Graduates stung with £36m student loan overpayments in one year

Laura Suter
18 July 2019

·         Graduates have paid more than £36m too much in student loan payments in just one year
·         More than 68,000 graduates have paid off more than they owe
·         The average graduate has overpaid by £534

Graduates have been stung with additional loan payments of £36m in 2017/18, according to a Freedom of Information request from AJ Bell. The figures show that graduates paid off £36,359,200 more than they actually owed, due to the lack of joined up systems between HMRC and the Student Loans Company. The average graduate paid off £534 too much.

Laura Suter, personal finance analyst at investment platform AJ Bell, comments:

“The figures on the level that graduates have overpaid are alarming, with more than 68,000 graduates paying off more than they actually owe on their loans in 2017-18. The problem arose thanks to a lack of a joined up systems between HMRC, which collects loan repayment information, and Student Loans Company. This meant that people continue to pay off their loans long after their debt has been paid off. 

“Once again we’ve seen the scale of the overpayments are truly staggering, with hundreds of people overpaying by £5,000 or more in a year, while almost 10,000 graduates are owed £1,000 or more. As well as taking away money that is rightfully theirs, the repayments affect graduates’ ability to get mortgage approvals, save for a house deposit or start saving for their futures.

“The issue arises because HMRC collected student loan payment information monthly, when people pay it off through their paycheques, but only informed Student Loans Company once a year how much each individual has paid off. What exacerbates the problem is that it can take six months or more from the end of the tax year for HMRC to tell Student Loans Company of the repayment amount – meaning individuals can continue paying towards their loan 18 months after the debt was cleared.

“The system between Student Loans Company and HMRC was reformed in April this year after pressure from MPs and the media. It means the repayment information is now shared weekly, which should hopefully consign this problem to the history books. However, while repayment information from April this year will be up-to-date, Student Loans Company still needs to tally and process the information for 2018-19, meaning that graduates may still be overpaying. 

“Anyone who thinks they might pay off their student loan soon should contact Student Loans Company to get an up-to-date figure on their loan amount and check that they aren’t overpaying. If you discover that you’ve paid off more than you actually owe you should also contact Student Loans Company to arrange a refund as soon as possible, although in the past many graduates have faced lengthy waits for their money to be returned.”

Over Repaid Amount

Total Over Repaid Amount*

 Number of Customers with an Over Repayment**
































































All Bands



Source: Freedom of Information Act request from AJ Bell, to Student Loans Company

Notes: * = rounded to the nearest 100. ** = rounded to the  nearest 10



Total Over Repaid Amount

Number of Customers with an Over Repayment

Average over repayment amount

















Source: Student Loans Company FOI.

Laura Suter
Personal Finance Analyst
Laura Suter is personal finance analyst at AJ Bell. She is a multi-award winning former financial journalist, having specialised in investments. Laura joined AJ Bell from the Daily Telegraph, where she was investment editor. She has previously worked for adviser publications Money Marketing and Money Management, and has worked for an investment publication in New York. She has a degree in Journalism Studies from University of Sheffield.
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