Does student grant overpayment build interest?

Back in September I recurved a letter from student finance stating I had been overpaid my student grant by £1271. This was due to leave a course early, I then made a payment schedule of £20 a month. That was 8 months ago so £160 should have been paid off, making the remaining balance £1111. However, I am now in a position to pay this off fully- it is not taken from my salary as it is an overpayment so. A separate direct debit. But does a grant overpayment build up with interest the longer it is left unpaid/low payments taking time. I tried to call student finance but the collections office is closed due to covid19. I otherwise have £7000 in savings for a house, if the grant overpayment isn’t increasing with interest then I’m tempted to use the £1111 towards my house deposit and continue paying £20 a month/slowly chip away at the debt when the collections office reopens with a few hundred here and there. Any advice is appreciated!

Comments

  • ceb1995
    ceb1995 Posts: 388
    First Anniversary Name Dropper First Post I've been Money Tipped!
    Forumite
    I had an overpayment and my husband has one he's paying back now and there's no sign off any interest from it on our statements. 
  • Thank you! In that case I’ll probably move the £1100 to my house deposit savings and chip away at the grant overpayment with the payment plan and a few hundreds here and there. Thank you!
  • Hi

    If you are talking about any Grants from Student Finance, regardless of the type, it is never subject to interest. It doesn't matter how long it might take you to repay.

    If it is a loan overpayment then you are only obligated to repay the specific amount that has been overpaid outwith the usual repayment process; however your loan balance will always be subject to interest accrual.

    Hope this helps.

    Disclaimer: not an expert
Meet your Ambassadors

Categories

  • All Categories
  • 341.8K Banking & Borrowing
  • 249.7K Reduce Debt & Boost Income
  • 449.2K Spending & Discounts
  • 234K Work, Benefits & Business
  • 606.2K Mortgages, Homes & Bills
  • 172.5K Life & Family
  • 246.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards