Student Loan Overpayment

mrsrolfie

Bit of a long shot here... and please don’t laugh me out of the forum for being ridiculous... 

I graduated in June 2006. In September 2006 my dad’s health deteriorated very quickly (he had been ill for 20 odd years). My parents wanted to claim incapacity benefit for him, as he was no longer able to work. To do this, they had to get rid of savings, otherwise they couldn’t claim anything. 

Very naively they decided to pay off my student loan so it was paid off around October 2006. I was very grateful but knowing what I know now, it was a complete waste of their hard earned, and saved, money. I feel sick every time I read articles about it, as I have never earned enough to mean I would have to repay, and now I work part time. 

My dad passed away a few months after, which makes me feel even worse because we didn’t expect it so they ‘lost’ all those savings for the sake of a few months incapacity benefit. 

I can’t bring myself to tell my mum, even though she’d tell me not to worry etc, as £18k is a huge amount of money and it would come in so handy for her now. 

So my question is, any chance I could reclaim anything?! Please be kind, I know it’s a silly question really but I’d love to be able to give something back to my mum. 

[Deleted User]

mrsrolfie said:

Bit of a long shot here... and please don’t laugh me out of the forum for being ridiculous... 

I graduated in June 2006. In September 2006 my dad’s health deteriorated very quickly (he had been ill for 20 odd years). My parents wanted to claim incapacity benefit for him, as he was no longer able to work. To do this, they had to get rid of savings, otherwise they couldn’t claim anything. 

Very naively they decided to pay off my student loan so it was paid off around October 2006. I was very grateful but knowing what I know now, it was a complete waste of their hard earned, and saved, money. I feel sick every time I read articles about it, as I have never earned enough to mean I would have to repay, and now I work part time. 

My dad passed away a few months after, which makes me feel even worse because we didn’t expect it so they ‘lost’ all those savings for the sake of a few months incapacity benefit. 

I can’t bring myself to tell my mum, even though she’d tell me not to worry etc, as £18k is a huge amount of money and it would come in so handy for her now. 

So my question is, any chance I could reclaim anything?! Please be kind, I know it’s a silly question really but I’d love to be able to give something back to my mum. 

Hi @mr@mrsrolfie

The answer is no; while the circumstances are very unfortunate, you are not entitled to a refund of anything you pay voluntarily to your loan balance.

I'm sorry for getting right to it, but under the circumstances I don't want to give you false hope for something that won't happen and risk you wasting your time.

mrsrolfie

SFSLExpert said:

mrsrolfie said:

Bit of a long shot here... and please don’t laugh me out of the forum for being ridiculous... 

I graduated in June 2006. In September 2006 my dad’s health deteriorated very quickly (he had been ill for 20 odd years). My parents wanted to claim incapacity benefit for him, as he was no longer able to work. To do this, they had to get rid of savings, otherwise they couldn’t claim anything. 

Very naively they decided to pay off my student loan so it was paid off around October 2006. I was very grateful but knowing what I know now, it was a complete waste of their hard earned, and saved, money. I feel sick every time I read articles about it, as I have never earned enough to mean I would have to repay, and now I work part time. 

My dad passed away a few months after, which makes me feel even worse because we didn’t expect it so they ‘lost’ all those savings for the sake of a few months incapacity benefit. 

I can’t bring myself to tell my mum, even though she’d tell me not to worry etc, as £18k is a huge amount of money and it would come in so handy for her now. 

So my question is, any chance I could reclaim anything?! Please be kind, I know it’s a silly question really but I’d love to be able to give something back to my mum. 

Hi @mr@mrsrolfie

The answer is no; while the circumstances are very unfortunate, you are not entitled to a refund of anything you pay voluntarily to your loan balance.

I'm sorry for getting right to it, but under the circumstances I don't want to give you false hope for something that won't happen and risk you wasting your time.

SFSLExpert said:

mrsrolfie said:

Bit of a long shot here... and please don’t laugh me out of the forum for being ridiculous... 

I graduated in June 2006. In September 2006 my dad’s health deteriorated very quickly (he had been ill for 20 odd years). My parents wanted to claim incapacity benefit for him, as he was no longer able to work. To do this, they had to get rid of savings, otherwise they couldn’t claim anything. 

