Student loans company to finally refund overpayments automatically

THOUSANDS of graduates who’ve overpaid their student loan could be automatically refunded as the Student Loans Company is trialling repaying cash straight into bank accounts.

Student loan repayments differ depending on when you went to university but when you’re eligible to start paying back what you borrowed, the cash is taken directly from your salary if you’re employed.

This is taken each month at the same time as any pension and tax contributions, and you typically get an annual statement in the post summarising how much you’ve repaid.

But when the SLC calculates it’ll only take one more year to repay your loan in full, it writes to former students telling them to switch to repaying by direct debit instead.

This is to ensure employers don’t accidentally take more than you owe, which can lead to people being left out of pocket.

When this happens, the SLC says it contacts grads by letter, email, and text explaining how to claim a refund – but often people’s details have changed and they’re unaware.

To prevent this happening in future, the SLC is trialling a scheme that will see it automatically repay overpaid cash straight into the bank accounts of 10,000 former students.

The test will apply to those who failed to switch to direct debit and who haven’t responded to the SLC contacting them about how to reclaim missing money.

If their bank accounts can be verified as still being valid, a payment will drop into it around March 2 or 3.

You can check if you’ve got a refund by logging into your or by calling 0300 100 0611.

If successful, the scheme could be rolled out to all former students.

Later this year, the government is also planning on revamping the online student loan repayment service to prevent more grads from overpaying their debts.

The idea is to make it easier for people to keep their contact information up to date and to better manage the final stages of repayment.

Steven Darling, director of repayment and counter fraud said: “We are always looking at ways to improve the service that we provide, that’s why we are starting this trial, alongside other improvements to the repayment service that we’ll be introducing later this year.

“While we’re always pleased to be able to refund customers, we do not want customers to over-repay in the first place.”

MoneySavingExpert.com founder, Martin Lewis, has a trick on how to reclaim your cash if you start repaying your student loan too early.

Plus, here’s everything you need to know about how to apply for student loans and how much interest you’ll be charged.