The Student Loans Company has been accused of exaggerating debts - here’s how to find out exactly how much you owe

(Photo: Ben A. Pruchnie/Getty Images)(Photo: Ben A. Pruchnie/Getty Images)
(Photo: Ben A. Pruchnie/Getty Images)

Consumer rights and finance expert Martin Lewis has warned that The Student Loans Company (SLC) is exaggerating the status of outstanding loans in order to push users into making needless repayments.

The founder of said a revised version of the SLC's website places larger emphasis on outstanding loan figures, and encourages users towards quick repayment options which make no difference to the amount most people need to repay.

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“I will be writing to the Student Loans Company and the universities minister, Michelle Donelan, calling for the quick repayment facility to be removed immediately, and calling again for a thorough overhaul of this misleading new government website,” said Lewis.

"It is far too flippant a tool for such a substantial and risky transaction."

What's the problem?

The SLC’s new online student loan repayment system launched earlier this month after its move to the domain.

The first thing university leavers see when they log in, in large font, is the amount of debt they owe, which "makes many think they should overpay like a normal debt" according to Lewis.

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The expert labelled the change "demoralising, damaging and dangerous," and called for the figures to be presented with more context.

In England, student loan repayments are fixed at nine per cent of a graduate’s income above £26,575, with the remainder written off after 30 years for university students from 2012 onwards.

In layman's terms, that means students are only required to pay nine per cent of their earnings above the repayment threshold, regardless of the outstanding loan balance.

"Owing £30,000, £300,000 or £3m makes no difference to your annual repayments,” Lewis said.

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“The only impact the amount of debt has is whether you clear it or not within the 30 years before it is wiped.

“Unless you’re making huge overpayments... overpaying does diddly squat – you’ll still continue to repay nine per cent of everything over the threshold for 30 years. Overpaying is a total waste of money."

Lewis added the 'quick repayment’ system was "irresponsible and dangerous beyond belief" without detailed warnings, cautions and explanations.

What have SLC said?

David Wallace, SLC’s deputy chief executive, said the company had held two meetings with Lewis’s organisation ahead of the website revision, and that it was "providing the balances that the customers have asked for."

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"We were really disappointed at the reaction from Moneysavingexpert,” he added.

The company said it would contact users to remind them they are only required to pay nine per cent of their earnings above the repayment threshold “in the coming months".