SLC pays out £200m too much in grants

FoI request finds that £132m is still outstanding despite a fall in total overpayments

February 12, 2015

Source: Kobal

Taking notes: data show that 50,000 students a year are receiving more from the SLC than they are entitled to

The Student Loans Company has overpaid more than £200 million of student grants in the past three years, according to figures seen by Times Higher Education.

The data, obtained under the Freedom of Information Act, show a steady rise in the number of grant overpayments since major changes to student funding were introduced with the Higher Education Act 2004.

According to the SLC, more than £132 million of the £210 million overpaid from 2011-12 to 2013-14 is still outstanding despite its having a “robust system to pursue all borrowers for repayment of overpaid grants”.

Since 2010, about 50,000 students a year have received more in grants than they were entitled to, according to data supplied for England, Wales and Northern Ireland.

Grant overpayments peaked in 2012-13 when the total amount leaped by more than £10 million on the previous year. In that period, almost £75 million was overpaid in England alone.

Although the total amount overpaid dropped in the past academic year for the first time since 2003-04, more than £60 million was overpaid in the three parts of the UK.

The figures have been criticised by Labour’s shadow universities, science and skills minister, Liam Byrne. “These overpayments are a serious issue, and I will be putting down parliamentary questions to get to the bottom of the matter,” he said.

The problem of grant overpayments was raised in April 2014 by the previous universities and science minister, David Willetts, in the SLC’s Annual Performance and Resource Agreement Letter FY 2014-15. At the time, Mr Willetts said that “work will need to continue on reducing and recovering outstanding overpayments of student support”.

When contacted, the SLC declined to comment on whether or not it was concerned about the size of the figure, but it did say that it was under a legal obligation to pursue any overpayments that occur.

In seeking to recoup its money, the organisation can deduct the amount owed from future grants or, if a student is no longer at university, it can seek a repayment. A spokesman said that in the latter case, “customers can arrange an affordable repayment schedule based on their financial circumstances”.

About half those affected made repayments directly rather than from future deductions.

The overpayments can be the result of a variety of issues, including changes of circumstance, students dropping out of university, bureaucratic errors or fraudulent claims and miscalculations of household incomes. According to the SLC, no record is kept of how much each factor contributes to the overall tally of overpayments.

Despite the large number of overpaid grants, the SLC said that it did not collate data on similar issues such as the inaccurate payment of student loans or underpayment of grants.

Several grants are available to students to assist with living and other costs. Most common is the maintenance grant, for students whose family have a household income of less than £42,000. Special grants are also available for disabled students and those with child or adult dependants.

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