Repayments

Student Loans Company

www.slc.co.uk

Presenter: Fiona Innes & Pauline De Pellette

Department: ICR & Customer Repayment Support

Date: 25 - 27 March 2015

Presenter: Fiona Innes

Department: ICR

Date: 25 - 27 March 2015

Repayments

Income Contingent Loans

This presentation will provide some information on the process involved in

collecting repayments from customers who are earning over the thresholds set.

We will cover the types of repayers, the thresholds currently in place and what

happens when customers do not make the required repayments.

1. Loan Conditions 2. SLC Repayment Partners 3. PAYE 4. Self Assessments 5. Overseas 6. Plan 1 & Plan 2 Customers 7. Prevent Over Repayments 8. Key Repayment Statistics 9. Questions?

Content

Content

• The Customer must sign up to the terms and conditions when they

apply for Student Finance. This is a Declaration and not a credit

agreement.

• A valid National Insurance number must be provided at the point of

application.

• ICR loans are classed as low cost loans and are governed by

Regulations.

REPAYMENT – Loan Conditions

DWP

• Validates National Insurance Numbers (NINO)

• Provides Nino where one is not provided on the application

HMRC

• Match customer records to employment data

• Issue START / STOP Notifications to employer

• Sends repayment information to SLC annually

EMPLOYERS

• Take deductions from employee salary at source

• Send repayment information to HMRC annually

REPAYMENT – Our Repayment Partners

Repayment will begin in the April after graduation or withdrawal if the customers

income is over the repayment threshold. Repayments are 9% of the income

above the repayment threshold.

Step 1 – Repayments are taken from the customers salary.

Step 2 – Employers pass repayments to HMRC at the end of

each Tax Year.

REPAYMENT – PAYE

Step 3 – HMRC tells SLC how much has been repaid.

Step 4 – SLC calculates the balance up to the end of the tax

year and divides the total amount repaid in the

year into 12 equal monthly repayments & calculates

the interest.

REPAYMENT – PAYE

Step 5 – SLC issue annual statement

The statement details how much has been paid for the previous tax year, how

much interest has been added & the total outstanding balance.

REPAYMENT – PAYE

Step 1 – The customer indicates on their self-assessment

tax return if they have a student loan.

Step 2 – Tax bill paid directly to HMRC.

REPAYMENT – Self Assessment

Step 3 – HMRC tells SLC how much has been repaid

Step 4 – SLC calculate the balance up to the end of the tax year

The SA repayment is applied @ 31st January following

the tax year to which the return applies. The value is

Deducted from the loan balance as single lump sum.

REPAYMENT – Self Assessment

Step 5 – SLC issue annual statement

The statement details how much has been paid for the previous tax year, how

much interest has been added & the total outstanding balance.

REPAYMENT – Self Assessment

• Customers are obliged to notify SLC if they are going overseas for >3

months.

• Evidence of their circumstances and income must be provided and must

be updated annually whilst the customer remains overseas.

• Monthly repayments are based on the income and repayment threshold

for the destination country.

• The threshold is variable in each country and reflects the equivalent

standard of living as UK.

REPAYMENT – Overseas

Banding Repayment

Threshold

Fixed

Repayment

Instalment

Example Country

A £3,385 £49.00 Jamaica

B £6,770 £98.00 Albania

C £10,150 £147.00 Kenya

D £13,535 £196.00 Spain

E £16,910 £246.00 Italy

F £20,290 £295.00 Sweden

G £23,675 £344.00 Switzerland

REPAYMENT – Overseas Repayment Thresholds &

Fixed Repayment Instalments

If a customer is earning over the threshold for the country they are resident in they will be required to repay

their loan directly to SLC. Customers can do this by;

• Direct Debit from a UK bank account. A customer can set up a Direct Debit by logging into their online

account.

• Debit or credit card - SLC’s Repayment Portal will accept payments from overseas cards. Payments

can be made using Maestro, Switch, Delta, Visa, and Mastercard. If a 3rd party wants to make a

payment towards a customers loan they can use the Make a Payment service without the need to

login to the customers online account.

