‘Anger and disbelief’ as woman discovered she’s owed £1,109 student loan repayment refund

Student loan: Woman reveals she was owed a refund

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On BBC Moneybox this weekend, reporter Dan Whitworth investigated Rebecca’s case and why this happened. He found university graduates were still paying back more than they owe.

Latest figures from the Student Loan Company (SLC) show that more than 50,000 graduates have overpaid more than £3million in one year. This is as average overpayment of £400 each.

Rebecca Gale-Paul explained her experience on the podcast.

She finished paying off her student loan in 2015, but last week, six years later, there was a message left on her phone about a refund she was due from the SLC.

She said: “Initially it was total surprise and delight – who doesn’t like to be told they’re owed money back?

“But then I was a bit shocked and couldn’t really understand it because it had been so long since I’d left university and paid it off.”

The SLC owed a refund of Rebecca £1109, money which she could have used good use of.

She continued: “Once I got over my delight, to be honest I was angry.

“I wanted to understand how it could take so long to repay something that should have been in my bank account for over half a decade.

“So yeah, anger and disbelief. £1100 – that’s a month’s mortgage paid off, that’s a month’s nursery cost, and that could have been used to pay off credit card debt that I have got.

“The point is this was my money, and it should have been in my account, not theirs.”

Rebecca was owed more than £1,000 for six years but only just found out.

When explaining how this could have happened Mr Whitworth said: “SLC explained that they got some information from HMRC in May this year dating back to some of Rebecca’s repayments from the tax year 2010/11.”

The SLC then updated their records straight away and got in touch with Rebecca.

A HMRC spokesperson told MoneyBox: “Following a routine scan of our records earlier this year, we identified a small number of cases where repayment information had not been passed on to SLC.

“We corrected these cases as soon as they became known and notified SLC so that they could update their records.”

SLC used to receive annual updates from HMRC about people who repaid their loan directly through their payslips, but many people overpaid as it was annual. So, in April 2019 the system changed and SLC got weekly updates to combat this delay.

The way the system works now is that if people are paid monthly, HMRC will find out about overpayments monthly so people should get the overpayment automatically very quickly.

Sarah Coles, personal finance analyst at Hargreaves Lansdown commented on Rebecca’s experience: “It is shocking, it’s a lot of money and six years is a lot of time.

“Clearly it’s something broken down in the system, and Rebecca is paying the price.”

Overpayments may happen because HMRC may not have up to date details for a person, she said.

Ms Coles said: “A lot of people move houses as graduates and forget to update their details. So, if they don’t have your address, or new phone number and bank account they can’t automatically refund you and they contact you.

“First thing to do is to make sure they have the right details, so you can sign into your account. Go to gov.uk/slc/signin and put your ID number in and then you can update all your details.

“Then two years before you reach your end payment, you will be given the option to change your agreement with your employer to a direct debit and that way it ensures you don’t overpay, so that is definitely worth doing.”

Usually, these refunds should happen automatically, but people can check if they are owed an overpayment if they contact SLC on social media, or they can call and find out on 030010010611.

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