Students who start University next year could be paying off their loans for 40 years after they graduate, under new reforms in England.
The government says extending the repayment period, as part of a student finance shake-up, will reduce the bill for taxpayers.
But their plans have been met with some opposition. Labour said it will “hit those on low incomes hardest”, with lower-earning graduates affected the most.
The plans – part of a response to the 2019 Augar review of post-18 education – apply to students in England starting courses from September 2023.
The government has also said:
- The maximum a university can charge for a course per year will be frozen at £9,250 for a further two years
- The income level at which graduates start repaying their student loan will be reduced from £27,295 to £25,000 and this will remain set until 2026-27
- The interest rate will be cut to match the Retail Price Index (RPI) – one of the ways inflation is measured in the UK
The government is proposing these changes because more students than ever are going to university, and only 25% of those who started full-time undergraduate degrees in 2020 are expected to pay back their loans in full.
Nathan Sparkes, 20, who studies engineering at the University of Sheffield, said: “It is really not fair on people starting off at university. The decision is difficult enough as it is – first year students are already concerned about leaving home and starting their new lives, now they have to worry about even more debt.
“The year 13s coming up to Uni next year definitely have a lot more to think about”
The government says its plans would mean a student enrolling on a three-year course at the end of next year could see their debt reduced by up to £11,500 – if and when they earn £25,000.
Education Secretary Nadhim Zahawi said £900m of investment was being “reinforced by a revised, fairer, and more sustainable student-finance system, which will keep higher education accessible and accountable”.
He added: “These changes will create a fairer system for both students and the taxpayer.”