New digital student loan repayment scheme will stop graduates overpaying debts
GRADUATES will soon be able to check their student loans online following an overhaul of the accounts system next year.
It will replace the current annual letter scheme to allow former students to monitor their student loan balance with up-to-date information.
The government, which hopes to launch the digital system in 2020, says that it will save students cash by reducing the risk of overpaying their debts.
This is because it will give ex-students more control to switch from automatic salary deductions to direct debits payments when they are nearing the end of the their repayment term.
This will hopefully stop them from paying back more than they owe.
Universities Minister Chris Skidmore said: "With more and more people enjoying the benefits of a university education, it's only right that graduates have easy access to the information they need about repaying their student loan.
Started higher education 1990 - 1997 (under 40s): 25 years after your first payment or when you reach 50.
Started higher education 1990 -1997 (over 40s): When you reach 60.
Started higher education 1998 - 2005: When you reach 65.
Started higher education 2006 - 2011: 25 years from the first April after graduation
Started higher education after 2012: In England and Wales, 30 years from first April after graduation.
It's 35 tears for Scottish students and 25 for Northern Irish.
"The government is investing in the student loans system to make it as simple and easy for people to use as possible.
"I urge all graduates to use this new service and to join the direct debit scheme as they approach the end of their loan to ensure a smooth end and not repay more than they should."
The overhaul is part of a wider plans to improve the archaic Student Loans Company repayment system, the Department for Education (DfE) said.
University tuition fees now stand at up to £9,250 a year in England, and students are able to get a government loan to cover the cost, as well as borrow money for living costs.
From April next year, graduates will start paying back their loans once they are earning £26,575 a year.
Earlier this year, we reported how, shockingly, students will owe a collective £8.6billion in interest on their loans within the next five years as the burden on graduates is set to double.
But Martin Lewis reveals sneaky trick that could save former students hundreds of pounds in student loan repayments.
Last year, MoneySavingExpert revealed in December that students could be due £333 each because they started repaying their student loan too soon.