I have a student loan (Plan 1) with the Student Loans Company in the UK. I've been living overseas for several years and making income contingent repayments, based on an annual income assessment.
Typically, each August they send me a form to complete and return along with evidence of my income. In September they write back, confirming whatever amount they've decided I owe each month based on my earnings. Sometimes they'll make an adjustment in March if changes to the UK RPI affect my interest rate, but other than that, there is usually no further correspondence until August the next year.
Last year they didn't send me an assessment form when they usually do (all of their outbound correspondence is logged on their website, I can see when they've written and download scanned copies of the letters when I'm logged into my account), the only mail I received from them in 2016 was confirmation of setting up automatic payments.
If they had sent me an assessment pack, the information I would have returned at the time would have indicated a modest increase in pay from the previous year (about 5%).
Despite the gap in communication, in March 2017 they wrote:
We previously told you that we would send you a new overseas schedule when we knew what your repayments would be for the full assessment period. We can now confirm this. Your monthly repayment will be: £XXX
The amount they "confirmed" was the same as what I'd been paying the previous year and covered the period October 2016 to September 2017. I figured the correct amount based on my slightly higher income should be slightly more, not worth contacting them about.
This year I got a new job with a hefty pay increase. They did send an income assessment form, and they've increased my monthly repayment amount commensurate with my new salary. The new monthly payment amount is fine, I was expecting it, but...
They've also added an arrears balance of £2000.
When I contacted them about this, they wrote back:
With your overseas assessment form arriving previously we have had to amend your back dated standard monthly repayment amount to the correct figure and this has caused an increase and an arrears balance to be paid based on your earnings provided.
Your last assessment ended on 30/09/2016 and we didn't receive a new one.
They're right that they didn't receive a new assessment pack, but despite this they "confirmed" a monthly payment amount for the whole 12 month period, and I paid all of those dues in full. And if they had received an assessment pack at the right time, they would have calculated dues based on a much smaller salary than my current one. They appear to be assuming that I've been making my current salary for much longer than I really have. This seems at best incompetent and at worse shady.
I could dip into savings to pay this, but I really don't think I owe them for this error. The interest on the loan is 1.25% at the moment, and I earn 1.20% interest in my savings account, so this isn't so much a question of what is the most cost effective solution, but rather what is the appropriate thing to do?
- Stand my ground and refuse to pay any of it?
- Go find my old paystubs and get them to recalculate the correct arrears amount? (ugh)
- Just pay the whole thing?
- Something else?