I gave wrong bank details for my £1,573 student loan payment – where has it gone? CRANE ON THE CASE

I started my degree at the University of Birmingham a year ago – but I still haven’t been paid the first installment of my student maintenance loan. 

This was due on 30 September 2024 and was worth £1,573.11. 

After some investigating, and with the help of my dad, we realised I had accidentally entered the wrong sort code for my bank account on the application form. 

The Student Loans Company tried to trace the payment between its bank, Natwest, and my bank, HSBC, but this took three months and still didn’t find the money.  

No one has told me whether the incorrect account details I put in match a real person’s account. I don’t know if the money has been received and spent by someone else, or just lost in the ether.

I’d really like to know what happened – especially as I still have to pay the money back. G.M, Birmingham

Money worries: This student didn’t receive her first loan installment on starting university

Helen Crane, This is Money’s consumer champion, replies: You made a mistake,  which is easily done, whether you are young and inexperienced or not.

If the money had been sent to someone else and spent or transferred to a different account, and your bank HSBC couldn’t claw it back, you knew it was possible you’d have to simply accept a hard lesson learned. 

The Student Loans Company, after all, is a public body and couldn’t loan out taxpayer cash twice over to make up for your error.  

But before you admitted defeat, you wanted some answers about what really happened. You’d been trying to get these for a year, all while settling in to your new life at university. 

You have managed to get by financially because the Student Loans company agreed to bring forward your next maintenance loan payments. 

These are normally paid in three installments at the start of each term, in September or October, then January and finally April – but you received the January payment in October and the April payment in January, having to save and borrow to get through the final term. 

What’s more, the £1,573.11 you never received will still be added to your total student debt, which will unfortunately be significant. 

According to Government figures, those who finished their course in 2024 graduated with £53,000 of debt. But that’s before you consider the interest, currently added at a rate of 3.2 per cent for someone on your loan plan – meaning that £1,573.11 could end up as much more. 

I agree that the SLC and HSBC could both have done better.

First, the SLC took far too long to look into it. You informed it of your mistake within three days of the payment being made, on 3 October. However, the SLC didn’t ask its bank, Natwest, to carry out a payment trace until 24 October. 

This was despite you and your dad making many phone calls to check it was in progress, which you were erroneously given the impression it was.  

This could have been crucial as, if the money did go to someone else’s account, it gave that person ample time to withdraw or spend it.

The trace wasn’t concluded until 25 January 2025, and according to SLC records the outcome from Natwest was recorded as ‘Non recovery: No response from end user’. 

This, as I understand it, means that HSBC didn’t respond to Natwest’s enquiries, which is also unacceptable. 

You and your dad visited an HSBC branch, where you were told that the sort code and account number combination you wrongly entered on the student loan form didn’t belong to anyone else. 

Mistake: G.M accidentally entered the incorrect sort code when filling out the application

However, this was never confirmed to you by HSBC head office, or to the SLC as part of the payment trace. 

As a last-ditch attempt to work out what on earth was going on, you reported the issue to the SLC’s independent assessor, a service which impartially considers complaints. 

This simply found the investigation into the missing payment was ‘inconclusive’.  

The SLC offered you compensation of £100 in recognition of its poor service, but this rested on you closing the complaint, which you did not want to do. 

You therefore contacted me for help. 

I first contacted the SLC, which as I expected said that it couldn’t send the money out again as it is bound by Government spending regulations which don’t allow payments to be reissued. 

A spokesman said: ‘We paid G.M’s first maintenance loan payment using the bank account information provided by her. However, following the payment being made, [she] informed us that the nominated bank account didn’t belong to her. 

‘As part of our investigation, we contacted the receiving bank, and it was confirmed that her payment could not be returned.

‘In such instances, the only way we can support the customer is by bringing forward the second and third maintenance loan payments, as the regulation provides no discretion to reissue the original payment. We sincerely apologise to G.M for the service delay she experienced during our investigation.’

It added that it runs campaigns to encourage students to check that the bank and other details on their student loan accounts are accurate.

I then contacted HSBC to see if I could push it to track the lost money down – and miraculously, it did within days. 

A spokeswoman for HSBC said: ‘We are pleased that, following further investigation, we have been able to locate and redirect the payment from the Student Loans Company to G.M. 

‘We are sorry there was a slight delay in bringing this to a conclusion and wish her well in her studies going forward.’

I do think that a ‘slight’ delay is an understatement.

A Natwest spokesperson said: ‘As soon as we were made aware of G.M’s issue, we immediately submitted a payment recovery request with the receiving bank, but unfortunately this request received no response after multiple attempts. 

‘We are pleased that [the] funds have now been located by her bank, and wish her the very best in her studies.’

I asked HSBC whether the money had been paid to someone else, or just lost – but it did not confirm. 

Given a year has now passed, I feel it’s unlikely another customer wouldn’t have either spent the surprise windfall, or reported it to the bank – so my money is on it having been stuck in a holding account or similar.

We’ll never know, but I’m pleased you now have the money ready for the second year of your course. 

I’m sure you are also now a fastidious form checker for life – which is never a bad thing.