Earlier this year, various media outlets reported that graduates were wrongly over-charged on their student loan repayments following an investigation by Money Saving Expert. Students with loans going back to as far as 1998 suddenly became aware that they may have overpaid and would be due a refund.

The information came courtesy of a FOI request from a HE research organisation called Research Professional News. Student Loan Company were informed of the error and reported that students overpaid by around £600 per person on average.

Student Loan Company “In Contact”

SLC were recently asked for an update on the issue and said they had contacted everyone affected. They urged those who hadn’t heard from them to update their details so that they may get in touch to discuss refunds if one was forthcoming. They stressed that they do not want graduates to feel stressed about their overpaid loans and would deal with queries promptly.

In recent years, SLC has switched to recommending graduates with less than two years left on their student loans simply remove the debit from salary payment and to direct debit from their bank account to avoid overpayment.

Those who have overpaid have either received payment or will do in due course.

Changes to Administration

Until this financial year, the SLC generated how much a student repaid during the tax year at the end of each year. This meant it could take a considerable amount of time to notice a problem, long after the student had forgotten that the payments were supposed to have been cleared. If a graduate cleared their loan in the autumn, the SLC deductions would continue until the end of the tax year, not noticing the problem until the following April.

Following the revelation earlier this year, the government launched an investigation and stepped in to ensure the situation was not repeated. The law was changed in April 2019 to insist on weekly exchange of information between the relevant government department and the SLC. If a graduate believes they have overpaid their student loan, all they need to do is contact SLC and they will investigate.

How Much was Overpaid?

Money Saving Expert found in December last year that around 100,000 students had overpaid in the three successive financial years leading up to the discovery. It’s important to note that SLC were not to blame for the error. This issue was a complex loophole that came about due to flawed administration or confusion on the part of the employer of when payments should stop.

According to the figures, £6.3m is yet to be repaid to graduates who overpaid in the 2015-16 financial year while £5.9m of overpayments is still yet to be repaid to students who overpaid the following financial year – 2016-2017.