Over a million people overpaid their student loans in the 2022/23 tax year, who could be owed a payout. Find out the common reasons for overpaying and how you can claim a refund for any extra payments.

Is it worth claiming a student loan refund?

While paying off more of your loan could reduce the interest you’re charged on your student loan, it might still be worth claiming a refund. Just in the 2022/23 tax year graduates overpaid around £110 million towards their student loan.

People have reclaimed thousands of pounds from the Student Loan Company, and it’s easy to find out if you’re owed a refund.

Most people who started university between 2012 and 2022 will never pay their student loan off completely, so overpaying might not save you any money in interest.

If you don’t repay your student loan in full, it will be written off at some point in the future. When this is depends on when you started your course and if you have a Scottish student loan.  

You can use a student loan calculator to work out if you’re likely to repay your student loan in full. Remember, loan payments should stop if your income goes below the threshold, so if you plan on taking time away from work your loan is more likely to be written off before you repay it. If you’re a high earner or near the end of repaying your student loan, it might save you money in the long run to not reclaim any overpayments.  

Why you might have overpaid your student loan

There are a few reasons why you might have paid more student loan than you were meant to.

You didn’t earn more than the repayment threshold

To repay your student loan your income needs to be over the threshold for the full tax year, from 6 April one year to 5 April the following year.

If you had a Plan 2 loan and a salary of £30,000 a year, student loan payments would come out of your monthly wage because it’s assumed that you’ll work the full tax year and earn over the threshold.

However, if for example you lost your job in February and didn’t work until after the 5 April, your income would be under the threshold, and you would be owed a refund for the total amount of student loan you paid in that tax year.  

This could also be the case if your income decreased because you were on parental or sick leave. 

You kept paying after your loan was fully repaid

The Student Loan Company (SLC) recommends that you pay by Direct Debit instead of through your payslips when you’re in the final year of paying off your student loan. They should send you a letter asking you to do this.

If you haven’t kept your details up to date you might miss the message, and it’s common for your employer to keep sending your loan payments, even after you’ve paid it all off.

You can check your student loan balance and update your contact information on the GOV.UK site.

You’re repaying the wrong student loan ‘plan’

When you start a job, your employer needs to know when you started university to work out how much they should send to the SLC. If they have the wrong year written down for you, you might be paying back a Plan 1 loan, when you’re actually on Plan 2, for example.

There can be a big difference between what you paid and what you should have paid, and you could also have paid too little. It’s worth comparing what comes off your payslip with the percentage you should be paying.  

You can find details of the thresholds and the amount you should be repaying on the GOV.UK site.

You started paying your student loan too early

You should only start paying off your student loan the April after you finish university. If you get a job straight away and earn over the threshold, your employer might have started taking payments too early.

How to claim a student loan refund

If you overpaid because you didn’t earn more than the repayment threshold, you can claim through a form on the GOV.UK site. People who think they’ve overpaid for any other reason should call the Student Loan Company using the numbers below. The process doesn’t take long, and they’ll usually be able to tell you on that phone call whether you are owed a refund.

England, Northern Ireland or Scotland

• Telephone: 0300 100 0611
• Telephone: +44 (0)141 243 3660 (outside the UK)
• Monday to Friday, 8am to 6pm

Wales

• Telephone: 0300 100 0370
• Monday to Friday, 8am to 6pm (not open on bank holidays)