The level at which students begin to pay back their loans has been lowered from £27,295 to £25,000
From September 2023, the interest rate on student loans taken out has also been set to RPI+0% and the length of time that students pay their loans back until they can be written off has also been extended from 30 to 40 years.
University tuition fees have also been capped at £9,250, which is where it has been since 2018, for the next two years and will not rise with inflation.
The government stated that the changes would mean that a graduate earning £28,000 a year would pay back £17 a month and that the reforms would mean that more than half, 52%, of students who take out a loan to start a full-time university course will repay in full. This is more than double the current 25% rate.
The Department for Education (DoE) said that the changes would ‘rebalance the burden of student loans more fairly between the student and the taxpayer and ensure that in future graduates don’t pay back more than they borrowed in real terms’.
