Martin Lewis warns over one million people paying back a student loan are due huge refunds

Martin Lewis has warned over one million people across Great Britain with an outstanding student loan may have paid too much money over the 2023/24 financial year and may be due refunds worth hundreds of pounds. The financial guru issued the warning during this week’s Martin Lewis Money Show Live and also in the MoneySavingExpert (MSE.com) newsletter.

Martin explained to ITV viewers how where you live and and the type of course you completed determine the annual earnings threshold - this is the amount of money you can earn before you need to repay the student loan. The consumer champion used a simple graph to highlight this - for people in Scotland who took out a student loan between 1998 and now, the threshold is £31,395.

He explained how a new Freedom of Information request made by MSE.com found that 1,064,211 people overpaid their student loan during the last financial year, but added that this figure is on top of the millions who have already been identified as having overpaid.

And it’s worth looking into as Martin said the average payout is £280.

Four main reasons for student loan overpayments

Martin then shared the four main reasons for the overpayments. Martin said: “The first and biggest by a mile is that you should only repay if you earn over the annual threshold.”

This accounts for over one million overpayments.

The second reason is that you're on the wrong student loan payment plan by default. This affects 20,500 people.

The third reason is that you started repaying your loan too early. MSE.com discovered that this applies to nearly 60,000 people in the 2023/24 financial year.

And the final reason is that you had money deducted after the loan was fully repaid, this affected nearly 38,000 people.

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How to reclaim

The full guide on MSE.com explains each of the four reasons in detail and offers examples to help people easily identify which category they might fall into. You can read this here.

Martin explained that there’s no time limit on making a claim and you can go back as many years as you like. However, if possible, gather old payslips, your payroll number and a PAYE reference number, but if you don't have those to hand, don't be put off - a new system allows many of these claims to be done online, and others can be done with a phone call.

Rebecca, a nurse, contacted the show to share how she received a refund of £444 after overpaying her student loan due to racking up overtime during the Covid pandemic.

Martin said: “Lovely to hear and dead easy to do as well.”

Full details on making a claim are on MSE.com here.

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