Students could be overpaying their loans by more than £10,000 by continuing to pay after clearing their debts, the government has admitted.

Universities Minister Chris Skidmore has urged graduates to switch to direct debit as they approach the end of their loan repayment to “ensure a smooth end” and “not repay more than they should”.

In 2016-17, 85,000 graduates paid off more than they owed and 40 people overpaid by more than £10,000.

But just 34 per cent of eligible graduates paid their final loan repayments via direct debit, with the majority risking overpayment by continuing automatic deductions from their salary.

Mr Skidmore said: “With more and more people enjoying the benefits of a university education, it’s only right that graduates have easy access to the information they need about repaying their student loan.

“The Government is investing in the student loans system to make it as simple and easy for people to use as possible. I urge all graduates to use this new service and to join the direct debit scheme as they approach the end of their loan to ensure a smooth end and not repay more than they should.”