Martin Lewis: Did you go to university in the last 20 years? You could be owed cash
PUBLISHED: 10:48 23 March 2018 | UPDATED: 10:48 23 March 2018
This is a clarion call to everyone who’s been to university in the last 20 years or so.
Hundreds of thousands of you have overpaid your student loans and with one quick phone call could be entitled to hundreds or thousands of pounds back.
There are three main ways you may be owed money.
1. You may have started repaying your student loan too early
You’re only eligible to start repaying your student loan in the April after graduation, which for most is around nine months after leaving.
For those who didn’t finish university, it’s the April following leaving - even then you only repay if you earn over a set threshold.
- Started university in or after 2012 in England and Wales: Your repayment threshold has always been £21,000 though it rises to £25,000 next month.
- Started university before 2012 in England & Wales, or any time since 1998 in Scotland & Northern Ireland: the threshold has changed each year. It is currently £17,775 and rising to £18,830 in April.
Yet a freedom of information request we did, shows in the last three years alone, over 100,000 university leavers repaid before the first April, which they shouldn’t have done.
The reason this happens is if you are an employee you repay your student loan automatically through the payroll. So if your employer has the wrong info about your university leaving date (which can be their fault or yours), or simply ignore it, then you may have started repaying too soon.
2. You could’ve overpaid in a particular year
You only have to pay back your student loan if you earn over the earnings threshold in a tax year. Yet most payrolls work on a monthly basis, so the £21,000 threshold is seen as £1,750 a month.
If you earned over that in a month, such as for a bonus, you could’ve had the money taken off you or if you stopped work half way through the year, money could’ve been taken off you, even though you earned under £21,000 in total in the year.
3. You could still be paying even though you’ve already paid off your loan
A huge 86,000 people overpaid this way in 2015/16 alone. This happens because the Student Loans Company only gets told by HMRC how much you’ve paid once a year (though it does retrospectively calculate the interest as if you’d paid each month).
As a result, people who’ve finished paying off their loans can still have money deducted up to a year later – this is due to change from 2019. It will write and tell you if this has happened, but that takes time, if you think you’re impacted call it and speak to it.
In the meantime to avoid this happening, a new rule means in the last 23 months you can switch to repaying the loan by direct debit instead of through your employer – which should help.
How to get money back if you think you’re due?
In a perfect world you’d check your payslips, then call up the Student Loan Company with your national insurance number, payroll number and PAYE reference. Yet the world isn’t always perfect, so do that if you can, it helps the Student Loans Company, but if you don’t have these things just call it on 0300 100 0611 and it will do its best to help.
If interest rates on student loans are high, isn’t overpaying good?
It’s predicted that 83% of university leavers who started university in or after 2012 won’t clear their full loan plus interest in the 30 years before it’s wiped. So apart from the very highest earning 17%, for everyone else, extending the repayment time by starting early simply means you pay more back unnecessarily – so reclaim it.
Martin Lewis is founder and chairman of MoneySavingExpert.com.
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