Martin Lewis issues student loan warning - how to check if YOU are overpaying and in line for a refund
Martin Lewis has warned that more than a million Brits could be owed a refund after overpaying their student loans.
Martin Lewis has warned that more than a million Brits could be owed a refund after overpaying their student loans.
And the MoneySavingExpert, 52, said that it is very easy to claim it back - meaning those who have been caught out can get an average windfall of £280.
More than a million ex-students overpaid because they do not earn over the annual threshold, figures released by the Student Loans Company revealed.
People who work on commission or only work for certain months of the year could be charged because they earn over the threshold for those months - despite their annual income being less than the minimum.
Others may have been paying more because they were on the wrong repayment plan, while some graduates may have also started repaying their loans too early.
Martin Lewis has warned that more than a million Brits could be owed a refund after overpaying their student loans
Speaking on ITVs The Martin Lewis Money Show Live, Mr Lewis explained that more than a million ex-students overpaid because they do not earn over the annual threshold
Speaking on ITVs The Martin Lewis Money Show Live, Mr Lewis said: There are four ways you overpay [your student loan].
The first and the biggest by a mile, over one million overpaid this way, you should only repay if you earn over the annual threshold.
For example for Plan 2, which has the most number of people on it, 2012 to 2022 English starters, youve got to understand, if you earn less than that [£27,295] you shouldnt repay the student loan but because its taken via the payroll your student loan is taken monthly.
A twelfth of that is £2,274 per year, so if you earn more than that in a month, youre gonna have student loan contributions taken from you.
He continued: If you work for only nine months of the year or you have some months with big commission, where youre earning over that amount, you will have repaid in a month even though your earnings are under the threshold.
Therefore you are able to claim this money back, over a million people are in that position.
Mr Lewis (pictured) said that anyone who thinks they may be paying more on their student loans for this reason should visit the Student Loan Company website
More than a million ex-students overpaid because they do not earn over the annual threshold, figures released by the Student Loans Company revealed (Stock image)
Mr Lewis said that anyone who thinks they may be paying more on their student loans for this reason should visit the Student Loan Company website and fill out a form requesting their money back.
He then went on to explain the second reason why people are paying too much on their student loan is because they are on the wrong repayment plan.
Mr Lewis said the third reason was that people still have money deducted from their salary even after their student loan is fully repaid.
The fourth and final reason was because people had begun paying their loan less than nine months after they graduate - which is too soon.
To address each of these issues, you should speak to your employer to ensure the correct information is on your payslip and call the Student Loans Company for a refund if you are eligible.
Mr Lewis advice come as students face paying hundreds of pounds more a year after Sir Keir Starmer broke another promise earlier this week.
In a fresh attack on the middle classes, the Government announced that university tuition fees will rise to more than £9,500.
Sir Keir Starmer has raised university tuition fees, having previously pledged to abolish them in his campaign to be Labour leader
When he was campaigning to be Labour leader in 2020, Sir Keir Starmer pledged to support the abolition of tuition fees but later rowed back on that promise
The first hike in eight years will help universities facing ‘severe financial challenges’, Labour insisted. But it flies in the face of Sir Keir’s promise to abolish tuition fees when he was campaigning to be party leader in 2020.
And it is the latest salvo in Labour’s ‘class war’ against middle Britain – after the Government dropped a £40 billion tax bomb on businesses, private schools and farmers.
Education Secretary Bridget Phillipson said increasing the £9,250 maximum tuition fees for domestic students to £9,535 next year had ‘not been an easy decision’.
But she claimed it was necessary to ‘secure the future of higher education’ amid fears of a financial crisis in the sector.
There was an immediate backlash from unions and MPs, who said students had been ‘shafted’.
Newly appointed Tory education spokesman Laura Trott accused Labour of breaking promises.
Education Secretary Bridget Phillipson said that the move to hike fees to £9,535 had not been an easy decision
Sir Keir made abolishing tuition fees one of his ten pledges when he campaigned to be Labour leader, saying the party ‘must stand by its commitment to end the national scandal of spiralling student debt and abolish tuition fees’.
Ms Trott said: ‘With Keir Starmer elected to Labour leadership on a pledge to scrap tuition fees, no mention of the rise in the manifesto, and the Education Secretary saying in just July this year that Labour had no plans to raise fees, students can be forgiven for feeling betrayed.
‘This is another broken Labour promise to add to the long list.’
The move means the cost of a three-year degree will rise by £855 to £28,605, with the debt borrowed to cover this increasing with interest. The interest rate is currently linked to the Retail Price Index, at 4.3 per cent.
The other rules will remain in place – so graduates will repay 9 per cent of their earnings over £25,000 and any unpaid debts will be wiped after 40 years.