• Standing Orders from a UK bank account. A standing Order form can be downloaded from SLC ‘s

Repayment website.

• Payment by International Bank Transfer (IBAN) - The customer will need to contact their bank to

arrange this type of payment and they may be charge for this service. If they are making a repayment

from outside of the EEA, then SLC’s bank (Barclays) will charge a processing fee of £6. Guidance on

how to set this up is available on SLC’s Repayments website:

Repaying your loan whilst Overseas

• Where a customer does not provide evidence of circumstances and income, a

default scheduled repayment amount will be created on their account . Customers

are obliged to repay this until they have supplied the requested information.

• Where a customer fails to repay their scheduled or default scheduled repayment

amount, the account will go into arrears.

• SLC will actively pursue customers overseas who are in arrears for repayment of their

loan.

• SLC’s Customer Repayment Support department will contact the Customer through a

series of letters, emails and outbound telephone contact.

• Customers who wish to have a 3rd part deal with their account in their absence

should arrange for Consent to Share (CTS) to be set up. They can do this over the

phone or complete a CTS form and send this to SLC.

Recovery Methods will be discussed later in the presentation as part of the recovery

of overpaid grants.

NON REPAYMENT – Overseas

£16,910 Threshold

England & Wales prior to 12/13

Scotland & NI

Interest

Write Off Period

Write-off loans after 25 years

Interest applied at flat rate of RPI

Repayments remain at 9% of earnings over threshold in all cases

£21k threshold

Interest rate RPI+3% when in study Interest rate RPI+ up 3% (depending on income)

Repayment Thresholds

Write-off loans after 30 years

England & Wales post 12/13

PLAN 1 PLAN 2

• SLC pro-actively identify customers in the final 23 months of repayment.

• Letters are issued to all customers who meet this criteria offering them the

option to opt out of PAYE and onto a Direct Debit.

• Customers who do not opt into the DD scheme may over repay their loan.

REPAYMENT – Prevent Over Repayment

• 300k customers commence repayment annually.

• 3.3m customers in repayment @ FEB 2015

• £1.5bn collected via PAYE for Tax Year 13/14 @ June

2014 (£1.2b 10/11, £1.3b 11/12 £1.4b 12/13)

• 109.3k (87.5k UK & 21.8K EU ) ICR customers resident

Overseas @ Feb 2015

• 25.7K customers in arrears (73% UK 27% EU)

• £18.1M recovered from overseas customers in arrears @

Feb 2015

REPAYMENT - Key Statistics

Questions

?

Presenter: Pauline de Pellette

Department: Customer Repayment Support

Date: 25 - 27 March 2015

Repayments Grant Overpayments

1. Grant Overpayments

2. Classifying Grant Overpayment

3. Recalculation of Entitlement

4. End & After End of Course

5. Recovery Methods

6. Grant Overpayment Statistics

7. Useful Reference Points

8. Questions?

Content

This presentation will provide information on the grant overpayment process. We

will cover circumstances which can result in an overpayment and the different

recovery processes. We will also cover the recovery methods employed when

recovering an overpaid grant directly.

Grant Overpayments occur for the following reasons:

• Withdrawal from the course either during a students course of study or in their final year,

where it has been identified that a student has not been entitled to the amount of grant

that they have been paid.

• Change of circumstance (COC)

- Where a Sponsors estimated income differs from evidence received or no

evidence received.

- Where the estimated Child Care costs differs from evidence received or no

evidence received when requested.

- Where the grant awarded is for full time study and part time study attended.

- Assessment error.

REPAYMENT - Grant Overpayment

Circumstances Recovery What will happen

COC reported during the

Academic Year (AY)– further

Grant instalments scheduled

In Course Dealt with by the Awarding Authority i.e. Student Finance England

If reported during the Academic Year (AY) – further Grant instalments for

that AY will be reduced to offset overpayment.

