Student loan repayments - are you owed a refund?

More than 833,000 graduates could be due a refund on their student loan repayments for 2022-23, according to the latest figures from the Student Loans Company (SLC).

The refunds apply to graduates who ended up being 'below threshold' in the last tax year, which means their income did not exceed the annual repayment threshold for their plan.

Here, Which? takes a closer look at how student loan repayments work and how to claim a refund if something goes wrong.

How do student loan repayments work?

The Student Loans Company (SLC) is a government-owned organisation that administers loans and grants to students in universities and colleges in the UK.

You may be entitled to borrow money from the SLC to help you pay for university or college tuition fees in the UK, as well as other living costs. 

You only start repaying your student loan once you leave study and earn above a certain salary threshold, which depends on which plan you are on. 

These repayments are paid through the PAYE tax system, meaning they are automatically deducted and sent to HMRC before you receive your salary.

• Find out more:repaying your student loan 

Did you pay too much in the 2022-23 tax year?

In the 2022-23 tax year, 833,213 graduates were below threshold and due a refund, according to figures from the SLC.

For graduates on Plan 2 the 2022-23 annual threshold is £27,295 and the weekly threshold is £524. You are charged 9% on everything above this threshold. 

Our table sets out the other thresholds to be aware of if you took out a loan on a different plan.

SLC explained that although these payments would have been taken correctly at the time, either weekly or monthly, over the whole year it may be that your annual income did not exceed the threshold overall.

For example, it may be that you got a bonus one month which pushed you over the monthly threshold, or perhaps you received a pay rise halfway through the tax year, which means your annual income was still below the threshold. 

If you’re repaying a combination of Plan 1, Plan 2 and Plan 4 loans, you can only get a refund if your income was less than the lowest threshold.

• Find out more:which student bank account offers the best perks in 2023? 

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Did you pay too much in previous tax years?

In the 2021-22 tax year, 998,476 people made repayments on their student loan while being under the annual repayment threshold.

If you think you may have paid too much in a previous tax year, you’ll need to check the previous annual thresholds for that tax year against your payslips.

How to claim a refund

Due to high call volumes to SLC to ask about refunds, it's now provided a refund request form for those who think they may be under threshold. 

After you have completed it, email it to [email protected] and you'll get an automatic reply to confirm it's been received. 

If you think you may be owed a refund due to another reason, you should contact SLC. 

SLC contact details: 

• For England, Northern Ireland and Scotland: 0300 100 0611 
• For Wales:  +44 (0)141 243 3660 For outside of the UK:0300 100 037
• By post: The Student Loans Company, 100 Bothwell Street, Glasgow, G2 7JD

SLC told us it aims to process refunds as soon as possible and the refund should be in your bank account around 10 days after the request.

You should also make sure your contact information is up to date as SLC automatically refunds customers directly into your bank account where it holds up-to-date information and can validate bank details.

What other situations might lead to a refund?

If you’re not below the threshold, there still may be other ways you could be due a refund. 

You started paying too early 

The earliest you’ll start repaying is:

• the April after you leave your course 
• the April four years after the course started if you’re studying part-time or doing a Postgraduate Doctoral course and your course is longer than four years
• April 2026 if you’re on Plan 5

Therefore, if you finished your course in May and started a new job in September you would be owed a refund if payments were taken straight away. They should not start until the following April.

You were put on the wrong repayment plan

You can get a refund if your employer puts you on the wrong plan. For example, you started university after 2012 and are on Plan 2, but your employer has marked you as Plan 1. 

First, you should check which plan you’re on by signing into your online account and downloading your ‘active plan type letter’. 

Then ask your employer which plan they have you on - if it is different you should ask your employer to correct this to ensure the correct deductions are taken going forward. 

You’ve paid off your student loan in full  

HMRC will tell your employer to stop taking repayments from your salary when you have repaid your loan in full, but it can take around four weeks for salary deductions to stop.

This means you may pay back more than you owe.

You can avoid paying more than you owe by changing your payments to direct debit in the final year of your repayments. 

Keep your contact details up to date in your online account so SLC can let you know how to set this up. In this case, SLC will try to contact you and tell you how to get a refund, or refund you automatically

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This article has been dated since it was first published on 1 November. It has been updated with information on a new refund request form.