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

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

We frequently get inquiries via our sites. We usually do not provide advice, but we make an effort to signpost to sourced elements of further support and information. A number of the replies could be beneficial to other people, therefore sometimes we are going to anonymously post them as ‘question and solution’ news things. We have received a relevant concern recently from a student-based loan debtor who has got nearly completed repaying their education loan.

Please be aware – this will be published as a ‘news’ item, this means the given information and links aren’t evaluated and updated. You must not depend on it without checking the entire facts of your situation utilizing the figuratively speaking Company or a taxation adviser.


I’ve very nearly finished repaying my Plan 1 education loan. I’ve read inside 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 do i really do to stop this from occurring?


We realize that this is often a typical issue and the one which both borrowers therefore 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 mortgage as a result of timing variations in sharing information between HMRC, who will be gathering the mortgage repayments, together with SLC whom administer the loans. Nevertheless, HMRC together with 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 exactly just exactly how education loan repayments are determined and just how the repayments are built through the taxation system.

For the time being, if you should be visiting the termination of repaying your education loan then there are many actions can help you to avoid overpayments from taking place.

  • When you’re about 2 yrs from completely repaying your student loan(s) you can easily contact the SLC and inquire to get rid of repaying your loans through PAYE and alternatively proceed to making repayments straight to the SLC through month-to-month direct debits. We recognize that just a third of borrowers decide for direct debits additionally the SLC are keen to encourage more borrowers to take action because it should avoid overpayments.
  • Make sure that the SLC has up-to-date contact information so if need be that they can contact you. The SLC should monitor borrowers’ reports with a view to distinguishing 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 then it may be difficult for the SLC to determine when you might be nearing full repayment if you have fluctuating earnings, for example you work overtime or receive bonuses. You might want to contact the SLC to ask to be relocated to an immediate debit payment plan.

Should you go on to direct debit repayments then there are some points to understand:

  • Failure to steadfastly keep up with direct debit repayments will signify you may back be moved to repayments through the PAYE tax system.
  • Whenever changing your work, you should be asked to accomplish a starter that is new that will ask you if you should be repaying your student education loans. On concern 11 make certain 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 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 function as the SLC!

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

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

Acerca de Alberto del Rey Poveda

Investigador Titular del Instituto de Iberoamérica. Grupo de Investigación Multidisciplinar sobre Migraciones en América Latina [GIMMAL]. Profesor del Departamento de Sociología y Comunicación de la Universidad de Salamanca.
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