There is a simple way you can claim a refund
On the latest episode of The Martin Lewis show, the finance guru has shared a tip for how millions of people can claim back money they have overpaid in student loan repayments. It comes after two changes were made yesterday, November 5.
Tuition fees and the Maintenance Loan have both increased by 3.1% which is roughly the rate of inflation. Martin says the most important one of the two is the increase of the living loan. He said: “For the last few years living loans have not gone up with the rate of inflation, which is effectively starving out many people when they go to university”
He highlighted this is the case in particular with people from low income backgrounds who may struggle with living costs. Although, Martin admits we are nowhere near catching up with the ‘backlog’. As tuition fees are rising by 3.1% the next academic year will see new and continuing students have maximum tuition fees of £9,530.
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Martin warned that these changes impact how much students borrow but not necessarily how much you pay. How much student loan is repaid depends solely on how much a person earns, which is 9% of everything above £25,000.
Looking back at the 2023/2024 tax year, the money saving expert revealed there are four ways people overpaid when paying back student loan. He said the biggest reason over a million people overpay is because the loan should only be repaid if you earn over the annual threshold.
The 52-year-old said: “For example for Plan 2, which has the most number of people on it, 2012 to 2022 English starters, you’ve got to understand, if you earn less than that [£27,295] you shouldn’t repay the student loan but because it’s taken via the payroll your student loan is taken monthly. A twelfth of that is £2,274 per year, so if you earn more than that in a month, you’re gonna have student loan contributions taken from you.”
People who work on commission or only work for certain months of the year could be charged because they earn over the threshold for those months. However, their annual income could be less than the minimum. Others may have been paying more because they were on the wrong repayment plan and some graduates also start repaying loans too early.
Other reasons people may be owed money from student loan overpayments include being on the wrong payment plan, money taken from bank accounts despite student loan being fully paid and people having money deducted less than nine months after graduating.
Martin said that anyone who thinks they may be paying more on their student loans should visit the Student Loan Company website and fill out a form requesting their money back.
