According to the SLC, in the last financial year more than 31,000 graduates made unnecessary overpayments at the end of their loan. This resulted in more than £19m being overpaid.

But SLC says overpayments are entirely avoidable if customers switch from automatic deductions from their salary to direct debit at the end of their loan term.

It says almost £16m of overpayments have already been refunded but this is only possible when contact information, including bank account details, is up to date.

SLC writes to every customer as they enter the final two years of repayment inviting them to switch to direct debit to avoid overpaying. However, more than 75% of customers choose to continue paying through salary deductions.

To make receiving a refund easier, in March SLC started automatically refunding customers with up to date information.

Since its introduction, SLC has automatically refunded more than £4m to customers who have not joined the direct debit scheme and have not yet claimed a refund.

But this is only possible when SLC hold up to date contact details for a borrower, including bank account information.

Steven Darling, director of repayments strategy at the Student Loans Company, said: “Over-repayments are entirely avoidable and occur if a customer does not switch to direct debit in the final stages of their repayment term.

“It has never been easier to find out when repayment is coming to an end as customers can quickly check their up to date balance on our online repayment service and call us to switch to direct debit in the final stages of their loan.

“We also proactively contact customers as they enter the final two years of repayment to encourage them to switch to direct debit. We have been working hard to ensure that every customer knows when to switch to direct debit, and for those who don’t, we have been speeding up and improving our automatic refund process.

“Customers can always contact us if they are due a refund, but we would rather avoid over-repayments altogether and for customers to take action when they are coming to the end of their repayment term.”