Number of students on the wrong plan type for repayment in 2020/21

The request was partially successful.

Dear Student Loans Company Limited,

Please could you tell me the number of students/customers who overpaid their student loan in 2020/21 tax year due to being on the incorrect plan type?

Please could you give 2020/21 figures for the below comment:

SLC has told us that between April 2019 and April 2020, 102,658 graduates and other borrowers had Plan 1 deductions taken when they should have been on a Plan 2.

The SLC told us that in 2019/20 some 30,224 borrowers who are actually on a Plan 1 loan were on a Plan 2 repayment plan instead.

Thanks for your help.

Yours faithfully,
Clare Casalis
MoneySavingExpert.com

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FOI Requests, Student Loans Company Limited

Dear Clare
Thank you for your email dated 5th April 2022.
Your request is being considered under the terms of the Freedom of
Information Act 2000 (“FOIA”).
Your request has been allocated reference number 72-22.
We will respond to you under the terms of the FOIA and within 20 working
days.
We will contact you further for clarification of your request if this is
considered necessary.  
Yours sincerely
Louise Chapman | Senior Legal Executive
Freedom of Information Office
Student Loans Company
100 Bothwell Street, Glasgow G2 7JD

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FOI Requests, Student Loans Company Limited

Dear Clare Casalis

We refer to your recent email dated 5th April 2022 requesting the following
information under the Freedom of Information Act 2000 (“FOIA”):

“Please could you tell me the number of students/customers who overpaid
their student loan in 2020/21 tax year due to being on the incorrect plan
type?

Please could you give 2020/21 figures for the below comment:

SLC has told us that between April 2019 and April 2020, 102,658 graduates
and other borrowers had Plan 1 deductions taken when they should have been
on a Plan 2.

The SLC told us that in 2019/20 some 30,224 borrowers who are actually on a
Plan 1 loan were on a Plan 2 repayment plan instead.”

Response

When a student loan borrower begins new employment their employer may ask
them to complete the HM Revenue & Customs (“HMRC”) Employer Checklist,
which asks for information on which plan type loan they have, when they
began study, when they entered repayment and if their loan has already been
repaid. This checklist is not mandatory so some employers may use a
different method to obtain information from the borrower on what plan type
their loan(s) is/are. The employer PAYE guidance (
https://www.gov.uk/new-employee/student-...) advises employers to deduct
against plan 1 if a borrower does not know which plan type they are on when
they commence employment. If an employer has the incorrect plan type for a
borrower, Student Loans Company Limited (“SLC”) can make an HMRC referral
to correct this. Borrowers can download a copy of their plan type on the
Online Repayment Service (
https://www.gov.uk/sign-in-to-manage-you...) and can
hand this to their employer to avoid deductions being taken against the
wrong plan type and our guidance also makes it clear to people how to
establish which plan type they are on. Employer compliance is a matter for
HMRC and HMRC have recently introduced prompts to employers’ payroll
software to address errors in the employers handling of student loan
deductions.

Question 1
We can advise that SLC does not hold the number of borrowers who have
overpaid due to repaying against the wrong plan type, only the numbers who
should be on plan 1 who have made plan 2 repayments via PAYE and vice versa
(they may not necessarily have overpaid) and the total amounts repaid and
refunded due to repaying against the wrong plan type. It may be that the
requested information may be held by HMRC. Employers may also hold the
requested information about their own employees.

Any borrower who believes that they may have overpaid due to repaying
against the wrong plan type can contact SLC to establish if this is the
case, and if so, can request a refund.

Question 2
The table below shows a summary of borrowers where deductions have been
taken against the wrong plan type for 2020-21:

| Number of
| borrowers
------------------------------------+-------------
Plan 1 deductions taken rather | 83,893
than plan 2 |
------------------------------------+

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