Student Loans Company
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The Student Loans Company Limited is a non-departmental public body of the United Kingdom government, responsible for the provision of financial support to students attending university. The company offers loans to students at the rate of inflation - as measured by the Retail Prices Index - and administers repayment once the student has entered employment and is earning a salary in excess of a defined threshold, currently £15000.
Historically loans were collected directly from the student by direct debit (mortgage style loans), more recently Income Contingent Repayment (ICR) loans have been introduced. ICR loans are paid back via Her Majesty's Revenue and Customs who actually collect the repayments and send the details of the repayment collected back to the Student Loans Company. Borrowers outside the UK tax system repay directly to the Student Loans Company.
The Company was established in 1990 when it lent out £190 million to eligible students. Since then, changes in the provision of higher education have seen the phasing out of non repayable maintenance grants, and the charging of tuition fees. In the financial year 2004-05, the Company lent out £2,712 million, with total outstanding loans valued at £15,974.6 million at the end of that financial year. [1]
The Student Loans Company is based at Bothwell Street, Glasgow, Scotland, and also has offices at Hillington, Darlington and Colwyn Bay.
The UK Government sold off two tranches of debtor accounts in 1998 and 1999 to Finance for Higher Education (FFHE), a company formed by Greenwich NatWest, and Honours Student Loans Company a trading name of Honours Trustee Limited, a private limited company.
At the start of the 2009-2010 academic year, it was revealed that the company had too few workers to deal with a massive amount of loans, leading to a large amount of students not receiving any money at the start of their studies.[1] By November 2009, 3 out of 4 universities used thier own emergency funds to help students due to delays in the SLC paying out loans.[2] The Student Loans Company was criticised by the Million+ group of new universities with chief executive, Pam Tatlow saying the problems were "very disappointing" and added "The additional demand from students starting in 2009 can hardly be a surprise and the SLC should have staffed up to meet the expectations of both students and universities".[3] The president of the National Union of Students of the United Kingdom, Wes Streeting also wrote a letter to the company stating that "it is unacceptable that so many are having difficulties getting through to the helpline".[4]. After a request from the Liberal Democrats it was revealed that the company paid out almost £2 million in bonuses to its staff in 2009.[5]
[edit] Interest rates
| 1990/1991 | 1991/1992 | 1992/1993 | 1993/1994 | 1994/1995 | 1995/1996 | 1996/1997 | 1997/1998 | 1998/1999 | 1999/2000 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Interest rate | 9.8 | 5.8 | 3.9 | 1.2 | 2.3 | 3.5 | 2.7 | 2.6 | 3.5 | 2.1 |
| RPI (year ending the previous March) | 9.8 | 5.8 | 3.9 | 1.2 | 2.3 | 3.5 | 2.7 | 2.6 | 3.5 | 2.1 |
| 2000/2001 | 2001/2002 | 2002/2003 | 2003/2004 | 2004/2005 | 2005/2006 | 2006/2007 | 2007/2008 | 2008/2009 | 2009/2010 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Interest rate | 2.6 | 2.3 | 1.3 | 3.1 | 2.6 | 3.2 | 2.4 | 4.8 | 3.8 (Sep–Nov) 3.0 (Dec) 2.5 (Jan) 2.0 (Feb) 1.5 (Mar–Aug)† |
0†† |
| RPI (year ending the previous March) | 2.6 | 2.3 | 1.3 | 3.1 | 2.6 | 3.2 | 2.4 | 4.8 | 3.8 | -0.4 |
† On 4 December 2008 the Bank of England base rate was cut to 2%. The Student Loan interest rate can never be more than 1% above the Bank of England base rate, hence the Student Loan interest rate was cut to 3%. The rate was cut again by a further 0.5% in January, February and March
†† The government set an interest rate of 0% to avoid negative interest which would have been accrued if the Student Loan interest rate was set at the RPI figure of -0.4%
[edit] References
- ^ http://news.bbc.co.uk/1/hi/education/8247063.stm
- ^ http://news.bbc.co.uk/1/hi/education/8364790.stm
- ^ http://news.bbc.co.uk/1/hi/education/8254584.stm
- ^ http://www.nus.org.uk/en/News/News/NUS-demands-answers-over-loans/
- ^ http://www.guardian.co.uk/education/2009/nov/16/student-loans-company-bonuses
[edit] External links
- Student Loans Company Homepage
- Student Loans Company Repayment Portal Homepage
- Honours Student Loans
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