Thousands of college graduates are in line for reimbursements following an accidental increase in their student loan balances. The Student Loans Company (SLC) has identified two issues impacting certain plan 2 loans, covering undergrad programs from 2012 to 2022.
One issue was a technical glitch leading to incorrect income data being used in interest calculations. The other problem stemmed from an HMRC income reporting error affecting individuals with earnings from both PAYE and self-assessment.
A total of 71,000 people have been affected, with 41,000 seeing their loan balance rise erroneously and 30,000 experiencing a decrease. SLC will reach out to those whose balances were inflated due to these issues, ensuring refunds for any overpayments.
Customers whose balances decreased without overpaying will not receive refunds but will have their accounts adjusted with accurate interest rates. Those who have fully repaid their loans will not face additional repayment obligations.
SLC has rectified both errors and assures that corrections will reflect in the next annual statement, expected by the end of September. Approximately 1.3% of present plan 2 loans were impacted.
An SLC representative stated, “We are informing some Plan 2 customers about correcting their loan balances post-resolution of technical issues. Affected customers need not take any action, as regular repayment amounts will remain unchanged. SLC and HMRC regret any inconvenience caused.”
In related news, interest rate caps for plan 2 and plan 3 student loans are set for the 2026/27 academic year. Currently, plan 2 loans incur a 6.2% interest rate during studies, based on RPI plus 3%. Post-study, interest rates are income-dependent, with high earners facing RPI plus up to 3%.
Starting September, interest rates will be capped at a maximum of 6%, addressing concerns over escalating debts for graduates. Many students express frustration over loan debts increasing annually despite consistent repayments due to existing interest rate terms.
