Question to the Department for Education:

To ask the Secretary of State for Education, what assessment she has made of the potential merits of permitting graduates paid via PAYE irregularly throughout the year to apply for a refund of the portion of their student loan payments which exceed the annual total of 9% above the yearly income threshold.

Student loan deductions are calculated separately for each pay period, rather than retrospectively from annual income.

In accordance with the regulations, borrowers with earnings exceeding the relevant repayment threshold have 9% of their earnings above this threshold deducted from their salary. This is applied to each pay period, by which we mean each time an employee receives their salary. This could be every week, four weeks, a calendar month. Therefore, an individual’s pay over their pay period will dictate their level of repayment.

If annual income remains above the applicable threshold, and the PAYE deductions were correctly made, the difference between those deductions and 9% of annual income above the yearly threshold is not refundable. Borrowers who made repayments, but who go on to earn below the annual repayment threshold are eligible to have those repayments refunded.