Student loans and grants in the United Kingdom

In the years following World War II, most local education authorities (LEAs) paid students' tuition fees and also provided a maintenance grant to help with living costs; this did not have to be repaid.

The Education Act 1962 made it a legal obligation for all LEAs to give full-time university students a maintenance grant.

The increase was brought in under the Labour Government of Tony Blair[3] In 2010 the SLC employed 1,894 people in the two Glasgow offices and at sites in Darlington and Colwyn Bay, Wales.

In 2012 an investigation by Exaro News revealed that the SLC was paying Lester through a private company enabling him to reduce his tax bill by tens of thousands of pounds.

[12][13] The day after the story broke the Chief Secretary of the Treasury, Danny Alexander was summoned to the House of Commons for an urgent debate.

All eligible UK-domiciled students are also entitled to a maintenance loan, which is designed to help pay for living costs whilst at university.

Maintenance loans were increased by forecast RPIX of 2.8% to a maximum of £8,430 (for students living away from home, outside London) in academic year 2017/18.

[28] Loans taken out for courses beginning after 1 September 2012 (which are much larger due to the increase in tuition fees) will be repaid under a new 'Plan 2' variant of the ICR scheme.

The repayment threshold for Plan 2 loans was increased from £21,000 to £25,000 for tax year 2018/19, and annually with average earnings thereafter, despite a previous intention to freeze it at £21,000 until at least April 2021.

[45][46] If a recipient of a loan does not return an Overseas Income Assessment Form, a default monthly repayment amount, which also varies by country, will be applied.

[16] The proposed repayment terms and eligibility criteria were put out to consultation in March 2015 and the outcome was published at Autumn Statement 2015 (25 November 2015).

of the maximum postgraduate master’s degree loan the student is able to acquire in respect of that academic year by taking reasonable steps to do so.'

All lenders are legally required to provide you with a statement of the "APR (Annual Percentage Rate)" for the loan before you sign a promissory note and commit to it.

[58] Responding to the report, the leader of the UCU lecturers' union, Sally Hunt, said it had been "a total fiasco from start to finish" with failures that "beggar belief".

[58] Liberal Democrat university spokesman Stephen Williams branded the report "truly damning, revealing a breathtaking level of incompetence within the Student Loans Company.

"[58] As a result of the report, the heads of customer services and information and communication technology at the SLC resigned, and the senior management team was restructured.

[60] In January 2012, a BBC Newsnight and Exaro investigation revealed that Ed Lester, the head of the SLC, was being paid his salary via a private firm, allowing him to reduce his payment of income tax and national insurance contributions.

The issue is that although repayments are processed by the SLC, under a specialist department headed by Kevin O'Connor, they are actually collected by HMRC.

However, long delays in this process have been noticed - and in addition, the SLC have on occasion neglected to inform HMRC to stop taking payments, so a further year of repayments even when the loan has been acknowledged as cleared is not unusual.

[65] In 2009, a new direct debit system was introduced to try and address this problem for graduates who were estimated to have fewer than two years' repayments left to make.

[66] However, poor administration has bedevilled this system from the start, and inadequate record-keeping means the SLC have great difficulty identifying how much is owed by individuals, meaning that occasionally they either miss the time when repayments should be switched to the direct debit system, or worse, send demand notices to graduates who have already paid off their loan.

[67] The transfer of information and even money between HMRC and the SLC has also been beset with difficulties, again apparently due to poor record keeping and the decision to process all repayments at once.

[68] Graduates are advised by Student Finance England to check all paperwork and ensure that the repayments are going in according to schedule, and not be afraid to complain or otherwise draw the SLC's attention to the matter should they make a mistake.

Borrowers are asked to update SLC on their overseas income, so that they can be charged the correct amount; those who do not return this information are assigned a flat fee.

[70] Payment is normally collected by asking the borrower to set up a direct debit,[71] but many overseas do not maintain contact with SLC, or simply decline to pay.

The contract for the group describes expected activities including "inbound and outbound telephony, letters, emails and SMS.

[80][81] People overseas have reported receiving large penalties for minor clerical errors when dealing with Transcom and the SLC.

[83] The SLC has stated in the past that it will "actively trace those in arrears and will obtain court orders in other jurisdictions",[84] but there has never been a large scale program of overseas legal action.

However this does not solve the problem where Employers did not report to HMRC the customer's income for previous years which in some cases required SLC and the customer to work with HMRC to locate and allocate the repayments made by the Employer as SLC is limited to and can only work from the information it is provided as they don't have any involvement with the payroll process.

A freedom of information request obtained by the BBC in 2024 revealed that the level of debt actually accrued by students was extremely high; and far outpaced estimates from the introduction of £9,000 fees in 2012.