Any concerns? I’ve nearly completed repaying my education loan – how do you avoid overpaying?

Any concerns? I’ve nearly completed repaying my education loan – how do you avoid overpaying?

We frequently get questions via our web sites. We try not to offer advice, but we make an effort to signpost to sourced elements of further information and help. A few of the replies could be helpful to other people, therefore sporadically we are going to anonymously post them as ‘question and response’ news things. We’ve gotten a relevant concern recently from a student-based loan debtor who may have nearly completed repaying their education loan.

Please be aware – this really is published as a ‘news’ item, which means that the information and links aren’t evaluated and updated. You shouldn’t count on it without checking the entire facts of the Student Loans Company to your case or even an income tax adviser. </em>


I’ve nearly finished repaying my Arrange 1 education loan. I’ve read inside the news that borrowers will get themselves overpaying their loans which demonstrably i will be keen in order to avoid. Exactly what can i actually do to stop this from occurring?


We recognize that this could be an issue that is common one that both borrowers therefore the scholar Loans Company (SLC) want 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 may appear towards the end of repaying the mortgage as a result of timing variations in sharing information between HMRC, that are gathering the loan repayments, additionally the SLC whom administer the loans. Nevertheless, HMRC in addition to SLC will work towards more regular information sharing which ideally should reduce this dilemma taking place in the foreseeable future. Tax Guide for pupils describes just exactly exactly how education loan repayments are determined and exactly how the repayments were created through the income tax system.

For the time being, if you should be arriving at the termination of repaying your education loan then there are actions you can certainly do to avoid overpayments from occurring.

  • 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 direct debits therefore the SLC are keen to encourage more borrowers to take action as it should avoid overpayments.
  • Make sure that the SLC has up-to-date contact information so that they’ll contact you if you need to. The SLC should monitor borrowers’ reports having a view to identifying if you’re getting near to repayment that is full. If you’re nearing the termination of your repayments chances are they will contact one to provide to modify one to direct debit repayments.
  • You will have to remember that when you have fluctuating earnings, as an example you work overtime or receive bonuses, then it might be burdensome for the SLC to ascertain once you may be nearing complete payment. You might want to contact the SLC to inquire of to be relocated to a debit repayment plan that is direct.

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 signify you may be relocated straight back to repayments through the PAYE tax system.
  • Whenever changing your task, you ought to be expected to perform a starter that is new that will ask you if you should be repaying your figuratively speaking. On concern 11 be sure 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.

When you have currently overpaid you then should contact the SLC as quickly as possible and make sure they’ve your proper bank details. But be skeptical of every phishing email messages or telephone calls from fraudsters pretending to end up being the SLC!

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

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