There has been a 10pc annual increase in overpayments of student loans, with the average graduate £580 out of pocket

More than 78,000 graduates are being overcharged by the Student Loans Company every year, leaving the average borrower £580 out of pocket. There was a 10pc increase in the total value of student loan overpayments in 2013-14 compared with the previous year, thanks to outdated systems that are "not fit for purpose", accountants said. The figures, obtained under a Freedom of Information request by accountancy firm Baker Tilly, show the Student Loans Company took an extra £45.4m from graduates’ pay packets, up from £41.4m in 2012-13, when 70,600 were overcharged. Repayments for “income-contingent repayment” student loans are collected through the tax system. When graduates finish paying off their loan, the Student Loans Company is supposed to send a “stop notification” to HMRC informing it that no more payments are to be taken. The taxman passes this information on to employers, which stop deducting payments from employees’ wages. But the Student Loans Company receives information from HMRC about how much customers have repaid only once a year, after employers have finalised their annual tax returns. This means there is a time lag and thousands of people nearing the end of their loans overpay.......Read more here