The government is holding on to more than £28m in student loan overpayments by graduates that have been identified but not yet refunded.

More than half a million former students in England overpaid their student loans by an average of nearly £600, Student Loans Company (SLC) data shows.

The figures, obtained via freedom of information requests by the higher education publication Research Professional News, show that a total of £308m was overpaid between 2009-10 and 2017-18 but almost a tenth of that has not been refunded.

Repayments to student loans are governed by the Department for Business, Innovation and Skills. The poorest students borrow more than £50,000 on average, while interest rates of up to 6.3% increase the amounts owed.

The SLC said it contacted everyone who overpaid to arrange refunds and urged all graduates who had taken out loans to keep their contact details up-to-date.

A spokesman said: “We want all customers to repay the right amount and not to over-repay on their loan.”

He said the company writes to people who have two years of repayments left to suggest they pay by direct debit rather than through their employer to help prevent over-repayments. “Customers who do not participate in the direct debit scheme can also claim a refund at any time by contacting us.”

The SLC had also started to receive payment information from Revenue and Customs to help “prevent customers from over-repaying and provide them with more up-to-date information about their loan repayment”.

Until recently, the SLC only received repayment information at the end of the tax year in April, meaning there could be a lag before the repayment system recognised the loan had been paid off. For instance, even if a graduate paid off their loan in November, automatic payments could continue to be deducted from their salary for the rest of the tax year.

The biggest annual amount not refunded was from 2015-16, with £6.3m of overpayments not yet paid back. From 2016-17, £5.9m of overpayments were still outstanding, the BBC reported.

A government spokesman said steps had been taken to help avoid overpayments in the future. “This included changing the law in April to allow weekly data sharing between HMRC and the Student Loans Company, which will help to prevent graduates repaying too much,” he said. “If a borrower believes there has been an over-repayment, they should contact the SLC to seek a refund.”

Last year, the SLC was accused of spying on vulnerable students’ social media accounts during an anti-fraud campaign which caused some people to lose funding and drop out of university despite having done nothing wrong.