14th Nov 2024
Reading Time: 3 minutes
Save the Student recently campaigned to encourage anyone paying back their student loan to check if they’re eligible for a refund. There is a £184m pot due to be refunded – here’s everything you need to know.
How Much Could I Reclaim from Student Loan Overpayments?
Why Are Refunds Owed?
The Student Loan company is owned by the Government. There are several reasons why someone might be owed a refund, ranging from technicalities to errors.
The first, and main reason – adding up to over £140m of the refund pot – is for those who haven’t been earning the minimum threshold but have been repaying anyway. This usually happens when someone does earn more in a single month – such as if they receive a bonus or overtime – and the system is triggered. They are then charged a repayment each month despite not needing to pay. The system is supposed to account for your annual income, so if you have received more in one month than you usually would this would look to the Student Loan company system like you’ve had a permanent pay rise.
The amount at which this is triggered depends what Student Loan plan you’re on. It can be as low as earning £21,000 a year for post graduate student loans, while other plans have thresholds ranging from £24,490 to £31,395 a year – you can check which plan you’re on, and so which threshold you are in, on the Gov website here.
Another reason for claiming a refund is that some students might be charged too early – such as in the April immediately after graduating.
You may also be owed a refund if your employer has continued to take deductions after your loan is paid off, or they have you paying an incorrect amount.
How Much Could I Reclaim from Student Loan Overpayments?
While there is a massive £184m pot of money caused by overpayments or incorrect payments, the actual amount you could receive can vary a lot.
Some people might get back under a hundred quid, while others could be owed £1000 or even more. It all depends on the reason why you’ve had an overpayment, how long you were overpaying or paying incorrectly, and how much you overpaid.
How to Claim a Student Loan Refund
If you think you might have overpaid your student loan, or you want to check if you have, it’s really easy! You can log in to your account online here. Check your balance, how much you’ve paid, and how much is left. You will also be able to see if you have overpaid and are due a refund. If so, follow the instructions on your account to claim a refund – over 400,000 students have already done so! (Don’t worry, the pot won’t ‘run out’ – people can only get back what they’ve overpaid, so you’ll get what you’re owed).
However, before you reach for the refund, think twice if you need to request one. Of course, if your loan is fully repaid and you overpaid, then claim! However, if you’re still paying back your student loan, keeping the overpayment on your account could reduce the length of the term of the overall loan – and reduce the amount in interest you pay overall. But, with the cost of living crisis still very much in effect, many people are choosing to take the refund because they need the cash now. Which is a good option! Just make sure you weigh up whether you need the cash right now, or if the overpayment to reduce the loan length and interest is what you’d prefer as an outcome.
