£28m in Unclaimed Student Loan Overpayments
24th September 2019
When it comes to handling your finances, there are just so many ways to end up leaving your money on the taxman’s table. Sometimes people don’t understand the rules, or even realise that they’re losing out. HMRC and other official bodies don’t always do a great job of explaining things and a lot of the time you’re left to figure it all out for yourself. Getting back the cash you’re owed is rarely as simple as waiting for the government to catch up and refund you automatically. Very often, you’ve got to make a claim yourself – and that’s where so many people get tripped up each year.
£28 million in unclaimed Student Loan overpayment
Right now, for example, the Student Loans Company’s own figures show that graduates are owed a combined total of more than £28 million in unclaimed Student Loan overpayments. All told, over 500,000 former students overpaid their Student Loans between 2009 and 2018, by an average of around £600 per person! That’s £308 million or so in overpayments overall, but a massive £28.5 million of that is still outstanding.
This all sounds pretty bad – and it is – but it’d be a mistake to assume that the Student Loans Company’s trying to pull a fast one here. They genuinely want to pay back the cash they owe to these graduates. The trouble is, they can’t always do it automatically. In general, your loan repayments are obviously supposed to stop after the debt’s been cleared.
However, in the last 10 years, more than 510,000 former students have continued making payments past that point.
Why have people overpaid?
As for how that happens, it’s usually because the SLC only gets updates about repayments once a year, in April when the tax year ticks over. That leaves some people paying up for months longer than they should.
To be completely fair, The Student Loans Company is doing what it can to fix this. They’re contacting people who’ve made overpayments to sort out refunds for them. Of course, that depends on those people checking their messages and keeping the SLC updated when their contact details change. Honestly, how many people really bother to contact the loans company when they switch email addresses or move house? Not enough, as it turns out.
How can I find out if I have overpaid and reclaim it?
So, what do you do if you suspect you might have overpaid your Student Loan and haven’t been contacted about it? The simple answer is to get in touch with SLC. Things should be improving now, with better and more frequent communication between SLC and HMRC, but it might be better not to wait for them to catch up and sort out your refund.
Of course, if you're now in work and have travel or other work related expenses, you should also check if you're due a tax refund back for that. The average is around £800 per person per year, and you can claim back up to the last 4-years at once.