Thousand of former students are wasting thousands of pounds after finishing university.
Money Saving Expert have revealed that more than 30,000 people are accidentally paying off their student loan.
University leavers only have to start repaying their loan when earning over a certain amount.
This is called the 'repayment threshold'.
However, the financial gurus at Money Saving Expert have found that many students are making student loan repayments when they were earning less than the repayment threshold.
Martin Lewis, founder of MoneySavingExpert.com, said: "In practice, for most people student loan repayments act far more like a tax than a debt.
"With interest rates for those who started uni in or after 2012 as high as 6.3%, some may assume repaying as much as you can is a boon. Yet the stats show the huge majority – over 80% – of these university leavers are unlikely to clear their loan in full in the 30 years before it's wiped, so that interest rate isn't what they'll pay.
"For those on lower earnings, overpaying some of your loan is often futile as it won't alter what you repay in future – in which case overpaying is just flushing money down the loo."
Who repays their student loan?
If you started uni between 1998 and 2012 or since if you're from Scotland or Northern Ireland
You repay nine percent on everything above the repayment threshold of £25,725 in the 2019/20 tax year.
You repay when your earnings go over the weekly or monthly equivalent of the threshold.
If you don't clear your loan in 30 years, it's cleared.
If you started uni in/after 2012 and are from England or Wales
You repay nine percent on everything you earn over the current threshold, £18,935.
You repay when your earnings go over the weekly or monthly equivalent of the threshold.
Your loan is wiped a certain amount of time after you leave university, but this can depend on circumstances.
For advice about repaying your student loan, see Money Saving Expert's full article here.
