student loan overpayment

h00vertime

SLC have contacted me about an overpayment that needs to be repayed separately to the loan balance... I had just been paying it with an extra direct debit a little each month but i closed the account and also as I am an umbrella contractor they are rinsing my main balance repayment based on my inflated umbrella rate so im loath to set up another DD.

I said just lump it with the main balance and just take as you do which they say they cant do. why?? they made the mistake and over paid me why should i be penalized for this?? TIA for any help

kaMelo

They made a mistake and now want it back, in what way are you being penalised?

What type of student loan are you talking about, mortgage style (pre 98) or plan 1 (post 98)? Depending upon that answer changes how the overpayments are dealt with but in both cases it cannot be lumped together with your main balance.

h00vertime

im plan 1

I mean im already being penalised for being a contractor because i am working though an umbrella company and they are calculating my repayments based on that. it sucks to have to pay back even more cause of their mistake

kaMelo

SFE calculate Plan 1 repayments upon gross pay over the relevant earnings threshold,  the fact you are a contractor paid via an umbrella company who take a slice is your own choice, nothing to do with SFE.

The reason the overpayment cannot just be merged with your outstanding Plan 1 loans is that the terms of repayment are different. Any overpayment you have received is repayable immediately although the reality is more often than not a repayment plan.  If your earnings ever dropped below the earnings threshold your repayments towards your Plan 1 loan would stop wheras the payment plan for the overpayment you received would carry on regardless of your earnings, hence why they cannot be merged.

Whilst you may feel aggrieved at having to repay the overpayment on top of your student loan, you did receive the money by mistake and, I assume, spent it too. As such it's only fair they want it back.