2
Mar
Student loan repayments
HMRC have announced a new initiative to reduce student loan over
repayments for those ex students who repay their loan through PAYE
deductions.
Ex students have been in the position whereby it has been
difficult for them to avoid over repaying their student loan as the
loan term came to an end. This is due to the time delay between
their employer making deductions from their salary each month and
submitting an annual return showing the individual repayment
amounts for each employee.
Ex students will now be able to opt out of PAYE repayments in
the last 23 months of repayment and transfer to a Direct Debit
arrangement. This should mean that the ex student will not over
repay their loan.
This new initiative has been introduced by the Student Loans
Company (SLC). The SLC will try to contact borrowers shortly before
the last 23 months to offer and arrange this option. However if a
borrower is aware that they are reaching this point they can
contact the SLC direct and arrange to repay the balance of their
loan in this way.
Employers will not have to change their procedures as their
authority to stop making deductions comes from HMRC on a form SL2
Stop Notice and this authority will be issued in the normal
way.
Internet links: HMRC student loan
advice SLC repayment
website
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