You Could Be Owed Hundreds of Pounds in Student Loan Refunds

Calling all UK people with a student loan! There’s a good chance that you – alongside around a million other graduates – have been overpaying without knowing. You might be able to claim hundreds of pounds back, and it’s pretty easy to do. 

A Freedom of Information request sent by Save the Students reveals that the Student Loans Company is currently holding onto over £100 million worth of overpayments from grads. Most of them – 856,000 in 2021/22 – have been paying *despite* earning below the salary threshold. Only two percent have so far claimed their fair share back. 

There are other ways grads have been overpaying as well: Around 40,000 have been paying before they legally need to and 200,000 have been paying under the wrong plan. Amazingly, most of the people who successfully received refunds only did so after their balance was cleared and they were contacted by the Student Loans Company or issued an automatic refund. 

It’s really not too complicated. The best way – according to Save the Student’s money expert Tom Allingham – is to go through old payslips and compare them to the official repayment rules. 

“The Plan 2 repayment threshold is currently £27,295 a year,” Allingham says. “In the case of graduates repaying their Student Loans despite earning below the threshold, this tends to be because their salary has varied throughout the year.”

According to Allingham, repayments are made “in accordance with the monthly or weekly equivalents of this threshold”. So, if you work extra shifts or move to a higher-paid role part-way through the year, you may have started making repayments. Crucially, though, if your total earnings at the end of the financial year are still below £27,295, you’re entitled to a full refund of any repayments you made. Check your pay cheques!

You may not know this, but you don’t need to start paying a penny of your loan until the April after you graduate. This applies to both undergrad and postgrad degrees, but there are some extra considerations for part-time students. You can find more info on that here.

There’s a different repayment plan for each salary, and for different parts of the UK. For example, the threshold for Plan 1 is £22,015, while for Plan 2 it’s £27,295. 

If you’ve mistakenly been put on Plan 1 when you should be on Plan 2, it could mean you’re making repayments on a lower salary than you should be.

How much of a refund could you get?

The average amount you’re owed varies depending on your situation, but most are upwards of £100 and some sums could be into the thousands. And that’s from a loan many never fully pay off anyway. So what is there to lose? Go and get your cash. You can contact the Student Loans Company here.