Hi,
If someone pays off her student loan in one lump sum, how long is it likely to take for her employer to be told by HMRC to stop deducting SL repayments from monthly salary?
In other words, how many months-worth of repayments should *not* be paid off?
(Obviously, paying-off is not sensible during the zero-interest period.)
Many thanks.
I don't think anybody knows. This is another example of things not being thought through when the system was set up.
There must surely be a method in place whereby employers are told to stop collecting when the debt has been paid otherwise everyone will be over paying?
Is the answer therefore to pay off it all save for the last three or four months worth of payments and then the system that already exists will notice the debt is complete and will send a cancel request. The fact you have paid a lump sum would then be neither here nor there.
I assume "the system" would only trigger a "stop deductions" notice once the loan was fully repaid. I can't imagine it predicting that moment - even if payments didn't vary.
However, since posting, I have found this (apologies if link wraps) ....
Thanks again for the replies.
The Student Loan Company don't even know what repayments they have received until they receive their copy of the details HMRC get from the end of year payroll returns. It generally takes HMRC until about August to process these, then they can pass them to SLC and SLC can do their processing.
I would suggest that anyone who has a Student Loan keeps very careful records of what they have paid, and how much interest should have been charged on the remaining about, because the way the system is set up, the Student Loan Company has no more than a random chance of getting this right.
Hope it all works out for you!
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