Martin Lewis is urging anyone still repaying their student loans to take a closer look at their accounts, as millions of people across the UK may be entitled to refunds. The renowned finance expert has explained why overpayments happen and the simple steps borrowers can take to recover their money.
One common reason for overpaying arises when borrowers haven’t earned enough during a tax year to meet the repayment threshold, which differs depending on the type of repayment plan they are on. This can occur if earnings dropped due to maternity leave, starting a job partway through the tax year, or taking a career break, among other situations.
Lewis specifically highlighted graduates who began working between 2012 and 2022. Due to the way the Student Loans Company calculates repayments, many on Plan 2 loans may have paid more than necessary.
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He stated: “The rules clearly say you only need to repay your student loan if your annual income passes the repayment threshold. For Plan 2 borrowers—which covers most graduates in England from 2012 onwards—that threshold is £28,470 per year. You repay 9% on anything earned above that.”
However, because the repayment system operates on a monthly basis, deductions are made based on monthly earnings rather than annual income. For example, an individual starting a job in July earning £3,000 a month might pay 9% on earnings above the monthly threshold of £2,372. But if their total income over the full tax year (April to March) is under £28,470, they shouldn’t have to repay anything.
Lewis gave a scenario where a graduate who worked nine months earns £27,000 in total, falling short of the yearly threshold. Despite this, monthly repayments could have totalled around £508, which is refundable. “If you earned less than the threshold, you don’t have to repay your student loan. You can claim back any overpaid amounts – this could be significant for many people,” he emphasized.
To find out if you are due a refund, the simplest option is to contact the Student Loans Company directly at 0300 100 0611 and ask for a balance check. If you’re owed money, they’ll guide you through the refund process over the phone. Alternatively, you can request a refund online through their website if you have your login details handy.
Checking your account now could mean reclaiming hundreds of pounds you’re entitled to – it’s a straightforward step that could make a real difference to your finances.