Tens of thousands of graduates have seen their student loan balances corrected after HMRC and the Student Loans Company (SLC) identified separate data issues affecting around 71,000 borrowers.
Around 41,000 customers have had their balances increased, while a further 30,000 have seen their balances reduced following the review.
In a joint announcement on Thursday, HMRC and the Student Loans Company (SLC) confirmed that around 71,000 borrowers have been affected by separate data issues.
The review found that around 41,000 customers had been undercharged interest and will see their balances increase, while a further 30,000 had been overcharged and will have their balances reduced.
Affected borrowers will not receive compensation, with accounts instead being adjusted to reflect the correct amount that should have been charged.
The issue was first identified in 2022, although HMRC has not disclosed how long the problem had been affecting accounts before it was discovered.
The errors affected some graduates with Plan 2 student loans, which apply to people who started university between 2012 and 2023.
Repayments begin in the April after graduation and are set at nine per cent of earnings above the repayment threshold.
Interest rates vary according to income. Borrowers earning below the threshold are charged interest linked to the Retail Price Index, currently 3.2 per cent.
Officials confirmed that affected accounts will be corrected but borrowers will not receive any compensation
| GETTY
HMRC admits data error after 41,000 Britons were charged too much - check if your affected
| GETTYThose earning between £29,385 and £52,885 can be charged up to six per cent interest, while the highest earners face the full six per cent rate during the 2026-27 tax year.
Those earning between £29,385 and £52,885 can be charged up to six per cent interest, while graduates with the highest incomes face the full six per cent rate during the 2026-27 tax year.
An SLC spokesperson said the technical issues have now been fixed and confirmed that affected borrowers do not need to take any action.
Ollie Gardner, who founded the graduate-led campaign Rethink Repayment, said the balance error would feel familiar to many borrowers.
"The Student Loans Company balance error is worrying, but for many graduates it will feel like just another example of a system that consistently lets them down," he said.
Experts describe the student finance as fundamentally flawed
| GETTY"For graduates trying to save for a home, start a family or invest in their futures, having accurate information about their student debt is essential."
Alex Stanley from the National Union of Students described student finance as fundamentally flawed. "Trust in the student finance system is fast eroding.
"It is a broken system that isn't working for students, isn't working for graduates, and isn't working for the Government," he said.
This marks the second significant error in recent months, following an incident in April when over 20,000 students were asked to repay thousands in maintenance loans that had been incorrectly awarded.
Chancellor Rachel Reeves confirmed the repayment threshold would remain frozen at £29,385 for the next three years
| PAConservative leader Kemi Badenoch has committed to scrapping real interest rates on Plan 2 loans as part of her policy platform.
Alex Race from wealth manager Rathbones characterised the situation as yet another instance of graduate workers being "further penalised by their loans and left out of pocket".
The Department for Education has determined that HMRC will not seek to recover money from borrowers who have already cleared their student debt entirely.
In November, Chancellor Rachel Reeves confirmed the repayment threshold would remain frozen at £29,385 for the next three years.