Very naively they decided to pay off my student loan so it was paid off around October 2006. I was very grateful but knowing what I know now, it was a complete waste of their hard earned, and saved, money. I feel sick every time I read articles about it, as I have never earned enough to mean I would have to repay, and now I work part time. 

My dad passed away a few months after, which makes me feel even worse because we didn’t expect it so they ‘lost’ all those savings for the sake of a few months incapacity benefit. 

I can’t bring myself to tell my mum, even though she’d tell me not to worry etc, as £18k is a huge amount of money and it would come in so handy for her now. 

So my question is, any chance I could reclaim anything?! Please be kind, I know it’s a silly question really but I’d love to be able to give something back to my mum. 

Hi @mr@mrsrolfie

The answer is no; while the circumstances are very unfortunate, you are not entitled to a refund of anything you pay voluntarily to your loan balance.

I'm sorry for getting right to it, but under the circumstances I don't want to give you false hope for something that won't happen and risk you wasting your time.

Thank you for taking the time to reply and for your advice 😊

CoreenW

If I am over the threshold to be repaying my postgrad load, but they have taken more than they should based on my yearly earnings, would I still be due a refund? E.g repayment is 6% over £21000. I earned £22000 for the year, but they took £66 instead of £60 due to some months earning more than others

Ed-1

CoreenW said:

If I am over the threshold to be repaying my postgrad load, but they have taken more than they should based on my yearly earnings, would I still be due a refund? E.g repayment is 6% over £21000. I earned £22000 for the year, but they took £66 instead of £60 due to some months earning more than others

The threshold applies per pay period not per annum. So no refund is due. E.g. if you are paid monthly then the threshold is £1,750 and you are due to repay 6% above this.

Maddie

For 2020-21 I had earnings of £27,323 and repayments of £1129.

The threshold was repayments was £26,575.

So my earnings of £748 over the threshold have not only been fully wiped out, but have cost me an extra £381, before I even consider other PAYE deductions.

Surely this isn't how the system is designed to work? 

kaMelo

Maddie said:

For 2020-21 I had earnings of £27,323 and repayments of £1129.

The threshold was repayments was £26,575.

So my earnings of £748 over the threshold have not only been fully wiped out, but have cost me an extra £381, before I even consider other PAYE deductions.

Surely this isn't how the system is designed to work? 

Yes, it's exactly how it works.
.
It may seem you have overpaid but you haven't as repayments are not calculated on your annual salary, they are, as alluded to by @Ed-1, calculated per pay period.
If you have variable pay it will inevitably lead to higher repayments in the pay periods where you earned more. The pay periods where you earned less you will pay less or even none at all.

It works the same way as NI contribution calculations and your repayment amounts are calculated using the same figures used for NI contributions.

Tspice

I have telephoned SLC today and found out I have refunds due from 2011, so they've issued a refund for the years I paid student loan under the threshold. 

However, when I challenged the fact that I've overpaid on the student loan on my annual salary, over the threshold. Paid more than 9% of my annual salary, I was told that it is not calculated on my annual salary, but rather my monthly salary. Is this correct? So if one month I earnt more, I pay 9% on each month rather then what my annual salary would be? Because in some years I've overpaid on my annual salary by £600 due to this. 

Appreciate the help and advice please. 

Ed-1

Tspice said:

I have telephoned SLC today and found out I have refunds due from 2011, so they've issued a refund for the years I paid student loan under the threshold. 

However, when I challenged the fact that I've overpaid on the student loan on my annual salary, over the threshold. Paid more than 9% of my annual salary, I was told that it is not calculated on my annual salary, but rather my monthly salary. Is this correct? So if one month I earnt more, I pay 9% on each month rather then what my annual salary would be? Because in some years I've overpaid on my annual salary by £600 due to this. 

Appreciate the help and advice please. 

Yes. In the same way as National Insurance, it's calculated on a pay period threshold basis. So monthly if you're paid monthly.

terrash1

I contacted SLC and in the year 2022-2023 I earned £41 over the threshold on a plan 2 payment. (I earned 27336, the threshold is 27295)

I have payed over £300 in payments for this year but they are refusing to refund part of it as I still earned above the threshold

Is it correct I should only pay 9% of what I earn above the threshold? So technically I should have paid £3.80 instead of over £300