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The student loans system is in for some changes after it emerged that many graduates are overpaying on their loans because of a hitch in the repayment system.

Currently, graduates pay 9% of all money they earn each year over a £15,000 threshold. Once they have paid back all many owed, they should, in principle, not have to make any further repayments.

However, because of the way the system works, with HM Revenue and Customs passing on outstanding money to the Student Loans Company (SLC), unless SLC notify the tax office that a debt has been repaid, graduates often find that they are paying hundreds or, sometimes, thousands of pounds more than is necessary.

Although graduates are able to claim back overpayments from the SLC, this often a long and tedious process.

Once former student comments on just how frustrating it can be. He says, “I was overpaying for the whole of last year and they owed me more than £1,000. I went through the hassle of sending them all my payslips and lots of other details. And I waited. And waited. I ended up chasing them.

“I got my money, but then this month I saw another £187 had been taken. I am so frustrated and now have to go through the process again.”

An SLC spokesperson comments, “We are aware that when people come to the end of their loans, there is often a very confusing period.

“We appreciate that trying to reclaim overpayments can be very frustrating and this is why we are endeavouring to make changes to make it easier.”

Now, it seems, the SLC is finally responding to the concerns of graduates by introducing a direct debit system of repayment for those who are approaching the end of their debt.