Any concerns? We have very nearly completed repaying my education loan – how can I avoid overpaying?

Any concerns? We have very nearly completed repaying my education loan – how can I avoid overpaying?

We frequently get inquiries via our sites. We try not to offer advice, but we make an effort to signpost to types of further information and help. A number of the replies could be helpful to other people, therefore sometimes we shall anonymously post them as ‘question and solution’ news products. We now have gotten question recently from an educatonal loan debtor who’s got almost finished repaying their education loan.

Please be aware – this will be published as a ‘news’ item, which means that the information and links are not evaluated and updated. You must not depend on it without checking the entire facts of the Student Loans Company to your case or perhaps a taxation adviser.


I’ve very nearly completed repaying my Arrange 1 education loan. I have read inside the news that borrowers can find by by themselves overpaying their loans which clearly i will be keen in order to avoid. Exactly what can i really do to stop this from occurring?


We realize that this is often check here a typical issue and one that both borrowers and also the scholar Loans Company (SLC) like to avoid. Whether you pay through Pay As You Earn (PAYE) or through Self Assessment unless you are working abroad, you will repay your student loan(s) through the tax system. Overpayments can happen towards the end of repaying the loan due to timing differences in sharing information between HMRC, that are gathering the mortgage repayments, together with SLC who administer the loans. But, HMRC additionally the SLC will work towards more data that are frequent which ideally should reduce this issue taking place later on. Tax Guide for pupils explains just exactly how education loan repayments are calculated and just how the repayments are created through the tax 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.

  • When you’re about couple of years from fully repaying your student loan(s) it is possible to contact the SLC and get to get rid of repaying your loans through PAYE and alternatively go on to making repayments straight to the SLC through month-to-month direct debits. We realize that just a 3rd of borrowers choose for direct debits as well as the SLC are keen to encourage more borrowers to do this because it should avoid overpayments.
  • Make certain that the SLC has up-to-date contact information so they can contact you if you need to. The SLC should monitor borrowers’ records by having a view to pinpointing when you’re getting near to repayment that is full. If you’re nearing the finish of your repayments they will contact you to definitely provide to modify one to direct debit repayments.
  • It is important to know that for those who have fluctuating earnings, as an example you work overtime or get bonuses, then it might be burdensome for the SLC to ascertain whenever you might be nearing complete payment. You might want to contact the SLC to inquire of to be relocated to a primary debit payment plan.

Then there are a few points to be aware of if you do move to direct debit repayments:

  • Failure to steadfastly keep up with direct debit repayments will imply that you are going to be relocated back to repayments through the PAYE tax system.
  • Whenever changing your task, you need to be expected to accomplish a brand new beginner list that may ask you to answer if you’re repaying your student education loans. On concern 11 be sure you state that you will be repaying your education loan right to the SLC by direct debit otherwise HMRC will begin deducting repayments through PAYE – so you can be spending twice and overpayments will happen.

When you yourself have currently overpaid you then should contact the SLC at the earliest opportunity and make sure they will have your proper bank details. But keep clear of every phishing e-mails or telephone calls from fraudsters pretending to end up being the SLC!

To learn more about repaying student loans see our begin to see the learning student loans part in Tax Guide for pupils.

Contact: Claire Thackaberry (please utilize type at e mail us) or follow us on Twitter: @litrgnews