In December 2018 it was discovered that hundreds of thousands of students had unknowingly been making student loan overpayments- and that they were entitled to receive a refund and get their money back.
I hadn’t been unaware of this until recently, when a friend’s partner was refunded over £900 for overpayments made! NINE HUNDRED great British pounds. Although this refund is at the higher end of what people have received, according to statistics from Money Saving Expert, the average amount claimed back is £330. Still very much worth enquiring about.
How have the student loan overpayments occurred?
You might be wondering how it is possible that hundreds of thousands of students have been making overpayments on their loan- and there are a couple of reasons why this might have happened to you.
You started making repayments too early
Regardless of the amount that you earn, you should only have started making repayments on your student loan from the April after graduating.
Many people started making repayments before this, which is where the overpayment has occurred. This could be due to a mistake by your employer- there is the possibility that when you started your role, they set up your paperwork to show that you should start repayments straight away.
Alternatively, it could be that the HM Revenue & Customers starter checklist form was not filled out correctly- perhaps some dates were mixed up or another admin error occurred.
Your earnings were under the threshold
You could also claim if you’ve started paying back your loan whilst your earnings in that taxable year are under the threshold. For example, if you started a job with a £27k salary, but only earned £15k within the taxable year, you might have made overpayments on your student loan.
Due to changes in 2012, the repayment threshold will vary depending on when you started university. It’s worth noting that the current threshold for those who started university between 1998- 2012 is £18,935, but if you started university in 2012 or the years that follow, the threshold is £25,725. This changes every year- but the important part to note is that you repay 9% of what you earn above this threshold.
How to find out if you’re due a refund on your student loan
If you are super organised and have all of your payslips to hand from the year after you graduated, go back and see whether you started to pay earlier than the April after graduation.
If you don’t have your payslips carefully filed away (I’m definitely not that organised!), then you can call the SLC on 0300 100 0611 and explain that you think you might have started paying your student loan off to early, and would like a refund for this money.
Make sure you have all of your personal information to hand to make it as easy as possible to find out whether you are owed some money from the Student Loans Company.
Should I get a refund or leave it?
If you are due a refund, it’s completely your choice on whether you want this to be sent to you or not. If you are happy to have been paying down your loan, and you’re not going to miss the money, then that’s great.
But consider your situation- are you in a position where you could take the refund, and then put this towards a credit card or loan with a higher interest rate? Is it likely that you could pay off your student loan in 30 years, or is it likely to get wiped? Is this money going to make a huge difference to you now?
If you are due a refund, ask yourself all of these questions first to make sure that you are making the right decision for you and your financial position.
So there you have it- potential to access hundreds of pounds in overpayments- it’s definitely worth checking to see whether you too have been making overpayments on your student loan over the last few years. If you are entitled to a refund- I’d love to hear from you!
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