Are you due a student loan refund for repaying too early?

Did you know that over 100,000 graduates are owed money from the Student Loans Company for repaying their loans back too early? And you could be one of them!

There’s only one number that matters on your payslip, and that’s the big juicy one at the bottom which tells you how much money you’re getting paid, right? Well, there’s actually another important number on there, one which could mean you’re owed hundreds of pounds.

It’s been revealed that over 100,000 graduates can apply for student loan refunds after the Student Loans Company (SLC) started taking repayments too early – and you could be one of them.

The best part is, it’s a lot easier than you might expect. There are no lengthy forms to fill in, and you could literally earn back hundreds of pounds in just a few minutes. Here’s your step-by-step guide to how it’s done…

When do you start paying back your student loan?

when do you start repaying your student loan

Currently, graduates don’t start paying back their student loan until the April after their graduation. So if you graduated in July 2016, you would start paying off your loan in April 2017, giving you an eight-month break before payments are deducted from your salary.

However, it’s also important to remember that you’ll only start making student loan repayments in the April after your graduation if you’re earning over a certain amount of money, and this threshold will vary depending on your personal circumstances.

If you started uni in or after 2012, and you’re from England or Wales, you’ll start making repayments when you earn over £25,725 a year. But be aware that before April 2019 this threshold was set at £25,000, and before then it was £21,000.

If you started uni in 1998-2012 OR you’re from Scotland or Northern Ireland, you’ll start making repayments when you earn over £18,935 a year, but this threshold changes on a yearly basis.

Remember that tuition fees and their repayment terms vary throughout the UK, so make sure to check out our guides on student finance in Scotland, Wales and Northern Ireland.

For those who are self-employed, HMRC will work out how much you’re due to pay based on your tax return.

Regardless of how much you’re earning, no one should be repaying their student loan before the April after their graduation.

Why have student loan repayments been taken too early?

Your student loan repayments will be deducted from your salary automatically (unless you’re self-employed) as soon as you’re eligible. While on the surface this sounds great and means you don’t have to even think about your repayments, it also means people tend not to notice when something is amiss.

There have been a number of reported reasons why repayments have been taken too early.

For example, when you start a new job, you’ll often have to fill in a form stating whether you’ll be making student loan repayments; if you or your employer makes an error filing this in, you can be incorrectly categorised as eligible for repayments when you’re not.

It’s also much more likely to happen if you start earning above the salary threshold before the April after you graduated when you’re supposed to start making repayments.

Don’t forget, even if you think you’re the one who made the mistake, you’re still eligible for that refund, so don’t be afraid to ask.

Sometimes it can just be a random admin error. For Jo Westbury, it was a mix-up with graduation dates:

How many people are owed a student loan refund?

A huge amount, so make sure to check to see if you’re one of them! In total, the numbers due a student loan refund add up to well over 100,000 and some Freedom of Information requests have revealed the eye-watering breakdown.

This shows 101,100 of you are eligible for a refund but haven’t claimed it – so if you haven’t already, hunt out those payslips and get checking.

How much could you be owed?

We’re not talking small sums here either. The average refund paid out to claimants who overpaid in the 2014/15 tax year was just over £395, while in 2015/16 it was £370 and in 2016/17 it was £266. Obviously, there are no guarantees, but if you end up with a couple of hundred quid back in your bank account, it’s well worth the phone call in our opinion.

After we shared the story earlier this year, Save the Student reader Olivia Gledhill managed to claim £74 back just by ringing up and asking. You’ve got nothing to lose.

How to check whether you’ve started paying your student loan back too early

where to find student loan repayments

All you need to do to find out whether you started making repayments too early is to get a hold of a payslip from before the April after you graduated. It should state quite clearly how much has been deducted from your salary for your student loan repayments (see right).

Don’t worry about totalling up exactly how much money has been taken too early – the SLC will do the hard work for you. As long as you have the confirmation from your payslip that at least some money was taken before the April after your graduation, you’re good to go.

Is it worth getting a student loan refund?

is it worth getting a student loan refund

Getting a student loan refund doesn’t affect the total amount of debt you owe. If you graduate from uni with £32,000 of debt, this refund (unfortunately) isn’t going to change that one bit.

So why bother getting the refund?

You have to remember that there’s a very high chance you’ll never pay off all of your student debt before it’s wiped off after 30 years anyway, so you should try and keep a hold of as much money as you can.

Research has shown that over 75% of students will never even pay off their full student loan, especially with all the added interest. In fact, if you’re curious, you can use our student loan calculator to work out how long it will take to pay off your debt.

How to claim a student loan refund

This is the bit which puts people off the most – the actual claiming of the refund. But believe us, it’s a lot more straight forward than you’re probably thinking.

It’s best to have a few bits of paperwork to hand to make the process as quick as possible, so try and have your payroll number, PAYE reference number and payslips at the ready.

If you can’t track all these down though don’t worry, MSE is reporting that many people have been successful simply by ringing up and asking, even without the paperwork.

How to contact the Student Loans Company

All you need to do is call the Student Loans Company on 0300 100 0611, explain that you think some student loan repayments were taken from you too early and that you would like to request a refund. They’ll be able to access your account to see how much you’re owed and issue your refund in one fell swoop. One phone call and your student loan refund will be making its way towards your bank account.

It also doesn’t matter how long ago you graduated – it could have been two years ago or ten years ago, all claims are still valid.

Student loan overpayments and other reasons you could be due a refund

ways to get a student loan refund

Having your student loan repayments taken from you too early is just one example of a case where you might be due a refund. There have also been reports of people claiming refunds in a number of other instances:

  1. Have you started making repayments before you started earning over the stated salary threshold? Use our complete Guide to Student Loan repayments to work how much you should be earning before you start making repayments. If you’re not on an annual salary, and get paid weekly or monthly instead, make sure to work out your annual income to do this. 
  2. Has your salary varied throughout the year? If you only worked for part of the year or moved to a lower paid role, you might have made student loan repayments even though you’re earning under the threshold. This is because the SLC calculates the equivalent annual repayment threshold for your pay period (weekly or monthly), but if you don’t end up earning over £25,725 across the whole year, you can get a refund
  3. Have you paid more than the total you owed? There have been a number of reported instances of student loan overpayments, where people have paid their loans off in full but have continued to have money deducted from their salary (in the 2017/18 tax year, a total of £36 million was overpaid by approximately 68,000 graduates). If you think this might be you, you can ring up the SLC to clarify.

The important thing to remember is to stay savvy. In most cases, your student loan repayments will be taken from your salary automatically without you having to do any work – meaning mistakes often go unnoticed.

So always take time to check your payslips, and keep up to date with any changes to repayment eligibility so you’re only ever paying back what you’re supposed to.

Want to know more about paying back your student loan? Our complete guide to student loan repayments covers salary thresholds, interest rates and more!