Prevent Over Repayment scheme for Plan 2 loans

Prevent paying back more than you owe when completing your repayment term

Why would I pay back more than I owe?

HM Revenue and Customs notify us once each year of how much you have repaid through the tax system. And because the repayments you make are deducted throughout each tax year but don’t get passed to us until after the end of that tax year, it is likely you could repay more than is outstanding on your loan.

How can this be prevented?

As you approach the end of your repayment term, we will give you the option to change the way you make your repayments. So, rather than paying your student loan through the tax system, you will be able to pay directly to us, by monthly Direct Debit.

What if I have both a Plan 1 and a Plan 2 loan?

If you have both a Plan 1 and a Plan 2 loan you can’t change to Direct Debit repayments until one type of loan has been paid off in full. Once you have paid off one Plan type you can then change to Direct Debit repayments for the last two years of your remaining loan.

What is the benefit of repaying by Direct Debit?

By making your repayments by monthly Direct Debit, we'll be able to calculate exactly when you are due to repay your loan in full. This means:

  • We can stop your payments at exactly the right time.
  • You can be completely confident that you have paid your loan in full.
  • You will not have to apply, and wait, for a refund of any extra payments you might make, if you continue paying through the tax system.

How can I start repaying my loan by monthly Direct Debit?

You can switch to Direct Debit if you've received a letter from us stating that you’ve almost finished paying back your student loan, or if you expect your loan to be paid off in full within 4 to 23 months.

you can either:

  • repay your loan by switching to Direct Debit or
  • repay your balance in full – some customers choose to do this.

Call and tell us what you want to do. You’ll need your payslips for the current tax year when you call us, so that all repayments you have made can be taken into account.