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A university graduate owed more than £50,000 in student loan overpayments is one of 10 to be out of pocket by more than £15,000, prompting a fresh warning to check how much you’re paying.
If you went to university before starting out in full-time employment or if you undertook a postgraduate course to further your learning, the chances are you at one time or another also took out a student loan.
While these naturally aid people being able to afford things while studying, it often seems the case that it’s without without a full understanding to those using the loans of the mechanisms of paying it back later in life.
In the UK, these loans are provided through the government mechanism of the Student Loans Company (SLC). If you’re already paying one off, then you should check in on it from time to time – to keep tabs on how much you’ve left to pay, sure, but also to ascertain whether you’d be better off paying back a larger chunk in one go, if you’re able, due to fluctuating interest rates.
And, as you get close to the finish line, for another reason entirely: to make sure you don’t overpay.
This is because although HM Revenue and Customs (HMRC) will inform your employer when payments can stop, they also say it can take around four weeks for that to filter through and the automatic payment systems to stop deducting money from your salary.
Previously that wasn’t the case – details were transmitted to SLC once a year and only then would the stop payment order be issued, meaning bigger overpayments for longer periods of time.
The SLC say the average amount owed to graduates who overpaid in the 2022/23 financial year was £406. Some former students in England overpaid more than five years ago and still have not claimed their refunds, according to SLC data. The figures, obtained by Research Professional News, show that one individual overpaid their student loan by more than £48,840, and a further three people overpaid by more than £20,000.
The data, obtained under the Freedom of Information Act, shows none have received refunds for the five-figure sums.
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The SLC said it has “repeatedly” contacted the high-earning individuals owed money but they have either not responded to their communications or they have opted not to request a refund at this time.
So, how do you check in on your own student loan figures and how can you make sure you don’t overpay?
Stay up to date with your account
The best and easiest thing to do is to log in regularly and check up on the status of your repayments. The website for checking your own account is here and SLC offer a range of services, including:
- checking your balance
- see how much you’ve repaid towards your loan
- see how much interest has been applied to your loan so far
- make a one-off repayment
- set up and amend Direct Debits
You can also request refunds if your income was below the required thresholds, check your repayment plans and repay in your local currency if you live overseas.
Also, depending on when you took out the student loan (and where from) could affect which repayment plan you’re on – that can all be checked once logged in.
To log in, you need your customer reference number or email address, a password and a secret answer that you set up initially. If you don’t have these or have lost them, reset them with your original student loan application email address. If you don’t have that either, contact SLC here.
Ensure details are correct – especially if you move
One other thing you can do once logged in is one of the most important, and one of the big reasons SLC say they struggle with repayments at times: updating your details.
SLC are reliant on being able to get in touch with you if there are any changes to notify you about – or indeed to make repayments.
That becomes somewhat difficult if you’ve changed address and other contact details, have a different bank account or even left the country.
Consider a direct debit as you get close to finishing repayments
As payment is taken towards your student loan based on your annual earnings and how much over the threshold that is, it’s normal that your repayment amounts might change over time.
You also have to factor in interest, which is charged on your student loan and which in recent years has seen a jump due to interest rates being higher. Currently, most plans (except postgraduate loans) are charged 4.3 per cent interest, but you can check rates here.
To avoid overpaying, you can set up a direct debit when you get close to finishing, which should mean you only pay the exact amount you need to in equal instalments, irrespective of how much you usually pay.
A SLC spokesperson said: “Over-repayment is entirely avoidable, and customers can opt to join SLC’s direct debit scheme in the final stages of repayment.
“We also strongly encourage customers to keep their contact and bank details up to date in their online account to ensure they don’t miss any refund communication. Customers can also log in to their online account to check if they are due a refund.
“The exceptional credit balances are the result of payments received from high-earning individual customers. SLC has repeatedly contacted these high-earning customers using their account information, however, to date they have not responded to our communications or opted not to request a refund at this time.
“In most cases, when a customer fully repays and goes into a credit balance, we automatically refund up to the value of £5,000, where they have kept their details up to date (in accordance with the T&Cs) and they can be validated.
“In all other circumstances, we use a range of communication methods to contact customers and arrange their refunds. We are reliant on customers responding to us and engaging with us to receive their refund.”
Additional reporting by PA