Money blog: Treasury ‘will be concerned’ about pound fall and rising borrowing costs after budget overrun

Hundreds of thousands of graduates paid off unnecessary student loans last financial year, but many still haven’t claimed their money back.

Figures from the Student Loans Company showed that graduates had incorrectly repaid millions of pounds below the threshold, with around 60,000 people accidentally continuing to repay their loans after settling the balance.

There are four ways someone can accidentally overpay a loan:

Making repayments despite earning below the annual repayment threshold
Being placed on the wrong student loan repayment plan
Making a repayment before the repayment period begins
Continued repayment after the balance has been settled.

Tom Allingham, student finance expert at Save the Student, says: ‘The most common reason for an overpayment – despite earning below the repayment threshold – is usually when a graduate’s salary changes throughout the year.

“By working extra shifts, receiving a bonus or moving to a higher-paying position mid-year, they could suddenly exceed the weekly or monthly threshold, causing repayment.

“However, if their total earnings at the end of the financial year still fall below £27,295, they will be entitled to a refund of any repayments made during that period.”

Since many graduates will never pay off the entire loan before the balance clears, it makes sense to get your loan back on any overpayment.

Following the launch of the digital refund service in May this year, £61.6 million has been refunded to graduates.

Want to know how to claim your money back, but you’re not sure whether you overpaid? Cost of Living Specialist Megan Harwood-Baynes explains…

If you’re a friend of mine and you went to university, I’ve probably urged you to check if you qualify for student loan repayment because it’s SO easy.

All you need to do is log in to your student loan account (make sure you only use your official government website) and go to the main home page. This is the scary moment that shows you how much you owe. Ignore it for now (I always do).

Scroll down and click the “request a refund” button (I’ve highlighted it in red below).

Double-check that they still have the correct account details – if you’ve changed banks since you were a student, they may be out of date – then click Submit.

That’s all.

You’ll be notified in a few days if your refund is on the way. The funny thing is that for some reason the SLC doesn’t actually tell you how much you’ll get. Instead, you receive a very mysterious email informing you that the money will be transferred to your account within a few days.

My refund totaled £9 and one friend received a refund of £17, but another received several hundred pounds.

Regardless, the effort to reward ratio in this case is very easy – clicking the £9 button still works quite well.

And for what it’s worth, according to SLC the average amount refunded was £280 in 2023-24 and £250 this year, so you could get a nice and easy bonus just before Christmas.