We frequently get questions via our sites. We usually do not offer advice, but we you will need to signpost to sourced elements of further support and information. A number of the replies may be beneficial to other people, therefore periodically we shall upload them anonymously as ‘question and response’ news products. We've gotten concern recently from a student-based loan debtor who's got very nearly completed repaying their education loan.

Please be aware – this will be posted as a ‘news’ item, which means that the given information and links aren't evaluated and updated. You must not count on it without checking the total facts of the Student Loans Company to your case or a taxation adviser.

Concern:

We have nearly completed repaying my Arrange 1 education loan. I have read within the news that borrowers will find by by themselves overpaying their loans which demonstrably i will be keen in order to prevent. So what can i really do to avoid this from taking place?

Answer:

We realize that this is a typical issue and the one that both borrowers and also the scholar Loans Company (SLC) desire to avoid. Whether you pay through Pay As You Earn (PAYE) or through Self Assessment unless you are working abroad, you will repay your student loan(s) through the tax system. Overpayments can happen to the end of repaying the mortgage due to timing variations in sharing information between HMRC, who will be collecting the mortgage repayments, while the SLC whom administer the loans. Nonetheless, HMRC therefore the SLC will work towards more frequent information sharing which ideally should reduce this dilemma taking place as time goes on. Tax Guide for pupils explains just exactly how education loan repayments are determined and exactly how the repayments are available through the taxation system.

For the time being, if you're arriving at the conclusion of repaying your education loan then there are lots of actions you can certainly do to stop overpayments from taking place.

• You can contact the SLC and ask to stop repaying your loans through PAYE and instead move to making repayments directly to the SLC through monthly direct debits when you are about two years from fully repaying your student loan(s. We realize that just a 3rd of borrowers decide for direct debits as well as the SLC are keen to encourage more borrowers to take action because it should avoid overpayments.
• Make sure that the SLC has up-to-date contact information so they can contact you if you need to. The SLC should monitor borrowers' records by having a view to determining while you are getting near to full repayment. If you should be nearing the termination of your repayments chances are they will contact you to definitely provide to change one to direct debit repayments.
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• You need to know that then it may be difficult for the SLC to determine when you might be nearing full repayment if you have fluctuating earnings, for example you work overtime or receive bonuses. You might want to contact the SLC to ask to be relocated to a debit repayment plan that is direct.

Then there are a few points to be aware of if you do move to direct debit repayments:

• Failure to steadfastly keep up with direct debit repayments will imply that you are going to be relocated straight back to repayments through the PAYE tax system.
• Whenever changing your task, you need to be expected to perform a brand new beginner list that will ask you to answer if you're repaying your figuratively speaking. On concern 11 ensure you state that you will be repaying your education loan right to the SLC by direct debit otherwise HMRC begins deducting repayments through PAYE – so you will be having to pay twice and overpayments will happen.

Then you should contact the SLC as soon as possible and ensure they have your correct bank details if you have already overpaid. But keep clear of any phishing e-mails or calls from fraudsters pretending to end up being the SLC!

To learn more about repaying student education loans see our start to see the pupil loans part in Tax Guide for pupils.

Contact: Claire Thackaberry (be sure to utilize kind at call us) or follow us on Twitter: @litrgnews