Student Loan Overpayment: £28m in Refunds Being Issued
If you are one of thousands of graduates that have overpaid their student loan without realising, you could be owed hundreds of pounds by the Student Loans Company (SLC).
What’s more, you could get your hands on it with one simple phone call!
Student loan repayment owed to graduates
The government is currently holding more than £28million in accidental student loan overpayments and some of that cash could belong to you or someone you know.
Data from the Student Loans Company initially showed that students or graduates had overpaid a total of £308million due to administrative errors (usually through no fault of their own), and while the majority of that has since been paid back, there is a hefty amount being held by the government.
Read more: A Complete Guide to Student Loans in the UK
Can I claim back student loan payments?
Although a large portion of the overpayments has been paid back to graduates, around £28.5million of it is still in the hands of the government, despite them being aware of who is owed money.
The Student Loans Company has stated that they have tried to contact all students who can reclaim a student loan overpayment but there are many that they could not get in touch with, usually due to a change of address.
Now that light has been shone on the situation, thousands of graduates are contacting Student Finance to determine whether or not they are owed money, and many of them are being pleasantly surprised with reimbursements of a few hundred pounds that they didn’t know they were entitled to.
If you are a graduate or former student that has paid back your loan or you’re still in the process of doing so, you could be eligible for a refund!
You may not even know that you have overpaid your student loan, because in most cases, overpayments were caused by administrative errors – either by an employer or lender.
Checking your eligibility doesn’t take much time and it won’t cost you any money, so you’ve got nothing to lose.
How to claim back student loan overpayment
If you find that you may have paid too much of your student loan debt, you could reclaim it from the SLC with very little effort.
To check if you could be owed a student loan refund and to retrieve the overpayment, here’s what to do:
- Call Student Finance or the SLC using their phone number: 0300 100 0611.
- Provide them with your Student Finance number.
- If you don’t know this number, you can verify yourself by answering other security questions.
- Ask the operator if you’re owed any repayments.
- If you are, request that they send it to your bank account (or take it away from what you still owe, depending on your preferences).
If you are owed money, the figure can range from anything between £20 to hundreds of pounds, so it can certainly be a welcome cash injection – even though it may seem pretty insignificant in terms of the overall amount you owe.
Remember, if you want to know more about the overpayment of your student loan, be sure to contact Student Finance or the SLC (Student Loan Company).
You might like: 10 Tips for Budgeting at University
Should I pay off my student loan?
How much you repay depends on which student loan plan you’re on. For example, those on Plan 1 and 2 are required to repay 9% of the amount they earn over the relevant threshold.
Thresholds are currently £364 a week or £1,577 a month for Plan 1, and £494 a week or £2,143 a month for Plan 2.
Read more: How Do Student Loans Work?
Paying off a student loan early
As a rule of thumb, you won’t – and don’t need to – pay back any of your student loan until you earn £25,725 or more a year.
While you can reclaim overpayments made through no fault of your own, you will not be able to get back any payments you make voluntarily, so it’s usually best that you don’t jump the gun and you avoid paying back any of your loan until you are required to.
Experts usually recommend that:
- If you’re absolutely certain you’ll be a big earner for the next 30 years, then you might be better off paying the loan as soon as possible.
- Everyone else should avoid paying it off early or making lump-sum payments and should treat it as a 9% tax increase when they eventually earn over the threshold.
See our full guide to student loans for more information on how they work, or head over to our guide to student budgeting to see how you could save money while at university.