Haven't got a great deal of experience in student bank accounts but if you're actively using the £1,500 overdraft but just need to reduce it by £500 I would advise applying for a 0% for Purchases Credit Card and then everytime you buy something that you normally would i.e. fuel, shopping etc. Buy it on the credit card which will be 0% for a year (if you get a good one) and everything you would normally pay out of your own money which you have saved because you've paid it on the credit card you can pay off your overdraft and get it down to £1000.

 Shouldn't take long to do. 1 or 2 months as you can use credit cards everywhere nowadays.