Things Of Interest Blog

Just skim this. I'll point out the important bits momentarily.

The very first thing that's wrong here is the telephone number at the very top of the first page. The number here is 0870 240 6298. But if you call it, you'll get a message saying that this number is no longer in use and instead you should call 0845 0738 891.

Delivering a statement with inaccurate contact information on it is terrible. In fact when I called the second number, the first thing I said to the advisor was that the number was wrong and he was quick to inform me that they were already aware of the problem, presumably because every single person who had called in that day had told him the same thing. This said, I decided to drop the subject since there was nothing I could tell him that he hadn't already heard, and moved on. But the thing is, I made that call two months ago. When my previous statement arrived. So, Student Finance England delivered a statement with the wrong phone number on it, and then two months elapsed during which almost every single caller to Student Finance England informed them that they had made this mistake, and Student Finance England ignored every single one of their callers, didn't correct the mistake, and sent out the same incorrect phone number a second time! Is that some sort of bad joke? Have both 0870 240 6298 and 0845 0738 891 been hijacked by some bizarre anarchist organisation masquerading as SFE in order to bring them into disrepute?

Point: The letter was sent in May 2010, but the period of time covered by the letter is 1 February 2009 to 5 April 2009. This is not a misprint. This account statement is over a year late.

Point: The letter lists the amount of interest accrued from 1 February 2009 to 31 March 2009. What about the interest accrued from 1 April 2009 to 5 April 2009? Was there none? How is this interest calculated?

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The way student loans work in the UK is this:

1. Let's say you've finished your degree and stopped borrowing money from SFE. Your loan is fully loaned and just accrues interest from now on.

2. At some point (say, in the financial year 2008-2009) you get a job. If the job pays more than the "earning threshold", then your employer is told by HMRC that you need to repay your loan. Based on your wage, not the amount you owe, your employer takes money out of every pay slip. This money goes to HMRC, not to SFE. SFE has no idea how much money you are paying back every month. This the prime Completely Stupid Thing about the UK system.

3. At the end of the financial year (last day of the financial year is 5 April 2009 in this case), HMRC counts up all the money that you have repaid them and tells SFE how much you repaid and when. This information doesn't arrive at SFE until months later (I assume May 2009 or June 2009?) but it is applied retroactively over the entire previous financial year i.e. all the way back to April 2008.

4. Once this calculation is completed, SFE should sends out a statement. So, in (charitably) July 2009, you get a statement telling you your status as of 5 April 2009. The statement is at most a few months out of date. This is your annual statement and the last one until 2010.

So, another point: Why does the tax year 2007-2008 get mentioned in this statement? The figure is 0.00, as I know-- that was settled months ago. Why does the tax year 2008-2009 get mentioned (for the first time) in this statement? I should have been told that particular calculation back in July 2009 or so. And why doesn't the tax year 2009-2010 get mentioned in this statement? Why would the SFE send me a statement until they know the result for that? The answer: they're years behind on their backlog and running to catch up.

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The worst part of this system is that it is basically impossible to clear your debt. It is impossible to know at any given moment in time exactly how much money you owe, because the amount you owe at that moment will not be known for certain until it is calculated retroactively, anything up to 14 months later. During those 14 months, HMRC will have been continuously taking more money out of your pay slip-- money which you will have to claim back later. The only thing to do is take an educated guess, pay off the minimum amount of money you can (without going under) and then brave the process of claiming your overpayment back.

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