The universities minister has been urged to intervene following claims the Student Loans Company is giving graduates a “demoralising, damaging and dangerous” picture of their debts.
Martin Lewis, the consumer affairs journalist, has accused the company of urging graduates to make payments they don’t have to make.
Mr Lewis, the founder of Money-SavingExpert.com website, criticised the SLC’s new repayments website.
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The site highlights an overall balance from the loans taken out as students.
But Mr Lewis said it failed to point out that the size of the debt made no difference to the amount graduates had to pay, which is linked to income.
Estimates suggest many people will never have to pay back the full balance of their debt, he added.
Repayments are currently set at 9% of a graduate’s income above £26,575. Any remaining debt not paid off after 30 years is written off.
Mr Lewis called on the SLC and the universities minister, Michelle Donelan to remove the company’s “ quick repayment facility” on the website.
He added: “It is far too flippant a tool for such a substantial and risky transaction”.
He said he was “calling again for a thorough overhaul of this misleading new government website”.
He told the Guardian: “The first thing university leavers see when they log in, in a large font, is the amount of ‘debt’ they owe. This is demoralising, damaging and dangerous. Owing £30,000, £300,000 or £3m makes no difference to your annual repayments.”
“The only impact the amount of debt has is whether you clear it or not within the 30 years before it is wiped. And it’s predicted the vast majority – 83% – of university leavers won’t earn enough that their repayments clear it in full. They’ll keep repaying for the whole 30 years, like an additional tax – so the amount of debt for them is pretty irrelevant.”
He said the site “makes many think they should overpay like a normal debt… Yet unless you’re making huge overpayments, for most people overpaying does diddly-squat – you’ll still continue to repay 9% of everything over the threshold for 30 years. Overpaying is a total waste of money. “
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David Wallace, the SLC’s deputy chief executive, said the new online service had been created after extensive consultation with users, who asked for more up-to-date information about their outstanding balance.
He said: “We think we’ve done a really good job here for customers, the feedback we’ve had was good. So we were really disappointed at the reaction from MoneySavingExpert.”
The SLC said the service made clear graduates should consider their circumstances before making voluntary repayments.
The SLC also said that in “the coming months” it plans to contact users to remind them they only have to pay 9% of their earnings above the threshold, regardless of their outstanding balance.
1/50 19 July 2020
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2/50 18 July 2020
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24/50 26 June 2020
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28/50 22 June 2020
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29/50 21 June 2020
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35/50 15 June 2020
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38/50 12 June 2020
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50/50 31 May 2020
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1/50 19 July 2020
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2/50 18 July 2020
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6/50 14 July 2020
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7/50 13 July 2020
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9/50 11 July 2020
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10/50 10 July 2020
People gather for the funeral of Dame Vera Lynn in Ditchling, England. During World War II she travelled to the frontlines, including Burma, entertaining British troops and boosting morale. She died on 18 June at her home in West Sussex
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12/50 8 July 2020
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AFP via Getty
13/50 7 July 2020
A circus performer from the Association of Circus Proprietors in Whitehall, London. The association handed a petition to Downing Street to ask Prime Minister Boris Johnson to allow circuses to reopen
EPA
14/50 6 July 2020
Bamburgh Castle in Northumberland, which re-opened to the public after being closed due to the coronavirus lockdown
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People visit Columbia Road Flower Market, London, as it reopens following the easing of coronavirus lockdown restrictions across England
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16/50 4 July 2020
A member of bar staff wearing PPE in the form of a face mask, pours drinks inside the The Goldengrove in Stratford
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Cardboard cutouts of fans in the stands prior to the League One play-off semi final match between Portsmouth and Oxford United at Fratton Park
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18/50 2 July 2020
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PA
19/50 1 July 2020
