate payable on escrow account: 3%

    At the end of the tax year, assuming contributions started in April, whilst the SLC receives £3,000 and deducts that from your o/s balance (whilst adding on interest charges), your employer, by keeping the money in an escrow account at 3% p/a on amounts increasing by £250 each month, has pocketed £48.75 (had to do a quick Excel formula to work that out :)).

    Sadly that's the way things are - it's perfectly legal. If they paid the money every month, they wouldn't earn any money on your SLC payments.

    The SLC should send you an annual statement at the end of the tax year once your employer has coughed up the money.

    surely my employer shoudln't be making money though from my student loan repayments and it should be the student loan company?

    jaloux - our student loan repayments come out like a tax. 9% of any money we earn over £15,000 comes out.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    surely my employer shoudln't be making money though from my student loan repayments and it should be the student loan company?

    jaloux - our student loan repayments come out like a tax. 9% of any money we earn over £15,000 comes out.

    Sadly that's the way it is. The only way to circumvent it is to be self-employed. Morally shady it may be, but there's nothing illegal about it.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    I'm pretty sure my student loan has gone up, despite working full-time for the past four years.
  • Former MemberFormer Member Posts: 1,876,324 The Mix Honorary Guru
    surely my employer shoudln't be making money though from my student loan repayments and it should be the student loan company?.

    No, they should be paying it over every month/quarter along with the rest of the income tax and national insurance contributions.

    It does take a while for the information to feed through to the SLC. The end of teh tax year is 5th April, employers are supposed to file their year end payroll reports with HMRC by the 19th May. HMRC (being the wonderfully ineffiecent bunch of twits they are) then have to collate this and send the info through to SLC to update their files. If your SLC balance its not updated by September I would start to worry and chase them up.
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