Money BackUpdated 2026

Student Loan Overpayment Refunds: How to Reclaim

Over a million student loan overpayments occurred in the 2024/25 tax year alone. If you've been charged too much, the Student Loans Company will refund you — but you usually need to ask.

Overpayments in 2024/25

1 million+

SLC data (via FOI)

Estimated Total Affected

Millions

Cumulative since Plan 2 began

Average Refund

£100–£500+

Can be much higher for some

Time to Claim

~10 minutes

Online through SLC account

✅⚡ Quick Answer

If your monthly income varies (bonuses, commissions, part-year work) or you recently changed jobs, you may have overpaid your student loan through PAYE. You can check for free in your SLC online account, and reclaiming typically takes around 10 minutes.

Why Overpayments Happen

Student loan repayments through PAYE are calculated monthly — your employer deducts 9% of everything you earn above the monthly threshold (currently £2,372/month for Plan 2 in 2025/26). But your actual obligation is based on your annual income.

This mismatch means that if your income varies month to month, you can end up paying more in total than you should over the tax year. The four main reasons are described below.

The Four Main Reasons for Overpayment

Variable Income (Bonuses, Commissions, Overtime)

If you receive a one-off bonus or commission that pushes your monthly pay above the threshold, your employer deducts student loan repayments on that amount — even if your annual salary is below the threshold. You may be owed a refund at the end of the tax year.

Wrong Repayment Plan

When you start a new job, HMRC sometimes assigns the wrong plan type (e.g., Plan 1 instead of Plan 2). Different plans have different thresholds, so you could be charged at a lower threshold than your actual plan requires.

Continued Deductions After Loan Cleared

There is typically a delay of 1–4 months between your final payment and SLC confirming the loan is fully repaid. During this gap, your employer may continue deducting repayments.

Part-Year Employment

If you started or left a job partway through the tax year, PAYE may have over-deducted because each month was assessed independently rather than looking at your annual total.

Worked Examples

📝 Example 1: Bonus Overpayment

Base salary: £27,000/year (£2,250/month)

Monthly threshold: £2,372 (Plan 2, 2025/26)

Normal months: Salary below threshold — no deductions

December: £2,000 Christmas bonus → Monthly pay = £4,250

Employer deducts: 9% × (£4,250 − £2,372) = £169

Annual salary: £29,000 → still above annual threshold of £28,470

Correct annual repayment: 9% × (£29,000 − £28,470) = £48

Overpaid by £121 — reclaimable from SLC

📝 Example 2: Job Change Mid-Year

Scenario: Left a job in September, started new job in November

Salary: £35,000/year (£2,917/month)

Months worked: 10 out of 12

PAYE deducted: 10 × 9% × (£2,917 − £2,372) = £490

Actual annual earnings: £29,167

Correct repayment: 9% × (£29,167 − £28,470) = £63

Overpaid by £427 — reclaimable from SLC

Check your repayments. Enter your salary to see what you should be paying — then compare to your payslip.

Open Calculator →

How to Reclaim Your Overpayment

The process is straightforward. You don't need to go through HMRC — your refund comes directly from the Student Loans Company.

Check your P60

Your P60 (issued by your employer after the end of each tax year in April) shows the total student loan deductions made during the year. Compare this to 9% of your annual earnings above the threshold.

Log in to your SLC account

Sign in at gov.uk/sign-in-to-your-student-loan-repayment-account. Your account shows your repayment history and current balance.

Contact SLC to request a refund

Call SLC on 0300 100 0611 or use the online contact form. Have your P60, National Insurance number, and Customer Reference Number ready.

Wait for your refund

Refunds are typically processed within 4–6 weeks and paid directly to your bank account.

ℹ️When to check

The best time to check is after the end of the tax year (after 6 April) once you have your P60. However, if you know you've been deducted on the wrong plan, you can contact SLC at any time.

Should You Always Reclaim?

In most cases, yes — it's your money and you should get it back. However, there is one scenario where you might want to pause and think.

💰Yes, Reclaim

Most people: If you won't repay in full within 30 years (the majority of Plan 2 borrowers), overpayments are pure loss — they don't reduce what you'd ultimately pay.

Action: Reclaim and put the money somewhere useful.

⚡Think Twice

High earners on track to clear: If you're a high earner who will repay the full loan plus interest within 30 years, the overpayment reduced your balance — essentially saving you future interest.

Action: Consider whether the interest saving outweighs having the cash now.

Not sure if you'll repay in full? See our Should I Overpay? guide for a framework to work it out.

Preventing Future Overpayments

While you can't completely eliminate the risk of PAYE overpayment (it's built into how the monthly system works), you can reduce the chance and catch problems early.

Check your payslip every month

Verify the student loan deduction line. If it says "SL1" but you're on Plan 2, contact your payroll team immediately.

Update SLC when you change jobs

Ensure SLC has your correct employer details so HMRC sends the right Start Notice to your new employer.

Track your balance near the end

When your balance drops below £1,000, switch to Direct Debit with SLC to avoid continued PAYE deductions after you've cleared the loan.

Keep your P60s

You need them to prove overpayment. Store them digitally — you may want to claim for previous years too.

For more on understanding your payslip deductions, see our Student Loan Tax Codes & Payslips guide.

Key Takeaways

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Over 1 million student loan overpayments occurred in 2024/25 — you may be one of them

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The most common cause is variable monthly income (bonuses, commissions, part-year work) creating a mismatch between monthly PAYE and annual obligation

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Other causes include being on the wrong repayment plan, continued deductions after loan clearance, and part-year employment

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Check your P60 against 9% of your annual earnings above the threshold — if you paid more, you can reclaim

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Contact SLC directly (not HMRC) to request your refund — it typically takes 4–6 weeks

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For most borrowers, reclaiming is the right call — overpayments don't help if you won't repay in full

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Switch to Direct Debit with SLC when your balance drops below £1,000 to avoid post-clearance overpayments

Calculate Your Correct Repayments

Use our calculator to see exactly what you should be paying based on your salary and plan type. Compare the result to your payslip to spot overpayments.

Open Calculator →Plan 2 Calculator