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£28m+ in student loan overpayments unclaimed – how to get your money back

£28m+ in student loan overpayments unclaimed – how to get your money back

More than £28 million which was overpaid on student loans is sitting waiting to be claimed by graduates, new figures reveal.

Between 2009 and 2018, more than half a million former students in England overpaid on their student loans, paying on average nearly £600 too much – a total of around £308 million – data from the Student Loans Company (SLC) shows.

And while the SLC tries to contact those who've overpaid and many get their money back, figures obtained by higher education website Research Professional News show that £28.5 million remains unclaimed.

For full help on how to avoid overpaying your student loan or reclaim if you have overpaid, see our Student Loan Overpayments guide.

Why are students overpaying in this way?

Overpayments are usually made due to the way information about loan repayments is shared between the taxman and the SLC.

Currently, the SLC typically receives repayment info once a year – at the end of the tax year in April. If this happens, then if a graduate finishes paying off their loan during the tax year, for example in November, they may make overpayments for the rest of that tax year.

The SLC writes to those in the last two years of their repayments suggesting they can pay by direct debit rather than through their employer to help prevent over-repayments, but some don't respond.

It should soon become less likely that borrowers will overpay, as HMRC and the SLC plan to share data more regularly.

How can I get my money back?

The SLC says it proactively contacts everyone who overpays their student loan in this way, so if you've paid too much it should alert you. If it does, you'll just need to call 0300 100 0611 (or +44 141 243 3660 from overseas) to arrange your reclaim.

However, this assumes that it has your most up-to-date contact details. If it doesn't, you may need to contact it yourself by calling the same number. You can also do this to check if you've overpaid if you're not sure.

Borrowers can also overpay in other ways too

As well as continuing to pay back their loans after paying them off in full, there are two other ways that graduates can 'overpay' their student loans (though amounts overpaid in this way are still deducted from your loan, so aren't included in the figures above):

  • Paying too early – if you started uni from 1998 onwards and were a full-time student, you should only have started repayments from the April after you left your course at the earliest, REGARDLESS of how much you earned. Figures released to MoneySavingExpert.com under the Freedom of Information Act in November 2017 revealed that more than 100,000 university leavers in three years alone started repayments before this.

  • Paying when you have an annual income under the repayment threshold – when you make your repayments via PAYE, student loan contributions are taken when you're paid, whether this is weekly, monthly or otherwise. So you repay when your earnings go over the equivalent of the annual repayment threshold (the salary level at which you have to start repaying your loan for your pay period, eg, if you're paid monthly, you'll pay back your loan every month your pay goes over the monthly equivalent of your repayment threshold).

    However, if over the course of a tax year (which runs from 6 April to 5 April) your total income is less than the threshold, you can reclaim the cash back.

In both of these circumstances, the money you've overpaid will actually go towards your loan (unlike in the scenario where you keep paying after finishing paying back your loan in full), but you've still paid more than you need to and can get money back. See the Student Loan Overpayments guide for full help on how to reclaim.