Martin Lewis issues urgent refund warning to millions with student loan debt
Martin Lewis has issued a huge refund warning to millions of people who have student loans and it could see a hefty sum land back in your back account.
When we go to university, most of us take out academic and maintenance loans to pay for the course we're studying and to help us live through the three or four years that it takes to get an undergraduate degree under our belts.
But it isn't cheap, with tuition fees in England and Wales sitting at £9,250 a year.
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When you graduate, you have to start paying back your student debt, which will be in the tens of thousands for modern students. How much you pay and when you pay depends on how much you earn.
Unfortunately for some, they end up paying too much. Enter the advice of Martin Lewis, who this week through his Money Saving Expert (MSE) newsletter explained about a new online tool we can use to reclaim anything we've overpaid.
What has Martin Lewis said?
"Student loans, like tax, are repaid via the payroll - but only if you earn over a threshold, and what you pay is in proportion to earnings," Lewis writes in his latest MSE newsletter.
"And just as millions can reclaim tax overpayments, many uni leavers can reclaim unwittingly overpaid student loans.
"Our Freedom of Information (FOI) requests indicate that over four tax years (6 April 2019 to 5 April 2023) likely more than four million overpaid, and many more did before and since."
This isn't the first time Lewis has flagged this issue, with it previously going viral with numerous success stories.
One of them belonged to an MSE reader called Kayleigh, who messaged Lewis saying: "I wanted to thank you. I've just found out I'm due just over £800 through having made five repayments to my student loan when I hadn't reached the yearly threshold."
Reasons for overpaying your student loan
One of the biggest reasons for overpaying is that you repaid some of your student loan despite not earning enough in the year. Given most people are paid monthly, that figure is taken as one twelfth of the annual figure and taxed accordingly - but obviously, not everyone's work is as regular and salaries change.
Other instances have included people repaying their student debt too early and others being on the wrong student loan payment plan.
How to reclaim if you've overpaid
Lewis says: "There's no time limit here either, so even if this was a decade ago, you can still do it.
"If possible, gather old payslips, your payroll number and a PAYE reference number. But if you don't have those, don't let it put you off - this can often be done in a phone call, and now a new system allows some of the claims to be done online.
To do it online, sign in to your repayment account and select 'request a refund'. The system will then check previous tax years for you and flag where you might be eligible.
Lewis does say that overpaying on normal loans is a good thing as it means you clear the debt quicker and pay less interest.
Topics: Martin Lewis, Education, UK News, Hacks, Money
Tom Earnshaw