Revised Payment Schedule letter generated by Awarding Authority

COC reported during the

Academic Year – NO further

instalments scheduled for that

AY

In Course Dealt with by the Awarding Authority

Deductions will be taken from any following year’s entitlement.

An “in Course” recovery letter is generated by the Awarding Authority to

advise overpayment will be deducted from following year’s entitlement.

COC reported in the customers

final year – however, no

remaining instalments left to re-

schedule

End of

Course

Dealt with by Student Loans Company (SLC) Customer Repayment

Support department

An “End of Course” letter is generated by SLC advising that the

overpayment is due to be repaid at the end of their course.

Withdrawal reported either

during the course of study or in

final year.

After End of

Course

Dealt with by SLC Customer Repayment Support department

An “After End of Course” letter is generated by SLC advising that the

overpayment is due to be repaid immediately.

REPAYMENT – Classifying Grant Overpayment

This is an example of recovery from future funding within the same year, as some Students can

find the recalculation of their entitlement confusing;

• Initial award of £3000 is scheduled to be paid over 3 instalments of £1000

• Customer reassessed and entitlement reduced to £2000.

• System recalculates the 3 instalments amounts by dividing the £2000 by 3, rescheduling

them as 1x £667, 1 x £667 and 1 x £666.

• Two instalment have already been received for £1000, meaning the customer has been

overpaid for each instalment by £333, a total overpayment of £666

• The next instalment which has now been rescheduled as £666 is not released to off set the

overpayment of 2 x £333.

• If the overpayment exceeds the final scheduled repayment amount and is not recovered

within the current academic year, it would be recovered from any future year(s) award(s)

REPAYMENT – Recalculation of Entitlement

A Student who has an overpayment of grant whilst “In Course” should:

• Be aware of the impact an overpayment may have on their current and future entitlement

whilst they remain in study.

• Contact their Awarding Authority immediately if they wish to dispute the overpayment.

• Return any requested evidence as soon as possible.

A Student who has an overpayment of grant due to withdrawal or after they graduate should:

• Contact SLC as soon as possible to agree a repayment arrangement.

REPAYMENT - Grant Overpayment

• Where SLC have received notification that the customer has withdrawn or reached the end of

their course (graduation date) the customer will be obliged to repay any outstanding

overpayment directly back to SLC.

• SLC’s Repayment Support department will contact the Customer through a series of letters and

outbound telephone contact.

• If the customer agrees to a payment arrangement, this will be monitored and if the customer

fails to maintain this, they will be contacted further.

• SLC will use Debt Recovery Agencies to trace customers who have failed to keep their contact

information up to date.

• If a customer fails to contact SLC, come to or maintain a reasonable payment arrangement,

SLC will consider further action. Further action may be to send the Customers account to a

Debt Recovery Agency or start legal proceedings.

REPAYMENT – End and After End of Course

• SLC’s Repayment Support Agents are trained in line with the Financial Conduct

Authorities principals of Treating Customers Fairly.

• Repayment arrangements are based on an individuals personal circumstances and

financial situation.

• SLC Repayment Support Agents will direct customers to the Free Debt Advisory

services if necessary.

• SLC have a dedicated team to assist vulnerable customers.

• SLC employ 3rd party Debt Recovery Agencies as part of the recovery strategy. Their

services are employed where all internal efforts at recovery have been unsuccessful.

• Direct Repayments can be made via Direct Debit, Standing Order, Card Payment,

Cheque, Postal Order.

REPAYMENT - Collections Methods

• Average overpayment of grant amount is £1.6K

• 116K Grant Overpayment Customers

• £19.2m collected Feb 2015

• £1.9m collected by Debt Collection Agencies

REPAYMENT – Grant Overpayment Statistics

Useful information on repayment can be found on:

studentloanrepayment.co.uk

GOV.UK

Key facts and figures on repayment can be found on:

slc.co.uk/statistics

REPAYMENT

Questions

?

Fiona Innes & Pauline De Pellette

Repayments & Fraud Directorate

fiona_innes@slc.co.uk

pauline_depellette@slc.co.uk

www.slc.co.uk