The new government has promised to introduce an online service designed to prevent overpayments at the end of the student loan term.
The move comes after it was discovered that £300m was overpaid in student loans in the nine-year period from 2009-10 and 2017-18. More than 510,000 students continued to have deductions made even after they had paid off their loan, and while most of the overpayments were paid back, £28.5m remains unclaimed.
The new online service is set to go live this year and will allow graduates to access up-to-date information about their student loan balance.
The system will largely replace annual paper statements – although those who prefer the existing paper statements will still be able to receive them.
From April 2020, graduates will only need to start paying back their loans once they earn £26,575 – a third consecutive annual increase in the repayment threshold.
To stop students over-repaying their loans altogether, the government is also calling on graduates to switch to direct debit towards the end of their loan, rather than continue with automatic deductions from their salary.
Universities minister Chris Skidmore said: “The government is investing in the student loans system to make it as simple and easy for people to use as possible. I urge all graduates to use this new service and to join the direct debit scheme as they approach the end of their loan to ensure a smooth end and not repay more than they should.”