I got £400 compensation after huge student loan error landed me with unnecessary debt – thousands more could be affected
A GRADUATE was left feeling “really anxious” after a system error meant her student loan was not wiped for four years.
Jennie Bradbury, 38, from Stoke-on-Trent, had taken out a student loan to cover her tuition fees worth £2,395 in July 2013.
But she ended up in a years-long tussle with the Student Loans Company (SLC) when it failed to automatically write off her loan when it should have done due to a system error.
The SLC is owned by the government and manages student loans and grants for students at universities and colleges in the UK.
Jennie is among around 4,000 people affected by the same error, the Parliamentary and Health Service Ombudsman (PHSO) has found.
Those affected by the system error were students who had taken out Advanced Learner Loans.
These help students get to university when they don’t have relevant qualifications such as A-Levels.
You can apply for an Advanced Learner Loan to help with the costs of a course at a college or training provider in England, so that you can then study for a degree afterwards.
Once you’ve finished your degree, the SLC will then write off any outstanding Advanced Learner Loan balances you owe for your higher education course.
This means you don’t have to repay it.
Jennie’s loan should have been written off in September 2019 when she completed her degree.
When she contacted SLC towards the end of 2019 to ask if her loan had been written off, she was told it would happen automatically and she would be notified.
However, the SLC contacted Jennie in June 2020 and again in May 2021 to tell her the loan had still not been written off.
After repeatedly contacting the SLC, Jennie received an apology and £25 payment.
Jennie, not happy with the redress, later complained to the Independent Assessor for the Department for Education (DfE) in August 2022.
It recommended the SLC increase the payment to £200 and admitted the system issue was yet to be resolved.
Jennie then complained to her MP, who referred it to PHSO in February 2023.
The Ombudsman found the SLC should have written off Jennie’s loan in September 2019 but delayed doing so until September 2023 following an investigation.
Are you owed a student loan refund?
There are some circumstances where you might be owed a student loan refund. The four main ones are:
- You have made payments but you do not earn enough to start repaying your student loan
- You are on the wrong repayment plan
- You have finished paying off your student loan but payments are still being taken from your wages
- You started paying your loan too early
How you can claim a refund for any overpaid student debt depends on how you have overpaid.
For example, if you are on the wrong repayment plan, you should speak to your employer or call the Student Loan Company (SLC).
You can find out how to contact the SLC via www.gov.uk/contact-student-loans-company.
If you started repaying your loan too early, you need to contact SLC.
You can find out more via www.gov.uk/repaying-your-student-loan/getting-a-refund.
The SLC also failed to transfer the outstanding balance from the ALL loan to her graduate loan account.
The PHSO also recommended a further £200 compensation be paid to Jennie on top of the £200 recommended by the Independent Assessor for the DfE.
The SLC has already agreed to this total £400 figure and paid it to her.
Parliamentary and Health Service Ombudsman Rebecca Hilsenrath KC said: “Repaying a student loan is familiar to many university graduates, but the error made in this case caused real upset and frustration for Jennie.
“The problem was exacerbated by the fact that no one listened and no one did anything.
“Thousands of students have been affected by this and have been paying off a loan which should have been written off.
“We always seek to encourage learning from our investigations for organisations to take forward and improve their services.
“Complaints are an important source of learning and improvement.”
She added the PHSO was taking steps to stop the system errors from reoccurring.
The PHSO said there was no automatic compensation scheme in place for anyone else affected by the student loans issue.
However, you can take your case to the ombudsman and may be in line for redress.
You aren’t guaranteed to get compensation though, and any compensation might not amount to £400.
You can contact the PHSO customer service helpline on 0345 015 4033 Monday to Thursday from 9am to 4pm and from 8.30am to 12pm on Fridays.
You can also get in touch online via www.ombudsman.org.uk/making-complaint.
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