Slackliner Sandor Nagy practices on the beach in Boscombe, on the south coast of England
AFP via Getty
20/50 30 June 2020
(left to right) Sinn Fein leader Mary Lou McDonald, former Sinn Fein leader Gerry Adams, and Deputy First Minister Michelle O’Neill attending the funeral of senior Irish Republican and former leading IRA figure Bobby Storey in west Belfast
PA
21/50 29 June 2020
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24/50 26 June 2020
Police at the scene of an incident at the Park Inn Hotel in central Glasgow. Scottish police said armed officers shot dead a man after a suspected stabbing in the city centre left six others injured, including one of their colleagues. Several roads were closed and the surrounding area was cordoned off
AFP via Getty
25/50 25 June 2020
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26/50 24 June 2020
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27/50 23 June 2020
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28/50 22 June 2020
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PA
29/50 21 June 2020
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Action Images via Reuters
30/50 20 June 2020
Arsenal’s midfielder Nicolas Pepe kneels before the Premier League match against Brighton and Hove Albion at the American Express Community Stadium in southern England
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31/50 19 June 2020
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32/50 18 June 2020
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33/50 17 June 2020
Players kneel, as well as, having ‘Black Lives Matter’ in place of names on their shirts prior to the start of the Premier League match between Aston Villa and Sheffield United at Villa Park in Birmingham. The league resumed after its three-month suspension because of coronavirus
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34/50 16 June 2020
Motakhayyel ridden by Jim Crowley, right, wins the Buckingham Palace Handicap during day one of Royal Ascot. This year, the flat racing’s biggest meeting, is behind closed doors due to the coronavirus outbreak
PA
35/50 15 June 2020
Queues form at Primark at the Rushden Lakes shopping complex after the government relaxed coronavirus lockdown laws significantly, allowing zoos, safari parks and non-essential shops to open to visitors
Getty
36/50 14 June 2020
A man kneels at a commemoration to mark the third anniversary of the Grenfell Tower fire in London. The fire claimed 72 lives on 14 June 2017
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37/50 13 June 2020
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38/50 12 June 2020
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Getty
39/50 11 June 2020
Scouts show their support at the Lord Baden-Powell statue in Poole. The statue of Robert Baden-Powell on Poole Quay is to be placed in “safe storage” following concerns about his racial views
Getty
40/50 10 June 2020
Social distancing markers around the penguin enclosure at London Zoo. Staff have been preparing and are now ready for reopening next week with new signage, one-way trails for visitors to follow, and extra handwashing and sanitiser stations in place
PA
41/50 9 June 2020
Protestors hold placards and shout slogans during during a protest called by the Rhodes Must Fall campaign calling for the removal of the statue of British imperialist Cecil John Rhodes outside Oriel College, at the University of Oxford
AFP via Getty
42/50 8 June 2020
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PA
43/50 7 June 2020
The Edward Colston statue has been pulled down by Black Lives Matter protesters in Bristol. Colston was a 17th century slave trader who has numerous landmarks named after him in Bristol
SWNS
44/50 6 June 2020
Children pose for their family in front of discarded placards fixed on a wall in Piccadilly Gardens after a Black Lives Matter demonstrations in Manchester. The death of an African-American man, George Floyd, while in the custody of Minneapolis police has sparked protests across the United States, as well as demonstrations of solidarity in many countries around the world
Getty
45/50 5 June 2020
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Getty
46/50 4 June 2020
Protestors march from Windsor Castle in solidarity with the Black Lives Matter movement
Getty
47/50 3 June 2020
People wearing face masks hold banners in Hyde Park during a Black Lives Matter protest following the death of George Floyd who died in police custody in Minneapolis
Reuters
48/50 2 June 2020
Street artist Nath Murdoch touches up his anti-racism mural in Peterborough, Cambridgeshire
PA
49/50 1 June 2020
Customers socially distance themselves as they queue to enter Ikea in Warrington. The store opening saw large queues of people and traffic on adjacent roads as it reopened after the lockdown. The furniture and housewares chain reopened its stores across England and Northern Ireland subject to several restrictions, keeping its restaurants closed and asking customers to shop alone
Getty
50/50 31 May 2020
A man wearing a protective face mask kneels in front of police officers during a protest against the death in Minneapolis police custody of African-American man George Floyd near the U.S. Embassy, London, Britai
Reuters