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Mouthy Money Your Questions Answered panelist, Laura Suter, answers one reader’s question on how to claim their money back after overpaying their student loan.
Q. I think I’ve overpaid my student loan, and I could really use this money elsewhere, how can I get it back?
A. Most people will repay their student loan through their salary, with their employer automatically deducting the money from their pay each month. It means that you don’t need to think about making the payments – however, it also means that it’s quite easy to repay too much money.
A recent freedom of information request from MoneySavingExpert found that one million graduates had paid more than they owed on their student loans.
This could be for a number of reasons, either because you’ve made a repayment on your student loan when you don’t actually earn enough to need to do so, you’ve been put on the wrong repayment plan, or you have wiped out your student loan debt but carried on repaying.
If you think you might have overpaid you should check your online account with the Student Loans Company to see if you have made an overpayment.
You can then complete their online refund form to request your money back. You’ll have to provide some basic details, like your National Insurance number and customer number. Alternatively you can contact them on the phone, if you need more help trying to work out if you’ve overpaid or more assistance with processing your refund.
One thing to bear in mind is whether the overpayment is a bad thing. If you’ve paid off your loan but carried on paying, then it’s a cut and dry case that you’d want to reclaim the money.
However, if you’ve overpaid in a situation where you should have been below the earnings threshold, it might not be bad to have paid the extra money. If you’re likely to pay off the loan before it’s wiped out after 30 years (or 40 years for new loans) then the overpayment means you’ll just do that sooner. However, if you think that you’ll never pay off the loan then you’ll probably want to claim that overpayment back.
A final thing to note is that if you’ve deliberately overpaid, you won’t be able to reclaim that money. Often people will decide to make a lump sum repayment in order to pay off the loan sooner – if this was the case, you can’t get the money back.
Laura Suter is head of personal finance at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.
Photo Credits: Pexels
Award-winning freelance journalist with a decade of experience working for online and print publications in the consumer sector.