Student Loan Blunder

[atalanta]

My son tells me he has just received a message from the student loan company congratulating him on completing his repayments, and also telling him he had overpaid by £2,000. He queried this, saying that by his calculations he had not overpaid, but they insisted, and sent him the money. He accepted it and spent it, but now the company is saying it was a mistake, he has to repay it, and with interest. He can’t get to the Citizens Advice because of his working hours, so does anyone know where he stands ?

[EDDIE51]

If they confirmed it was not a mistake and sent it anyway I am pretty sure they can not now say it was a mistake after all and demand the money back. They can ask him to return it but not demand it . Possibly one of the legal experts can say other but I think he is in the clear.

[thugulike]

He should use the defence of Equitable Estoppel If he can show that he queried it and they said it was OK then all he needs to do is say he spent the sum on everyday expenses (rather than something out of the ordinary like a holiday). Should be fine. he can contact CAB on the phone and they can call him back on the phone. Often no need to make a visit.

[bednobs]

is his loan backed by the government? If so, i think he will have to pay it back. He could ask for a payment plan and (IMHO) should not have to pay interest. That way he'll be no worse off, and they will be no worse off

[fiction-factory]

Estoppel can be used but it often doesn't succeed in these cases. He did the right thing to query it but if it was clearly an error- e.g. his last statement has shown he owed £20000 only a year ago and he had only repaid modest amounts- he would have been well advised to invest it in a high interest account rather than spending it quickly just in case the money was recalled. How long elapsed between his receiving the money and spending it?
Barmaid will be able to help if she sees this

[fiction-factory]

Sounds as if he spent it almost immediately given that you say he "has just received a message ... congratulating him on repaying".

[Jackdaw33]

You seem to have added an extra 0 there, FF.

[fiction-factory]

No- I meant £20000, jackdaw. I was giving an example (using a typical student's outstanding loan amount) of a case where if the figure was big a year ago it cannot now be at an overpaid stage

[fiction-factory]

Type Your Answer Here...When did he graduate, atlanta?
They will reinstate the outstanding balance I am sure - the only issue is whether they (a) add on the £2000 they sent him in error or (b) demand it back in one go , or (c) waive the £2000 (unlikely but worth trying)
Bu even if they add it on he may never have to repay it as most students now never repay their loans in full and they are written off before they are paid off

[fiction-factory]

Please can you keep us updated on this one Atlanta? Hopefully Barmaid will see the thread soon and comment on the estoppel aspects

[atalanta]

He graduated over 10 years ago.

[fiction-factory]

Thanks. Hopefully Barmaid will see it and can advise on Estoppel (although I recall that the claimant had to show he made a permanent change in lifestyle rather than a quick one-off purchase).
I recall twice I was paid twice (once as time sheets had been duplicated and then because two employers were confused as to who was paying me).I queried each and was told it was fine but I knew the admin person was wrong. However I knew it couldn't possibly be right so i just left the money in the bank and waited, and sure enough, over the following pay periods an adjustment was made and the money clawed back.
The devil may be in the detail here. It might be easier if he could tell us his outstanding balance 4,3,2 and 1 year ago so it is clearer whether it should have been obvious that an error had been made.
Citizens Advice may help here too if Barmaid can't