MILLIONS of pounds has been overpaid by accident to the Student Loans Company and it can now be claimed back.
The SLC has a pot of £28million in loan overpayments which were made by mistake by those who have cleared their loans and those currently still paying them back.
Last year it was revealed that a whopping £308million had been overpaid to the SLC due to errors.
The data was exposed via a Freedom of Information request by Research Professional News.
The majority of this has now been paid back but there is still £28million remaining. The SLC confirmed today this was the most up-to-date figure it held for the overpayments.
Typically loan repayments are taken automatically from wages each month. But in some cases the amount taken by the SLC was too much.
The SLC said it has contacted students due a repayment, but due to changes of address and details, not all of them could be reached.
It was reported in The Guardian last year that more than half a million former students had overpaid by around £600 each.
A story of receiving an overpayment of £250 was then posted on a Reddit thread. Following this several users called up the SLC and then received refunds.
The user Voyager87 said: “Wow, they've refunded £5k today thanks to this post. Enjoy!”
Benat Tank2 said: “My Mrs just got £630 back”
And MichaelMoore92 said: “you absolute hero. Just got £221, will be with my next Tuesday.”
Refunds are still being made now and this week users on Twitter reported receiving them.
If you think you might have made an overpayment, all you need to do is call the SLC repayment team and ask it if you have made any repayments.
You can call them on 0300 100 0611 and you will need to give your Student Finance number, which you can find on any letters from it.
If you don’t have this you can give other personal details such as your payroll number, bank details, or a PAYE reference from a payslip to verify your identify.
The first person to post their story on the Reddit thread said: “Mash the keypad repeatedly if you don't have your number then you'll get through to an operator who can verify you other ways,” as a way to get through to a human being who can help.
If you are due any repayments, you can choose to have this money paid back to you directly or you can put it towards your existing loan if you have one.
When are student loans written off?
MONEYSAVINGEXPERT compiled a handy guide on when repayments stop, regardless of how much you have left to pay.
Started higher education 1990 – 1997 (under 40s): 25 years after your first payment or when you reach 50.
Started higher education 1990 -1997 (over 40s): When you reach 60.
Started higher education 1998 – 2005: When you reach 65.
Started higher education 2006 – 2011: 25 years from the first April after graduation
Started higher education after 2012: In England and Wales, 30 years from first April after graduation.
It's 35 tears for Scottish students and 25 for Northern Irish.
While it may be tempting to take the cash, depending on which student loan you have it might be better to put the money towards your loan.
Helen Saxon, Banking Editor of MoneySavingExpert.com, explains: “For those who have Plan 2 loans, stats show that over 80 per cent of graduates won’t repay their loan in full in the 30 years before it wipes.
"While the interest rate is as high as 5.4 per cent it may seem more logical to repay early, for most, in reality taking the overpayment back will just mean you’re paying more unnecessarily and won’t mean you pay less in the future – so taking the cash is a pure gain.
“If you have a Plan 1 loan, you likely borrowed a lower amount, at a lower interest rate, with a lower repayment threshold – so you’re much more likely to clear the balance before the loan is wiped."
Whether you take the cash or not will depend on your own circumstances. If you have more expensive debts, for example, it might be better for you to pay these off first.
Helen said: “ With the Plan 1 loan, the decision on whether to cash out is more of a grey area – as the interest rate on these loans is currently 1.75 per cent, you might be better off taking the cash and paying off more costly debt, such as credit cards, overdrafts and some mortgages.
“Or, if you have a good savings account rate locked in or are saving in a Help To Buy ISA or Lifetime ISA with a better rate (with the added benefit of a 25 per cent top up from the Government if you buy a home), you’d be better off making gains there.
“But if none of these apply to you, in theory it might be worth leaving the overpayment in your student loans account if it means you’ll repay slightly earlier.”
University tuition fees now stand at up to £9,250 a year in England, and students are able to get a government loan to cover the cost, as well as borrow money for living costs.
In 2020 a digital system is expected to be introduced for student loan repayments.
Martin Lewis reveals sneaky trick that could save former students hundreds of pounds in student loan repayments.
One in five university students are left poorer by studying for a degree.
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