Cash­back crash course

If you’ve been in higher ed­u­ca­tion, you could be in line for a wind­fall!

Woman (UK) - - Ask The Expert -

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...

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