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 inquiries via our web sites. We usually do not offer advice, but we you will need to signpost to sourced elements of further support and information. A few of the replies may be beneficial to other people, therefore periodically we’re going to post them anonymously as ‘question and solution’ news things. We’ve gotten concern recently from a student-based loan debtor who’s got very nearly completed repaying their student loan.

Please be aware – this might be published as a ‘news’ item, which means that the given information and links aren’t evaluated and updated. You shouldn’t depend on it without checking the total facts of the Student Loans Company to your case or perhaps a taxation adviser.


We have very nearly completed repaying my Arrange 1 education loan. We have read within the news that borrowers are able to find by themselves overpaying their loans which demonstrably i’m keen in order to avoid. Exactly what do i actually do to avoid this from taking place?


We recognize that this is a common issue and one that both borrowers and also the scholar Loans Company (SLC) desire 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 differences in sharing information between HMRC, who’re gathering the loan repayments, and also the SLC whom administer the loans. Nevertheless, HMRC additionally the SLC will work towards more regular information sharing which ideally should reduce this issue taking place as time goes by. Tax Guide for pupils explains exactly exactly how education loan repayments are determined and exactly how the repayments are produced through the income tax system.

For the time being, if you’re arriving at the termination of repaying your education loan then there are numerous actions can be done to avoid overpayments from taking place.

  • 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 go for direct debits together with SLC are keen to encourage more borrowers to take action because it should prevent overpayments.
  • Make certain that the SLC has up-to-date contact information so that they’ll contact you if you need to. The SLC should monitor borrowers’ records by having a view to determining if you are getting near to full payment. If you’re nearing the termination of your repayments chances are they will contact you to definitely provide to change one to direct debit repayments.
  • You will have to remember that when you have fluctuating earnings, as an example you work overtime or get bonuses, then it may possibly be hard for the SLC to ascertain once you may be nearing complete payment. You might want to contact the SLC to ask 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 maintain 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 accomplish a brand new beginner list that may ask you if you’re repaying your figuratively speaking. 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.

Then you should contact the SLC as soon as possible and ensure they have your correct bank details if you have already overpaid. But be skeptical 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 learning student loans part in Tax Guide for pupils.

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

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