| TL;DR: Two technical errors between HMRC and the Student Loans Company (SLC) resulted in incorrect balance calculations for around 71,000 Plan 2 borrowers. Approximately 41,000 graduates were overcharged interest; around 30,000 now face higher balances after being undercharged. Affected accounts will be corrected automatically. No compensation will be paid. Repayment amounts will not change as a result. |
Last reviewed: 19 June 2026
HMRC and the Student Loans Company have confirmed two errors affecting 71,000 Plan 2 graduates. Balances will be corrected; no action is needed and no compensation will be issued.
What happened
HM Revenue and Customs (HMRC) and the Student Loans Company (SLC) have jointly announced two separate technical errors that caused incorrect interest calculations for a minority of Plan 2 student loan holders.
The first error arose from a technical issue in which the wrong income information was used when calculating interest. The second was the result of an HMRC income reporting error affecting borrowers who had income through both PAYE and Self Assessment. Both errors have now been fixed and interest will be applied correctly going forward.
Who is affected
Plan 2 loans apply to students who began undergraduate study between 2012 and 2023 in England and Wales. Repayments begin in the April after graduation at 9% of earnings above the repayment threshold. Interest rates vary by income level: borrowers earning below the threshold are charged interest linked to the Retail Price Index (currently 3.2%), while higher earners face up to 6% interest during the 2026/27 tax year.
Around 41,000 borrowers had their balances incorrectly increased, meaning they were overcharged interest. A further 30,000 borrowers were undercharged, and their balances will increase as a result of the correction.
What happens next
The SLC will contact borrowers whose balance has increased due to the errors. Corrected balances will be reflected in customers' next annual statement, which will be available in their online account before the end of September 2026. Borrowers do not need to take any action.
The SLC has confirmed that regular repayment amounts will not change as a result of the corrections. For the 41,000 graduates whose balances were wrongly increased, the correction brings their outstanding total down to reflect what should have been charged, with interest that was incorrectly applied also being reversed going forward.
No compensation will be paid
HMRC and the SLC have confirmed that no financial compensation will be provided to affected borrowers. Balances will simply be adjusted to reflect what should have been charged. The SLC has not publicly specified a timeline for completing all balance corrections or for addressing repayments that were made against an incorrectly inflated balance.
A pattern of HMRC income data errors
The overcharging linked to HMRC's income reporting pipeline is not a new issue. Accounting firms flagged a comparable HMRC-linked overcharging problem in October 2023, when income data errors similarly pushed loan repayments above the correct level for a subset of borrowers.
Frequently asked questions
How do I know if my student loan balance was affected?
The SLC will contact borrowers whose balance has increased due to the errors. You can also check your annual statement, which will be available online before the end of September 2026. Borrowers do not need to contact the SLC proactively.
Will I get a refund if I was overcharged?
The SLC and HMRC have confirmed no compensation will be paid. Balances will be adjusted to reflect the correct figure going forward, but the organisations have not confirmed a process for refunding repayments already made against inflated balances.
Does this affect Plan 1 or Plan 5 student loans?
The announced errors relate specifically to Plan 2 loans - those taken out by students who started university between 2012 and 2023. The SLC's statement does not reference Plan 1 or Plan 5 borrowers.
