Thousands of university graduates who studied over a 10-year period are expected to receive refunds after their student loan balances were incorrectly increased.
The Student Loans Company (SLC) is reaching out to impacted students following the identification of two distinct issues affecting particular Plan 2 loans. Plan 2 repayment schemes apply to undergraduate courses that began between 2012 and 2022.
Technical and Reporting Errors
The initial issue was a technical fault whereby inaccurate income data was used when calculating interest. The second issue was an HMRC income reporting mistake, which affected individuals earning through both PAYE and self-assessment.
The mistakes have affected 71,000 former students in total, consisting of 41,000 whose student loan balances were wrongly inflated and 30,000 whose balances were mistakenly diminished, reports the Manchester Evening News.
Refunds and Corrections
The SLC has stated it will contact customers whose balances have increased due to these issues. Those who have paid too much will be eligible for a refund. If your balance fell and you did not overpay, you will not receive a refund. Instead, your account will be amended with the correct interest applied.
Those who have already settled their loan completely will not be obliged to commence repaying again. The SLC also verified that both mistakes have now been corrected, stating any adjustments to balances will feature in an individual's next annual statement, which should be available before the end of September. It calculates that 1.3% of current Plan 2 loans were affected.
Official Statement
An SLC spokesman said: "We are contacting some Plan 2 customers to inform them we're correcting their loan balance following technical issues which have now been resolved. Those customers affected do not need to take any action and regular repayment amounts will not change. SLC and HMRC are very sorry that this has happened."
This comes after the announcement in April that interest rates on Plan 2 and Plan 3 student loans will be capped for the 2026-27 academic year.
