🎓 Student Loan Overpayments in the UK: How to Reclaim What You’re Owed

If you’ve been repaying your student loan in the UK, you might be surprised to learn that thousands of graduates overpay their loans every year — often without even realising it. Whether you continued paying after your balance was cleared, or your employer deducted payments too early, you may be due a refund of hundreds — or even thousands — of pounds.

In this guide, we explain why overpayments happen, how to check if you’ve overpaid, and how to get your money back — completely free.

💡 What Is a Student Loan Overpayment?

A student loan overpayment happens when you pay more than you owe, either:

• After your loan balance is fully cleared

• Because payments were taken before you earned the repayment threshold

• Due to incorrect salary deductions by your employer

• Because of delays between Student Loans Company (SLC) and HMRC updates

It’s more common than most people think. According to the Student Loans Company, over 50,000 people overpaid their student loans in 2023 alone — totalling more than £60 million in refunds.

🧾 Why Do Student Loan Overpayments Happen?

Here are the most common causes:

🔹 1. Overpaying After Your Loan Is Repaid

Due to delays in communication between HMRC and the SLC, repayments often continue even after your balance hits £0 — especially if you’re paying through PAYE.

🔹 2. Early Deductions

Repayments should only start from the April after you graduate and once your income exceeds the threshold. Some employers mistakenly start deductions too early.

🔹 3. Multiple Jobs

If you have two jobs, repayments might be taken from both, even if your total income doesn’t meet the threshold.

🔹 4. Self-Assessment Errors

Self-employed individuals might enter incorrect earnings figures or pay based on outdated balances.

📈 What Are the Current Repayment Thresholds?

Student loan repayments only kick in once you earn above a set income threshold, which varies based on your plan type.

🔍 How to Check If You’ve Overpaid

✅ Use the Student Loan Overpayment Tool

You can check directly with the Student Loans Company by:

• Calling 0300 100 0611 (Mon-Fri)

• Or filling out their refund form on:
  SLC Overpayment Refund Page

Make sure you have:

• Your customer reference number (from your loan statements)

• Details of your bank and employer

• Recent payslips or P60s if available

💷 How Much Could You Be Owed?

Refunds can range from £10 to over £2,000, depending on:

• How long repayments continued after your loan was cleared

• Whether payments were taken in error before you reached the threshold

• Whether multiple employers deducted payments without accurate calculations

One graduate was refunded £3,000 after six months of incorrect deductions post-repayment.

📬 How to Claim a Refund from the Student Loans Company

Step-by-Step Guide:

🔹 1. Contact the SLC

Call or fill out the refund form on the official site:
https://www.gov.uk/repaying-your-student-loan/getting-a-refund

🔹 2. Provide Your Loan & Payment Details

You’ll need:

• Your name and date of birth

• Your customer reference number

• Dates of overpayment

• Evidence if available (e.g. payslips or loan statements)

🔹 3. Wait for Verification

Refunds are usually processed within 14–30 working days. If your case is complex, it may take longer.

🔹 4. Receive Your Money

Refunds are made directly into your bank account. You won’t be taxed on it.

💬 What UK Banks Are Involved in the Process?

Most people repay their student loan via PAYE, and deductions are handled by:

• NatWest

• HSBC

• Lloyds

• Barclays

• TSB

• Halifax

If you’re repaying manually (e.g. if you’re self-employed), you may be paying from any UK bank account. The SLC will refund to your chosen UK current account, regardless of the bank.

📉 Can Student Loan Overpayments Affect Your Credit Score?

No. Student loan repayments — and overpayments — do not appear on your credit report and have no direct impact on your credit score.

That said, if overpayments lead to financial hardship (e.g. missed bills), indirect consequences could occur.

🧠 Pro Tips to Avoid Overpaying Again

✔️ 1. Sign Up for Direct Debit When Nearing Repayment

Switching to direct debit during the final months of your loan helps avoid post-clearance deductions. You’ll get alerts when your balance is close to £0.

✔️ 2. Monitor Your Loan Balance Regularly

Log into your SLC online account monthly to check how much is left.

✔️ 3. Check Your Payslips

Make sure deductions are only being made once your income exceeds the repayment threshold.

✔️ 4. Update Your Contact Details with SLC

If they can’t reach you, you may miss important repayment notices or refund notifications.

❗ What If You’re on the Wrong Plan?

Many graduates are on the wrong repayment plan – which means they could be paying too early or too much.

For example, if you’re on Plan 2 but your employer marks you as Plan 1, you’ll start paying too soon.

Use this free tool to check your correct plan:
Which Student Loan Plan Am I On? – GOV.UK

If you discover you’ve been repaying under the wrong plan, you may be entitled to a larger refund.

🔗 Useful Resources

• SLC Refund Form and Contact

• GOV.UK: Repaying Your Student Loan

• MoneyHelper – Student Loan Advice

✅ Summary: Key Facts About Student Loan Overpayments

🔍 Final Thoughts: Check Today, Reclaim What’s Yours

If you’ve been repaying your student loan without checking your balance — or you’ve recently finished paying it off — there’s a real chance you’ve overpaid. And in many cases, it could be money that’s been quietly slipping away for months (or even years).

Don’t wait — it takes just a few minutes to check with the Student Loans Company, and you could get hundreds back into your account.