Money saving man Martin Lewis has revealed that more than 100,000 people have overpaid on their student loans and could get the cash back if they needed to.
Basically, there are two separate plans for people to repay their student loans - anyone who started university pre-2012 will be on the older 'Plan 1', while those who started later will be on 'Plan 2'.
The issue is that many companies have mistakenly put people on Plan 1 when they should be on the other. Plan 1 takes a bigger chunk of your money each month.
If you thought paying more will benefit you in the long run, it won't really because repayment amounts don't change depending on how much you own, with the balance being wiped after 30 years anyway.
Speaking to the Mirror, Martin Lewis said: "The only people who may not want to overpay are very higher earners (the top 17 percent of graduates) who will be likely to clear the loan within the 30 years.
"If in doubt though, and you need the cash (to pay off other debt or a mortgage, for example), reclaim your overpayments."
He continued "It's understandable that many would think overpaying a good thing as it reduces the interest.
"[But for most people] overpaying will simply mean paying more unnecessarily, as the amount you pay will just be fixed over 30 years as a set proportion of income.
"Therefore, taking the overpayment back won't result in you paying any more in future, so it is a pure gain - do it.
"Plan 2 student loan repayments act far more like a tax than a debt - and just like a tax, if you've overpaid, it's worth getting the cash back.
"The stats show the huge majority (83 percent) of those in England on Plan 2 loans are unlikely to clear their loan in full in the 30 years before it's wiped (a higher proportion of those in Wales, where the loan is lower, will)."
According to data obtained by Lewis' company MoneySavingExpert, via a Freedom of Information request, the Student Loans Company (SLC) shows that between April 2019 and April 2020, 102,658 graduates and other borrowers had Plan 1 deductions taken when they should have been on a Plan 2 loan - and therefore paid back too much.
You can check whether you're overpaying simply by asking your employer what plan you're on.
When it comes to reclaiming, you can download a copy of your plan type on the Student Loan Company website and can hand this to your employer. You can also ring the Student Loans Company on 0300 100 0611 (or +44 141 243 3660 from overseas), explain your situation and ask to reclaim the money you're owed.
Alternatively, you can send the SLC a private message via Facebook.
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