Student loan over-payments worth more than £28M sitting unclaimed by graduates
More than £28 million in student loan over-payments is sitting in government coffers unclaimed by graduates.
In a nine-year period, more than half a million former students in England overpaid on their student loans, paying on average nearly £600 more than they owed, Student Loans Company (SLC) data shows.
The figures, obtained by Research Professional News, show that while much of the £308 million overpaid has been collected by graduates, almost a tenth (£28.5 million) has not found its way back into their bank accounts.
The SLC said they pro-actively contact everyone who overpays to arrange refunds and that to improve its systems, it has started to receive payment information from HMRC.
The data shows that between 2009/10 and 2017/18, a total of £307,821,092 was overpaid.
Of this, £28,460,095 has not yet been refunded.
The figures also show that between these years, 513,134 people in total had overpaid, and the average repayment was £597.
Over-payments are made due to the way information is shared about loan repayments.
Traditionally, SLC has received repayment information once a year, at the end of the tax year in April.
This means that if, a graduate repaid their loans during the tax year, for example in November, they will have been making over-payments for the rest of that tax year.
An SLC spokesman said: “We want all customers to repay the right amount and not to over-repay on their loan.”
The company writes to those in the last two years of their repayments suggesting they can pay by direct debit rather than through their employer to help prevent over-repayments, he said.
He added: “We pro-actively contact all customers that have over-repaid to make arrangements for a refund; customers who do not participate in the direct debit scheme can also claim a refund at any time by contacting us.
“We urge all customers to keep their contact details up-to-date so that we can contact them at the appropriate time about the direct debit scheme.”
The spokesman also said that to improve its repayment system, the SLC has started to receive payment information from HMRC that will “help to prevent customers from over repaying and provide them with more up-to-date information about their loan repayment”.
A Government spokesman said steps have been taken to help avoid over-payments happening in the future.
“This included changing the law in April to allow weekly data sharing between HMRC and the Student Loans Company, which will help to prevent graduates repaying too much,” he said.
“If a borrower believes there has been an over repayment, they should contact the SLC to seek a refund.”
Copyright (c) PA Media Ltd. 2019, All Rights Reserved. Picture (c) Johnny Green / PA Wire.