Cashback crash course
If you’ve been in higher education, you could be in line for a windfall!
This is a clarion call to everyone who’s been to university in the past 20 years. Hundreds of thousands of you have overpaid your student loans and with one quick phone call could be entitled to £100s or £1,000s back.
Since first dipping my toe in this subject last november, i’ve been swamped with stories of people getting refunds. There are three main ways you may be owed money. you can find full details at moneysaving expert.com/students/student-loan-overpaymentrefund, but in brief…
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.
yet a freedom of information request we made shows that in the past three years alone, over 100,000 repaid before the first april. and it’s likely there are many thousands more, going all the way back to 1998.
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 uni leaving date (which can be their fault or yours), or simply ignore it, then you may have started repaying too soon. and if so you’re entitled to some money back.
2 You could have overpaid in a particular year.
you only have to pay back your loan if you earn over the earnings threshold in a tax year. yet most payrolls work on a monthly basis. So a £21,000 threshold, for example, is seen as £1,750 a month.
if you earned over that in a month, such as for a bonus, money could have been taken. or if you stopped work halfway through the year, the same could have occurred, even though in total you earned under £21,000 in the year. if that’s happened to you, you may be due money back.
3 You may still be paying, even though your loan is already paid off.
This happens because Hmrc only tells the Student loans company once a year how much you’ve paid. So 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 to tell you if this has happened, but that takes time. if you think you’re impacted, call Hmrc.
in the meantime, to avoid this happening, you can now switch to repaying the loan by direct debit instead of through your employer.
You may have another reason to celebrate...