Any queries? We have nearly completed repaying my education loan – how do you avoid overpaying?

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Any queries? We have nearly completed repaying my education loan – how do you avoid overpaying?

Any queries? We have nearly completed repaying my education loan – how do you avoid overpaying?

We frequently get questions via our websites. We try not to provide advice, but we you will need to signpost to resources of further support and information. A few of the replies may be helpful to other people, therefore sporadically we’re going to anonymously post them as ‘question and response’ news things. We now have gotten a relevant concern recently from a student-based loan borrower that has very nearly completed repaying their education loan.

Take note – it is published as a ‘news’ item, meaning the information and links aren’t evaluated and updated. You must not count on it without checking the total facts of the Student Loans Company to your case or even an income tax adviser. </em>


I’ve nearly finished repaying my Arrange 1 student loan. We have read within the news that borrowers will find by by by themselves overpaying their loans which clearly i will be keen in order to avoid. Exactly what can i actually do to avoid this from taking place?


We recognize that this is often a typical issue and the one which both borrowers plus the scholar Loans Company (SLC) would you like to avoid. Unless you’re working abroad, you will definitely repay your student loan(s) through the income tax system whether you spend through Pay while you Earn (PAYE) or through Self Assessment. Overpayments may appear towards the final end of repaying the mortgage due to timing variations in sharing information between HMRC, that are gathering the mortgage repayments, plus the SLC whom administer the loans. But, HMRC additionally the SLC will work towards more regular data sharing which ideally should reduce this dilemma occurring as time goes by. Tax Guide for pupils describes exactly just how education loan repayments are determined and just how the repayments are manufactured through the taxation system.

For the time being, then there are some actions you can do to prevent overpayments from happening if you are coming to the end of repaying your student loan.

  • You can contact the SLC and ask to stop repaying your loans through PAYE and instead move to making repayments directly to the SLC through monthly direct debits when you are about two years from fully repaying your student loan(s. We recognize that just a 3rd of borrowers choose for direct debits while the SLC are keen to encourage more borrowers to take action because it should avoid overpayments.
  • Make sure the SLC has up-to-date contact information so they can contact you if you need to. The SLC should monitor borrowers’ reports by having a view to determining when you’re getting near to repayment that is full. Then they will contact you to offer to switch you to direct debit repayments if you are nearing the end of your repayments.
  • You will have to know that for those who have fluctuating earnings, for instance you work overtime or get bonuses, then it might be problematic for the SLC to ascertain whenever you may be nearing complete repayment. You might contact the SLC to ask to be relocated to a debit repayment plan that is direct.

When you do go on to direct debit repayments then there are many points to be familiar with:

  • Failure to steadfastly keep up with direct debit repayments will imply that you certainly will back be moved to repayments through the PAYE tax system.
  • Whenever changing your work, you need to be expected to perform a brand new beginner list that will ask you to answer if you’re repaying your figuratively speaking. On concern 11 ensure you state so you will end up paying twice and overpayments will occur that you are repaying your student loan directly to the SLC by direct debit otherwise HMRC will start deducting repayments through PAYE.

For those who have currently overpaid you then should contact the SLC at the earliest opportunity and make certain they will have your proper bank details. But be skeptical of every phishing e-mails or telephone calls from fraudsters pretending to end up being the SLC!

To learn more about repaying student education loans see our begin to see the pupil loans area in Tax Guide for pupils.

Contact: Claire Thackaberry (be sure to utilize kind at call us) or follow us on Twitter: @litrgnews

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