SLC’s Digital Refund Service has received more than 1.6 million refund requests since it launched in 2024.
Designed to put employees with student loan repayments in control, the service claims it provides a straightforward, self-service option for claiming Below Threshold refunds.
The milestone has been confirmed 29th October 2026 as the Student Loan Company (SLC) issues its annual Student loans repayments via PAYE eligible for refund statistical release.
The ad hoc statistical release provides more information on the total number who have made repayments under the four refund scenarios, the total amount repaid, as well as the total refunds provided to customers in 2023/2024, 2024/2025, 2025/2026 tax years, as well as 2026/2027 to date.
Most of those who are eligible for a refund fall into the ‘Below Threshold’ category
Since May 2024, student loan reoayers have been able to apply for refunds quickly and easily through their online account using the refund service.
Those eligible are contacted directly by SLC at the end of the financial year and invited to submit a refund request for the previous tax year.
In tax year 2025/26, £97.6m was refunded to 416,400 former students in this scenario, with payments made directly into their bank accounts.
SLC must wait until it receives annual earnings information from HMRC before it can proactively communicate. Communications will continue to be sent as eligible refunds are identified throughout the tax year.
Jackie Currie, SLC Director of Customer:
At SLC, we’re committed to delivering a modern, simple and digital experience that works for customers. The Digital Refund Service is a great example of how service improvements are helping repayment customers manage their loans more easily.
Former students who are now employed can access SLC’s full refund guidance here, including a step-by-step video showing how to request a refund through their online account.
SLC remind employees that they cannot provide financial advice, and urge consideration of personal circumstances before requesting a refund. Any refund provided will be added back onto the customer’s student loan balance as an outstanding amount which attracts interest.
Refund scenarios
Under the Education (Student Loans) (Repayment) Regulations, there are four refund scenarios. These are:
- Below Threshold Refunds – Student loan deductions are based on how much an individual earns during a pay period, for example each week or month. If a customer’s earnings go above the weekly or monthly repayment threshold, they will correctly have a repayment taken from their salary by their employer. However, at the end of the tax year, if their total earnings are below the annual threshold, they can request a Below Threshold refund. They cannot request this until the end of the tax year once HMRC has provided the customer’s annual earnings information to SLC.
- Credit balance refunds – If they have not set up a Direct Debit towards the end of their loan, repayments may still be taken from their salary after the loan balance has been fully cleared. At the end of the loan term, there is an agreed process that requires the employer to action the HMRC stop notification. Depending on when this is completed in the payroll process, further deductions may be taken. However, if SLC holds up-to-date bank details, any over-repayments will be refunded automatically.
- Early repayment refunds – former students are generally due to start repaying their loans the April after they finish or leave their course and begin employment (a date that is known as Statutory Repayment Date). If they starts making repayments before this date – often due to an admin error such as stating student loans on the starter checklist too early – they can request a refund.
- Incorrect plan type refunds – the starter checklist can appear complicated and some former students may declare the wrong loan plan type, or fail to declare any plan type but indicate that they did have a student loan. If the employer, as a result, places an employee on their wrong loan repayment plan, the individual may be entitled to a refund of any incorrect deductions. To help prevent this, new joiners and employees can download an Active Plan Type letter from their online account to help the, make the correct declaration on the starter checklist to ensure deductions are taken under the correct repayment plan.
Opinion
There are a number of anomalies with student loan repayments through employment.
The employee needs to declare the correct student loan type, not as easy as you would think.
Equally when they first start a job after graduation, no loan repayments may be due until the following April start point, yet the former student may not realise or found the starter checklist to complicated to complete correctly.
It’s feels strange that employers are required to deduct student loan amount based on period amounts without consideration of the annual threshold, so there are likely to be cases of mid year starters who are having loan deduction amounts, yet their annual earnings may be below their student loan plan type threshold. It is all very odd.
PAYadvice.UK 30/10/2026