Over 100,000 graduates owed £100s EACH
Graduated in the past few years? There's a good chance that you could be owed a refund to the tune of a few hundred quid!
Over 100,000 recent graduates have started repaying their student loans too early, and if you're one of them, you could be eligible to reclaim £100s.
Student loan repayments should begin in the April after you graduate, and only once you start earning over the threshold. For most current and recent students, that figure currently stands at £21,000 a year, and will rise to £25,000 in April 2018.
However, it's now emerged that in the past three years alone, over 100,000 graduates have started repaying their student loans before the April after graduation.
How to check if you're owed a refund
Unless you're self-employed, student loan repayments are taken as an automatic deduction from your salary. The benefit of this is that there's very little that you need to do to ensure that the money is repaid.
Unfortunately, this also makes it a lot easier to ignore it altogether, meaning there's a strong possibility of you not noticing when something goes wrong.
The most likely reason for having started your repayments early is if you earned more than the threshold before the April after you graduated.
The threshold is slightly different depending on when you went to university and where your home address was when you first started (this determines which country gave you the loan, not where your uni was). Here's a quick summary to help fill you in:
- If you started uni in or after 2012 AND got your loan from England or Wales, the threshold is £21,000 a year. This will rise to £25,000 in April 2018
- If you started uni between 1998–2012 OR got your loan from Scotland or Northern Ireland at any time, your threshold is currently £17,775. However, this figure is constantly changing, so use this guide to see historic thresholds.
Note that even if you aren't paid an annual salary (e.g. you earn an hourly rate), you'll still start making repayments if your weekly, four-weekly or monthly salary is over the equivalent threshold.
That said, if your earnings for a couple of months are over the equivalent threshold, but over the tax year you still earn less, you can reclaim whatever you paid.
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Even if you didn't earn over the threshold before the April after you graduated, you still may have started repaying too early. If you or your employer made a mistake when filling out the relevant documents, there's every chance that you too could be entitled to a refund.
No matter the reason, the best way to check will be to take a look at your payslips dated after your graduation, but before the April after you graduated. They shouldn't have any student loan repayments listed on them, and if they do, it's refund o'clock.
If you don't have these to hand, don't worry – you can check with the Student Loans Company by calling the same number you use to claim a refund.
How to claim your refund
Claiming a refund for early student loan repayments couldn't be easier – all you have to do is give the Student Loans Company a call on 0300 100 0611, tell them that you think you started repaying your student loan too early, and that you'd like to reclaim that money.
As the number is the same for checking and claiming your refund, you might even be able to complete the whole process in just one phone call. Slick.
And remember, there's no limit on how far back you can claim, so even if you graduated at the start of the millennium, you could still be owed some cash.
How much could you be owed?
We're not exaggerating when we say that you could reclaim several hundred quid. The Freedom of Information request by MSE uncovered the figures for the last three tax years, and the average refunds are pretty eye-watering.
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. Given that all you need to do is pick up the phone and ask for a refund, we'd say it's some of the easiest money you'll ever make!
Is it worth getting a refund if you've got to repay your loan anyway?
It's a reasonable question to ask. Why get a refund if you're just going to have to give that money back in the form of student loan repayments? Well here's the secret: you won't have to.
Official statistics estimate that over 75% of current and recent students will never pay back their loans in full before the debt is cancelled after 30 years. This means that any money you repaid before the April after graduation is unlikely to have otherwise been paid back.
As much as we're disgusted by the amount of debt being forced upon students, it's important to remember that it's not like other debt. It's arguably the best loan you'll ever get, so think carefully before repaying your student loan early.
Read our guide to understanding your student loan repayments and hopefully you'll never overpay again!