Hundreds of thousands of graduates overpaid student loans: How to get your money back
Hundreds of thousands of graduates overpaid their student loans in the 2021/22 financial year, but just 82,000 requested a refund from the Student Loans Company, figures reveal.
In the 2021/22 financial year, 856,475 graduates overpaid their student loan even though they were earning below the threshold. This amounts to a staggering £102.4m in overpayments.
However, just 18,136 have claimed a refund (2%), according to data obtained by Save the Student, with the average value just shy of £120.
The student site also found that 39,000 graduates repaid £5.5m early. After undergraduates or postgraduate students graduate (typically around July), they first become eligible for student loan payments in the following April.
As part of this mistaken payment, the average refund amounted to £143 but just 7,323 graduates requested their money back.
Elsewhere, Save the Student figures from the SLC revealed that 52,300 continued to pay even after they cleared their debt. But the refund figure is high as the SLC usually contacts graduates or automatically issues a refund. As such 52,255 graduates pocketed an average £390 refund.
And for 98,000 graduates, they paid the wrong plan type and can expect a total refund of £27.5m.
How to get your money back
The easiest way to check if you’re owed a refund is to go through old payslips and compare them to the repayment rules and thresholds for the corresponding year. If you no longer have these documents, you can still ring the Student Loans Company (SLC) to check – although the process is quicker if you have the correct paperwork to hand:
- Your payroll number
- PAYE reference number
Contact the SLC on 0300 100 0611 (or 0300 100 0370 from Wales and +44 141 243 3660 from overseas) or contact it via Twitter or Facebook. Explain that you think some student loan repayments were taken from you incorrectly and that you’d like to request a refund.
Save the Student said it also doesn’t matter how long ago you graduated as claims will still be valid.
Save the Student’s student money expert, Tom Allingham, said: “I’d strongly urge all graduates to check if they’re owed £100s in the form of a student loan repayment refund.
“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.
“However, if your total earnings at the end of the financial year are still below £27,295 [Plan 2], you’re entitled to a refund of any repayments you made.
“But whatever the reason, if you believe you may have made incorrect student loan repayments, it’s usually worth claiming a refund. Graduates with Plan 2 loans in particular should seek to do this, as around 80% of them are expected to have some or all of their balance wiped by the Government after 30 years. As such, there’s little danger of graduates claiming money back, only to repay it again later.”
Allingham added: “Graduates with other types of student loans should also consider requesting a refund. While they’re more likely to repay their loans in full at some point, reclaiming a few hundred pounds could make a huge difference during a cost-of-living crisis. That said, graduates should consider how likely they are to repay their loan, and if they’d rather forgo a refund and clear their balance earlier.”