Huge numbers of graduates have made student loan repayments worth more than £50m, despite having already paid off their full loan.
An estimated 85,720 former students made overpayments that equate to£49.8m in 2016-17 – the latest figures available through the Freedom of Information Act.
The issue was first brought into the public eye after an investigation by The Telegraph last year, however the latest figures suggest not very much has been done to tackle the issue.
It’s predicted that the issue has come about as a result of mixups between the Student Loans Company and the taxman. Despite HM Revenue & Customs receiving payment information on a monthly basis, it is only passed on to the SLC once a year.
Whilst graduates will get refunds, due to the interest being low on the extra repayments, it could affect an individuals mortgage affordability.
An HMRC spokesman said:
“The SLC and HMRC have been jointly exploring how to improve management of repayment information, including sharing repayment data more frequently to help reduce over-repayments. From April 2019, SLC and HMRC will be able to share data more frequently.”
A spokesman for the SLC said:
“There is no need for customers to over-repay their loan. Providing they have kept their contact details up to date on their online account, they will receive a letter from us when they are within 23 months of repaying the balance of their student loan account in full, inviting them to opt into the Prevent Over-Repayment Scheme.”