The Student Loans Company’s (SLC) best estimate of the number of borrowers it has continued to collect repayments from although their loan has been paid off for each year since 2001 is shown in the following table. The estimated 20,900 borrowers with income contingent repayment (ICR) loans who made overpayments in 2006-07 represented just 1.9 per cent. of the total number of borrowers who were eligible to make repayments had their earning passed the £15,000 earnings threshold. Over-repayments from borrowers with mortgage style loans are not included because any over-repayments once their loan has been cleared will only arise where the borrower has failed to cancel repayment arrangements with their bank.
There are a variety of circumstances why borrowers overpay but this mainly occurs when loans come to the end of repayment. The number of over-repayments has increased over the period covered by the answer as the number of borrowers with ICR loans entering into repayment has grown. ICR loans were introduced in 1998, so in the early years covered by the answer, relatively few borrowers were making repayments. For student loan borrowers with ICR loans, repayments are predominately made through the tax system. Due to the time lag in the SLC receiving information from HM Revenue and Customs, it is possible for borrowers to overpay before the SLC becomes aware that their repayments should stop.
Where the pattern of payments shows that repayment will be completed during the coming year, the SLC invites borrowers to get in touch to discuss when repayments should stop. Borrowers are then able to make manual repayments. If they do not respond promptly to the SLC, or ignore the invitation, they will probably overpay.
The SLC has recently introduced a new website facility specifically for repaying customers. This will give borrowers the ability to view their most current statement and it will also give them the chance to calculate their balance based on what they can see in their payslips.
The SLC is working on further improving the loan end process and has been asked to put in place arrangements which will reduce the number of borrowers over-repaying at the end of repayment. Those arrangements, which are likely to be voluntary, are expected to be in place towards the end of next year.
Any borrower who has repaid should contact the SLC immediately to obtain a full refund with interest. All refunds include interest at the same (retail price index) rate that was charged on the loan.
Financial year Total estimated number of borrowers who SLC has continued to collect from although their loan has been paid off Total number of borrowers who have passed their SRDD2 Borrowers who have overpaid as a percentage of those in repayment 2001-02 600 69,900 0.9 2002-03 3,300 231,300 1.4 2003-04 9,900 446,800 2.2 2004-05 15,600 669,100 2.3 2005-06 21,800 885,700 2.5 2006-07 20,900 1,118,700 1.9 1 Includes all borrowers who have passed their statutory repayment due date (SRDD) irrespective of their current status. English domiciled customers only. Borrowers may be counted in more than one year if they have received refunds in more than one year. The number of over-repayments has increased over the period as the number of borrowers in repayment have increased. Figures rounded to the nearest hundred. 2 Number of borrowers passed SRDD in years 2001-02 to 2004-05 includes borrowers who have fully repaid their loans. Source: Student Loans Company.