Cabbie hails student loan victory

March 25, 2005

A graduate cabbie has been awarded £2,000 compensation after the Student Loans Company misdirected him on how low he had to keep his earnings to avoid repaying his loan.

For several years, self-employed Finbarr Ward deliberately kept his salary below the earnings threshold that would have triggered repayments on the Pounds 10,000 he owed to the SLC.

But the SLC's independent complaints assessor has found that he could have earned more without having to repay his loan.

The assessor rules in a report on Mr Ward's case that he was given "incorrect" and "misleading" advice on how the business expenses of self-employed graduates are calculated against the re-payment threshold.

The report says that Mr Ward "could have earned more - and still been under the threshold - had he not been given incorrect advice about the treatment of business expenses".

As well as ordering £2,000 compensation, the assessor recommends that the SLC's "senior managers assure themselves that all appropriate staff understand the treatment of business expenses of self-employed applicants for deferment".

Mr Ward told The Times Higher : "The SLC was arrogant all the way. It has taken four years, but I've struck a blow for all self-employed people. I'm a taxi driver, but this should help anyone who is self-employed, people with seasonal jobs, hamburger salesman - anyone."

Mr Ward, 48, who is dyslexic, graduated in July 2000 with a third-class honours law degree after seven years of study at London South Bank University.

He successfully deferred his loan repayments for each of the five years since his graduation.

The deferment threshold at the time was set at 85 per cent of the gross national average salary - £21,024 in 2002-03, or £1,752 a month.

Mr Ward argued that after he had taken his legitimate business expenses from a gross salary at the threshold - including his cab hire and diesel costs, as well as income tax - loan repayments of £150 a month would "bring me into poverty".

After lengthy correspondence, Mr Ward made a formal complaint in December 2003, arguing that he had never been given a definitive answer with regard to the rules on gross income. His complaint was rejected and he was denied compensation.

In his formal adjudication, the SLC's assessor said: "It was clear to me that a period in excess of two and a half years elapsed before Mr Ward was furnished with the correct response to the concern he first raised in December 2000."

A spokesman for the SLC said: "The Student Loans Company recognised that the independent assessor had made a recommendation in this particular case and complied with that recommendation.

"Typically, fewer than ten cases are referred to the assessor in any one year, from a customer base of over 3 million."

phil.baty@thes.co.uk

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