Asked by: Emma Hardy (Labour - Kingston upon Hull West and Hessle)
Question to the Department for Education:
To ask the Secretary of State for Education, what estimate her Department has made of the average length of time the Student Loans Company takes to refund people who have made an overpayment on their student loan.
Answered by Luke Hall - Minister of State (Education)
The Student Loans Company (SLC) has a Service Level Agreement of 28 days to make a refund to people who have made an over repayment on their student loan. Based on telephone requests from January to March 2024, the SLC averaged 8 days from the point the request was received to the point the refund was paid to the borrower’s bank account.
Student loans repayments for borrowers resident in the UK are made via HMRC through the UK tax system. Employers deduct repayments each pay period for employees with a student loan when their earnings are above the relevant repayment threshold for that pay period.
Over repayments can occur for a number of reasons, for example the time lag between an employer making a PAYE deduction and HMRC receiving and sending that payment to SLC, which can then confirm that a borrower has paid off their student loan balance. HMRC provides the SLC with student loan repayment information as reported by employers on a weekly basis. For this type of over-repayment, the SLC can automatically make a refund of £5,000 where they are able to verify a borrower’s bank account details.
SLC provide borrowers with the option to switch to repayments via direct debit when they are nearing the end of their loan repayments. This prevents overpayments entirely.
Asked by: Emma Hardy (Labour - Kingston upon Hull West and Hessle)
Question to the Department for Education:
To ask the Secretary of State for Education, what discussions she has had with HM Revenue and Customs on the timeframe for refunding student loan overpayment.
Answered by Luke Hall - Minister of State (Education)
The Student Loans Company (SLC) has a Service Level Agreement of 28 days to make a refund to people who have made an over repayment on their student loan. Based on telephone requests from January to March 2024, the SLC averaged 8 days from the point the request was received to the point the refund was paid to the borrower’s bank account.
Student loans repayments for borrowers resident in the UK are made via HMRC through the UK tax system. Employers deduct repayments each pay period for employees with a student loan when their earnings are above the relevant repayment threshold for that pay period.
Over repayments can occur for a number of reasons, for example the time lag between an employer making a PAYE deduction and HMRC receiving and sending that payment to SLC, which can then confirm that a borrower has paid off their student loan balance. HMRC provides the SLC with student loan repayment information as reported by employers on a weekly basis. For this type of over-repayment, the SLC can automatically make a refund of £5,000 where they are able to verify a borrower’s bank account details.
SLC provide borrowers with the option to switch to repayments via direct debit when they are nearing the end of their loan repayments. This prevents overpayments entirely.