By the Education Magazine | June 18, 2026
Around 71,000 graduates across the UK will see corrections made to their student loan accounts after the Student Loans Company (SLC) and HM Revenue & Customs (HMRC) uncovered student loan errors affecting Plan 2 borrowers.
The issue, which impacted around 1.3% of Plan 2 loan holders, led to incorrect balances being shown on some accounts.
According to the SLC, around 41,000 borrowers were overcharged, while approximately 30,000 were undercharged due to errors linked to income reporting and interest calculations.
Officials have apologised for the mistakes and confirmed that affected borrowers do not need to take any action. The student loan balance corrections and refunds, where applicable, will be processed automatically, with updated balances expected before September 2026.
Key Facts About the Student Loan Error
- 71,000 UK graduates were affected by student loan balance errors.
- The issue stemmed from income reporting and student loan interest calculation errors.
- Around 41,000 borrowers were overcharged, while 30,000 were undercharged.
- Refunds and account corrections will be processed automatically.
- The SLC says the errors have now been fixed.
What Caused the UK Student Loan Error?
The student loan balance discrepancies in the UK were linked to two separate technical and administrative issues.
1. Incorrect Income Information
In some cases, incorrect income data was used when calculating interest rates on student loan accounts. Because Plan 2 interest rates are partly linked to a borrower’s earnings, inaccurate income information resulted in incorrect interest charges being applied.
2. HMRC Reporting Issue
A second problem affected borrowers whose income was reported through both the Pay As You Earn (PAYE) system and Self Assessment tax returns.
According to officials, discrepancies between HMRC reporting systems and student loan records led to incorrect calculations for some borrowers. As a result, balances were either overstated or understated until the issue was identified.
What Did The Official Response Have to Say?
In a joint statement, the Student Loans Company and HMRC apologised for the mistakes and sought to reassure borrowers that student loan repayments would not be affected.
“The Student Loans Company and HM Revenue and Customs are very sorry that this happened. Affected customers won’t need to take any action, and regular repayment amounts will not change as a result of these issues. Both errors have now been fixed, and interest will be applied correctly going forward.”
The issue also drew criticism from consumer finance expert Martin Lewis, who said:
“This is an almighty pig’s ear, and it shows once again that our student loan system is broken.“
The comments highlight growing scrutiny of the UK’s student finance system and the importance of accurate loan administration for millions of borrowers.
Will Affected Graduates Receive Refunds?
Yes. Graduates who paid more than they should have because of the student loan calculation errors will receive refunds from the Student Loans Company (SLC).
The SLC has confirmed that affected borrowers do not need to submit a claim or contact the organisation. Account corrections will be carried out automatically, and any overpayments identified during the review process will also result in student loan refunds, which UK borrowers are entitled to receive where overpayments are identified.
The organisation has also stated that borrowers who have already repaid their loans in full will not face additional charges as a result of the corrections.
Updated balances and account information are expected to be reflected in online accounts and annual statements before September 2026.
What Happens Next for Affected Borrowers?
The Student Loans Company says most borrowers will not need to take any action while the corrections are being processed.
Affected graduates can expect the SLC to:
- Contact impacted borrowers directly
- Correct affected loan balances automatically
- Issue refunds where overpayments are identified
- Update online accounts and annual statements before September 2026
Once updated statements become available, borrowers are encouraged to review their account details and ensure the revised balances reflect the corrections communicated by the SLC.
Final Note
The Student Loans Company says both technical issues have now been resolved, and future interest calculations will be applied correctly.
For the 71,000 affected graduates, the focus now shifts to receiving corrected balances and, where applicable, refunds.
While the student loan errors are expected to be resolved through the correction process, the incident serves as a reminder of the importance of accurate loan administration in a system relied upon by millions of students and graduates across the UK.
It also serves as a reminder for borrowers to regularly review their finances, monitor their loan accounts, and develop strong money management habits after graduation.
