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Student Debt Reforms Are On The Way

In a follow up to our recent story about the rising levels of student debt - said by some to have reached a high of £22 billion - the government has stepped in to make formal changes to the way student loans are repaid. In the UK each student who has taken out a loan with the Student Loans Company (SLC) will have 9% of all income deducted from their payslip over the threshold of £15,000. However, there have been a number of issues with this process and many students have been overcharged by hundreds of pounds.

It seems that a delay in communication between the HM Revenue and Customs and the SLC has seen payments taken from students even after the full amount has been paid back - HM Revenue and Customs will continue to deduct the payments until told to stop by the SLC. Even though many students have been able to keep track of how much they owe, the vast majority may not even be aware that they are paying more than they should to the SLC.

The change by the government will allow students to stop loan deductions from their salaries when they near the end of their debt repayment and review the situation. The student will then be able to calculate how much is left to pay and a timescale for full repayment - ensuring no over charges and the endless task of claiming the money back!

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