The Money Saving Expert has said that there is a quirk in the rules that means you could be owed money by the Student Loans Company
He offered the advice on his ITV1 show(Image: ITV)
Martin Lewis is urging people who started work between 2012 and 2022 to check if they could be eligible for a refund on their student loan.
The money saving guru said they ‘should get their money back’ if they discover they’ve overpaid on their loan.
On The Martin Lewis Money Show Live on ITV1 on Tuesday, November 11, he how university graduates who began working between 2012 and 2022 might be owed money by the Student Loans Company due to an anomaly in how the system operates, reports the Express.
He said: “Now, the rules state, absolutely plainly, you only need to repay the student loan if you earned over the annual threshold in a tax year. What your annual threshold is depends which plan you’re on.”
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The money saving expert said he would concentrate on Plan 2 loans, which applies to most people in England who attended university between 2012 and 2022, and in Wales from 2012 onwards.
For those individuals, the repayment threshold stands at £28,470 annually, with repayments set at 9% of everything above that figure.
He continued: “That’s how it works, but PAYE payroll, it takes the money based on your monthly earnings. So £28,470 a year is equivalent to £2,372 a month. You repay 9% of everything you earn above that a month.”
Mr Lewis then gave the example of someone graduating from university and starting a job in July with a salary of £36,000 per annum, or £3,000 monthly before tax, just a few months after leaving university.
For the remaining nine months of the tax year, until the end of March, you would have to repay 9% of everything above the threshold, which equates to roughly £56 each month.
However, your total earnings for the tax year (April to March) would only amount to £27,000, falling below the annual threshold of over £28,470.
He said: “You earned less than the threshold, you don’t have to repay your student loan. Here are the payments that you made, £508, you can reclaim the £508. This is big, for many people.”
He further explained that this issue most commonly affects those who only work part of the year (as in the example given), those on commission, or those with variable incomes who still fall under the threshold.
To claim a refund, you can use an SLC refund request form available at gov.uk or through the Student Loan Company Repayment app.
The Student Loan Company has issued a statement regarding this form: “Call waiting times to our repayment helpline are currently longer than usual, due to high volumes from customers enquiring about refunds.
“To help customers, SLC has introduced a refund request form which is available online and is the easiest and quickest way for customers to request a refund. Customers can access and download the form at Getting a refund from SLC – GOV.UK (www.gov.uk).
“Once completed, customers can email it to below_threshold_refunds@slc.co.uk”.
Customers will receive an automated confirmation once their form has been submitted, with refunds typically processed within approximately 28 days. The SLC has requested that customers who have submitted refund applications do not make contact during this period.
Once the refund request has been calculated and processed, the SLC will notify customers directly. Should additional information be needed, or if a customer does not qualify for a refund, the SLC will reach out to them.
