MARTIN Lewis has warned millions of Brits could be owed hunrdreds after paying the wrong amount in their student loan repayments.
The Money saving expert has urged anyone with an outstanding student loan to check if they have been paying the wrong amount.
In his MSE newsletter, Martin explained four ways that those with student loans could be paying the wrong amount and whether they could reclaim cash.
A freedom of information request he filed previously found that a million people overpaid their loans in 2022/2023 in that year alone.
Martin says there is no time limit for reclaiming so even if this was a decade ago, you can still do it.
There are four big reasons that may mean you are owned hundreds of pounds in refunds.
You start repaying your student loan once your earnings surpass a certain threshold.
However, Martin emphasised that you may have overpaid if there were months where you began repaying your loan despite not earning enough over the tax year.
This is likely to affect those who have only been employed for part of the tax year, or those with fluctuating incomes or commissions.
The point at which you commence repaying your student loan depends on the type of plan you’re on.
For example, those on a Plan 2 loan only begin repayments when their annual income exceeds £27,295, while for someone on a Plan 5 loan, the threshold is £25,000 per annum.
Those who are in the wrong repayment plan could also be paying more than they should.
These thresholds are dependent on when and where you went to university and mark the income amount above which you begin repaying.
If you’ve not told your firm which plan you’re on, the Govt tells it to default to a Plan 1 loan, where you repay on income above £24,990 per year.
Yet millions are on plans where you only repay if you earn over £27,000 per year.
Plan 1 has a significantly lower repayment threshold than most other plans, meaning some individuals on lower salaries may have started repaying their student loan prematurely.
If the default setting is then used, you’ll have overpaid, so you should speak to your payroll to fix it and reclaim.
Another reason you could be forking out more than you should is if you started repaying your loan too early with 120,000 affected by this over the past four years.
You’re usually only eligible to start repaying in the April after you left your course.
So if you mis-stated when your studies finished, or your employer got it wrong, you could’ve repaid too early, and are due that cash back.
Lastly, you may have had money deducted after your student loan was fully repaid.
Around 190,000 are said to have been affected by this problem over the past four years.
After a set time, often 30 years but it varies, the loan is wiped.
However, you could still repay even after your loan is cleared due to pay-as-you-earn (PAYE) timings.
For those seeking to reclaim any overpayments on their student loans, the process involves logging into your student loan repayment account through GOV. UK and selecting “request a refund”.
If you suspect you’re on an incorrect repayment plan, it’s recommended to speak with your employer or get in touch with the Student Loans Company directly on 0300 100 0611.
You should also get in touch with the Student Loans Company for a refund if you started repaying your loan too early.
If deductions were made after the loan was fully paid off, the Student Loans Company should automatically issue you a refund.
If possible, gather old payslips, your payroll number and a PAYE reference number, says Martin.
But if you don’t have those, don’t let it put you off – this can often be done in a phone call, and now a new system allows some of the claims to be done online.
