At least 10 graduates are owed more than £15,000 after overpaying their student loans – with one owed nearly £50,000 by the Student Loans Company. Some former students in England overpaid on their loans more than five years ago and they still have not claimed their refunds, according to Student Loans Company (SLC) data.
The figures, obtained by Research Professional News, show that one individual overpaid their student loan by more than £48,840, and a further three people overpaid by more than £20,000. The data, which was obtained under the Freedom of Information Act, shows none have received refunds for the five-figure sums.
The SLC said it has “repeatedly” contacted the high-earning individuals owed money but they have either not responded to their communications or they have opted not to request a refund at this time. It added the average amount owed to graduates who had overpaid in the 2022-23 financial year was £406.
Historically, the SLC received student loan repayment information from HM Revenue and Customs (HMRC) once a year – which meant some people continued to repay their loans after their full balance had been settled. But since April 2019, the HMRC has been sharing repayment information with the SLC on a weekly basis.
Nick Hillman, director of the Higher Education Policy Institute (Hepi) think tank, called the latest figures “genuinely shocking”. He told Research Professional News: “In most cases, people repay their student loans through the tax system via their employers, so these people should not generally be that hard for the authorities to find.
“If you pay your tax late, you get a fine but when it comes to official bodies giving money back to people, the processes are clearly not so good. There will always be large numbers of people who overpay a little on their loans because of the way the student loan system is based on whole tax years but no one should routinely be paying back for more than a few months longer than they should and the refunds afterwards should always be speedy.
“These new numbers should serve as a reminder to everyone to check their student loan repayments just in case they are in line for a windfall.”
A SLC spokesperson said: “The exceptional credit balances are the result of payments received from high-earning individual customers. In most cases, when a customer fully repays and goes into a credit balance, we automatically refund up to the value of £5,000, where they have kept their details up to date (in accordance with the T&Cs) and they can be validated.
“In all other circumstances, we use a range of communication methods to contact customers and arrange their refunds. We are reliant on customers responding to us and engaging with us to receive their refund.
“SLC has repeatedly contacted these high-earning customers using their account information, however, to date they have not responded to our communications or opted not to request a refund at this time. Over-repayment is entirely avoidable, and customers can opt to join SLC’s direct debit scheme in the final stages of repayment.
“We also strongly encourage customers to keep their contact and bank details up to date in their online account to ensure they don’t miss any refund communication. Customers can also log in to their online account to check if they are due a refund.”
In 2019, Research Professional News published data on the value of overpayments that had not been refunded, which found more than half a million former students had overpaid on their loans.
Over a nine-year period, the figures showed that more than £28 million in student loan overpayments had been unclaimed by graduates.