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

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

Any concerns? I have very 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 make an effort to signpost to sources of further support and information. A few of the replies may be beneficial to other people, therefore periodically we are going to publish them anonymously as ‘question and solution’ news things. We now have received a relevant concern recently from a student-based loan debtor that has very nearly completed repaying their education loan.

Take note – it is published as a ‘news’ item, this means the given information and links aren’t evaluated and updated. You shouldn’t count on it without checking the total facts of your instance using the figuratively speaking Company or a income tax adviser.


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


We recognize that this is an issue that is common the one which both borrowers while the scholar Loans Company (SLC) would you like to prevent. 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 to the final end of repaying the mortgage as a result of timing variations in sharing information between HMRC, that are gathering the loan repayments, together with SLC whom administer the loans. But, HMRC and also the SLC will work towards more data that are frequent which ideally should reduce this issue taking place in the foreseeable future. Tax Guide for Students describes exactly just how education loan repayments are calculated and exactly how the repayments are built through the income 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.

  • Whenever you are about 2 yrs from completely repaying your student loan(s) you are able to contact the SLC and inquire to end repaying your loans through PAYE and alternatively relocate to making repayments straight to the SLC through month-to-month direct debits. We recognize that just a 3rd of borrowers go for direct debits while the SLC are keen to encourage more borrowers to take action because it should avoid overpayments.
  • Make certain that the SLC has up-to-date contact information so if need be that they can contact you. The SLC should monitor borrowers’ records having a view to pinpointing while you are 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 need to know that when you have fluctuating earnings, as an example you work overtime or get bonuses, then it might be hard for the SLC to find out whenever you may be nearing complete payment. You might want to contact the SLC to ask to be relocated to a primary debit payment plan.

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

  • Failure to maintain with direct debit repayments will imply that you certainly will be relocated right back to repayments through the PAYE tax system.
  • Whenever changing your work, you need to be asked to accomplish a brand new beginner list that may ask you if you’re repaying your student education loans. On question 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 have currently overpaid then you definitely should contact the SLC at the earliest opportunity and guarantee they’ve your proper bank details. But keep clear of any phishing email messages or telephone calls from fraudsters pretending to function as SLC!

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

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

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