UK Student Loans Company pays out £72K compensation

Scandal-hit organisation makes payments to hundreds of students and graduates affected by its errors

October 10, 2018
Students protest outside the Department for Business and Skills against the sell-off of student loans
Source: Alamy

Hundreds of people who suffered financial hardship and inconvenience as a result of errors by the UK’s Student Loans Company have been awarded compensation worth more than £70,000 over the past two years, figures reveal.

Latest accounts show that 146 individuals were recommended for ex gratia payments totalling £34,025 following mistakes by the government-owned organisation in 2017-18, in a year in which it processed 1.8 million applications and managed about 8 million customers.

In 2016-17, independent assessors also recommended that the SLC pay compensation of £38,087 to 135 individuals to recognise “real hardship” caused by its errors.

In many cases, compensation was paid after call handlers mistakenly advised callers that funding would be available, causing them to make commitments to courses for which they subsequently did not receive financial assistance, assessors say.

In other cases, graduates faced financial loss after salary deductions were restarted years after the loans had apparently been paid off.

The compensation comes amid anger at overcharging by the SLC in recent years that resulted in tens of thousands of graduates paying back £51 million more than necessary.

In a statement, the SLC said that its “delegated authority from Department for Education allows us to make ex gratia payments as compensation to customers where we have caused delays and problems”.

“Occasionally something goes wrong and we aim to put matters right and learn the lessons when that happens,” it added, saying that its “satisfaction levels are increasing and complaints are decreasing as a proportion of the customer base”, with just 1.58 complaints per 1,000 customers.

The payments were made during a tumultuous period for the not-for-profit body, whose chief executive Steve Lamey was sacked for gross misconduct in November 2017 after whistleblowers made 69 allegations of wrongdoing. In May, a National Audit Office report found that he had been hired against officials’ advice and that his references had not been checked.

After Mr Lamey’s departure, the SLC, which has an annual budget of £148 million, was led by two acting chief executives before Paula Sussex, a former Charity Commission head, joined as chief executive last month.

Complaints rose during the 18-month period in which Mr Lamey led the organisation, with 191 complaints, mostly about loan processing, made in 2017-18 compared with 103 complaints in 2014‑15.

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