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£28m unclaimed in overpaid loans

More than £28 million in overpaid student loans has accumulated in government bank accounts in just nine years, lying unclaimed by its rightful owners.

Research Fortnight’s sister publication HE has discovered that more than 513,000 people in England overpaid their student loans between 2009-10 and 2017-18, each paying on average £597 more than they should have done—meaning that about £300m in overpayments has been collected in just under a decade. The overpayments occurred because the Student Loans Company system has historically continued to take pay-as-you-earn payments from former students even after their balance has been paid off.

While most of this overpayment has been reclaimed by graduates, some £28,460,095 has still to be collected, a freedom of information request has revealed. Almost £900,000 of this is owed to students who overpaid a decade ago during the 2009-10 tax year, with a total of almost £6m owed to those who finished repaying between 2010-11 and 2012-13.

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