Lunatics running the student loan asylum

Chris Thomas's picture

"School is the best days of your lives", my mum, dad, gran and every other Tom, Dick and Harry told me when I was a nipper and, to be fair, I wouldn't argue (especially with Harry...). University was even better (although perhaps there was too much time with my head in my hands as opposed to it being stuck in a book), but the financial burden of three years at uni is one that lives on.

As you can see across the Moneywise site, there are a number of worrying figures coming out regarding the financial status of many university students - Students unable to manage finances, as just one example.

The student loan is the most notable aspect of a student's financial life - and also a huge amount of money to give someone who (as a general rule) doesn't know their, ahem, bottom from their elbow when it comes to finances.

But, having reacquainted myself with the student situation, it's got me thinking: Just who (or what) on earth is running the allocation and repayments of student loans?

Now, a lot of this could be urban myth (or downright untruth), but the tales of people getting past the grips of the Student Loan Company (SLC) by changing their names/addresses are increasingly prevalent in pub discussions - which begs the question: Why didn't I think of that? (It also suggests that it's not exactly too hard to outwit the SLC).

I think everyone knows someone who's informed the SLC that their loan is no longer coming out of their pay packets yet no action is taken. I have a friend who has given up trying to remind the SLC to take the money out, as he's getting nowhere fast after contacting them five times. Graduates find themselves resigned to the fact that it's not going to come out, but that the sum actually INCREASES as interest is added to it

Plus, there's that nagging doubt at the back of your mind everytime you open your pay packet that it's going to be THIS month that they finally take it out or, even worse, you just forget about having a loan to repay, so when they do finally get round to claiming their pound of flesh (sorry, repayments) back from you, you're wholly financially unprepared.

After all, they're not exactly the lessons we should be teaching.

So, in age where we're imploring the powers that be to increase youngsters' exposure to a financial education, is it perhaps more prudent to get in place a more organised set of procedures amongst organisations such as the SLC? How are students supposed to learn if their attempts to repay a loan are met with, well, indifference?

Your Comments

I have a student loan following a 3 year degree course from 1998 to 2001. I began repayment in 2002 when my salary reached the threshhold and have been repaying it ever since. I have about another 2 years go go. I have found their admin to be shocking, the difficulty in ever finding out exactly what you owe really stressful and consequently will be glad to see the back of it.

However, it must be said that without the SLC I would not have been able to afford to attend uni and would not now be in the fortunate position of having a good job and salary. So its been a necessary evil for me.

My biggest gripe of all is that when you get an annual bonus they take an enormous chunk out of it, because they can. No other debtor, for example your mortgage provider has the power to do that. There is the plus point that you are enabling yourself to pay off the loan quicker in this way, but equally its very frustrating that you get a bonus for all your hard work and should be allowed to choose what you spend it on.

Good post.